LONDON Feb 11 Italy's biggest utility Enel
said on Monday that it has signed a 9.4 billion euro
($12.58 billion) forward start loan which will replace an
existing 10 billion euro syndicated loan when it matures in
Forward start loans allow borrowers to secure future
liquidity past the initial maturity date of financing without
the risk of an immediate decrease in facility amount.
Enel's new self-arranged five-year revolving credit facility
pays a margin of 170 basis points (bps) over EURIBOR depending
on rating, the company said, rising to 195 bps on first
utilisation and to 225 bps if fully drawn, banking sources said
previously. There is also a commitment fee of 40 percent of the
applicable margin on undrawn amounts.
A large group of banks participated in the loan, including
Mediobanca, which was documentation agent, Enel said.
The financing, which does not fall under Enel's debt
refinancing programme, is available to Enel and to its Dutch
subsidiary Enel Finance International N.V.
The undrawn 10 billion euro syndicated loan that Enel is
replacing was agreed in April 2010 and paid an initial margin of
85 bps over EURIBOR for a split rating of A-/A2, plus a 50 bps
utilisation fee for drawings of over 50 percent.
Enel is now rated BBB+/Baa2.
Enel was forced to pay a generous premium on its 3.2 billion
euro, five-year loan refinancing in February 2012, to cover
peripheral economy risk and the fact that the loan was drawn.
Enel paid a hefty 300 bps on that loan, while similarly rated
companies at that time, including Germany's Henkel, were
borrowing at around 40 bps.
Other companies from Europe's peripheral economies have
sought forward start loans this year. Telecom Italia,
Spain's Telefonica and Portugal's EDP have all
returned to the loan market to take advantage of better loan
terms to extend the maturity of existing deals.
($1 = 0.7474 euros)
(Reporting by Alasdair Reilly; Editing by Christopher Mangham)