RLPC-Philip Morris seeks $2 bln loan

LONDON Fri Jan 18, 2013 8:52am EST

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LONDON Jan 18 (Reuters) - Tobacco company Philip Morris International (PMI) is tapping the loan market for a $2 billion, 364-day revolving credit facility, which will be used for general liquidity purposes, banking sources said on Friday.

PMI did not immediately respond to a request for comment.

Royal Bank of Scotland is leading the deal that launched on Wednesday, the sources said.

The loan pays tight pricing of 15 basis points (bps) over LIBOR if drawn and 4 bps if undrawn.

The facility also carries a utilisation fee of 10 bps if the company draws down one-third of the facility and 20 bps if the company draws down on more than two-thirds of the facility. The utilisation fee will go on top of the drawn spread.

The tight pricing is a reflection of improving loan market conditions for top rated borrowers, which were further boosted by changes made to regulations over the Liquidity Cover Ratio (LCR), the final version of which was published on January 7.

The changes see a reduction of the amount of liquid assets that banks will be required to hold against syndicated loans, and are expected to further boost loan market liquidity and see downward pressure on pricing.

PMI has two multi-year revolvers that will stay unchanged. The company has a $2.5 billion revolver that expires on March 31 2015, while a $3.5 billion revolver matures on October 25 2016, according to an SEC filing. Those deals pay drawn margins of 50 bps and 20 bps, respectively.

PMI is rated A by Standard & Poor's and A2 by Moody's.

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