LONDON Oct 8 German utility E.ON is
seeking a 5 billion euro ($6.79 billion) syndicated credit
facility to refinance an existing 6 billion euro facility, the
company said in an emailed statement on Tuesday.
The financing, which is expected to remain undrawn, is a
pure back-up facility for E.ON's commercial paper programmes and
also serves as a liquidity reserve. The facility can also be
used for general corporate purposes.
Competitive loan market conditions, especially in Germany,
have seen many high grade borrowers return to the loan market
early to lock in liquidity at low prices, banking sources said.
E.ON's financing is for five years and includes two one-year
extension options. The facility pays a margin of 27.5 basis
points (bps) over EURIBOR, matching the level achieved on German
carmaker Daimler's 9 billion euro loan refinancing
that signed in September.
E.ON is looking to replace a 6 billion euro credit facility
that was originally agreed in 2010 and which was due to mature
in October 2015. That loan paid a margin of 47.5 bps over
The loan has been launched to E.ON's relationship banks via
coordinating banks Commerzbank and UniCredit, banking sources
Responses are due in the first week of November, one of the
banking sources said, and the financing is expected to be signed
later that month.
($1 = 0.7368 euros)
(Editing by David Cowell)