(Adds loan pricing, financing details)
MILAN, June 21 Italian carmaker Fiat
has renewed a three-year, 2 billion-euro ($2.64 billion)
revolving credit line, it said on Friday, a vital step in its
plan to acquire the Chrysler shares it does not already own.
The loan agreement with nine banks refinances a 1.95 billion
euro loan of the same duration that was signed in July 2011, the
company said in a statement.
"The operations shows the strong support for the Fiat group
from its key banks," it said.
Fiat owns 58.5 percent of U.S. peer Chrysler and is trying
to buy the remaining shares to merge the two companies and
create the world's number seven carmaker by sales.
Fiat's loan refinancing is one step in a three-phase
refinancing plan that includes the re-negotiation of Chrysler's
$3 billion loan and financing for the acquisition of Chrysler's
The refinancings are designed to cut borrowing terms and
adjust the covenant terms of both loans to allow the merger to
Chrysler completed its $3 billion loan refinancing on
Thursday, when the loan went free to trade in New York. The
share purchase deal is on a longer post-summer timetable,
Fiat's 2 billion euro loan refinancing will be launched to a
second group of relationship banks shortly in a wider plan to
reduce the nine lead banks' exposure, a senior banker said.
The nine banks that have already joined the deal are
Barclays, BNP Paribas, Citigroup, Credit Agricole CIB, Intesa
San Paolo, Mediobanca, Royal Bank of Scotland, Societe Generale
Each of them committed around 222 million euros to the loan
which they are aiming to cut to around 150 million euros each
with the syndication, the senior banker said.
Banks joining in the wider syndication are being offered
fees of 90 basis points for commitments of 100 million euros and
75bps for commitments of 50 million euros, he added.
Pricing of the deal is tied to a ratings grid and ranges
from 450 basis points (bps) to 150bps if the company attains an
investment-grade rating, a senior banker said.
Fiat is rated BB- by Standard and Poor's and Ba3 by Moody's.
($1 = 0.7590 euros)
(Reporting by Danilo Masoni and Tessa Walsh, editing by Stephen
Jewkes and Elaine Hardcastle)