Telefonica refinances 3 billion euro syndicated loan - source

MADRID Tue Feb 18, 2014 3:00pm EST

MADRID Feb 18 (Reuters) - Spain's Telefonica has refinanced a 3 billion euro ($4 billion) syndicated loan with 26 creditor banks, a source with knowledge of the matter said on Tuesday, in a move that could provide it with funds for possible acquisitions.

The new credit line matures in 2019 and is cheaper than previous syndicated deals at 85 basis points above the Euribor rate, the source said, priced at around 60 percent less than a similar operation signed in 2013.

Telefonica, one of Europe's most heavily indebted telecoms operators, declined to comment.

The telecoms giant is studying paying off up to another 2 billion euros of debt with proceeds from the sale of its Czech business. It has sold a clutch of assets over the past two years aimed at reducing debt and improving credit ratings. ($1 = 0.7272 euros) (Reporting By Robert Hetz; Writing by Sonya Dowsett)