Finmeccanica secures $4.95 billion loan for DRS buy

LONDON (Reuters) - Italian aerospace company Finmeccanica (SIFI.MI) has secured a 3.2 billion euro ($4.95 billion) syndicated loan to back its acquisition of US peer DRS Technologies Inc DRS.N, a company spokesperson told Reuters LPC on Tuesday.

The loan has one and three-year maturities and is being arranged by mandated lead arrangers and bookrunners Goldman Sachs, IntesaSanPaolo, Mediobanca and Unicredit Group.

Around two-thirds of the loan will be repaid from the proceeds of planned asset disposals including the IPO of Finmeccanica's AnsaldoEnergia subsidiary as well as a capital increase of 10 percent, a spokesperson said.

The remaining one-third of the loan will be refinanced into longer-term debt, they added.

Finmeccanica has a split credit rating and is rated A3 by Moody's and BBB by Standard & Poor's. The company faces higher borrowing costs since the credit crunch in addition to an acquisition premium on its loan, sources said.

A-rated companies in Europe, the Middle East and Africa (EMEA) are paying average margins of 49 basis points (bps) in 2008, up from 27 bps in 2007, according to data from Reuters Loan Pricing Corporation.

BBB rated companies are paying 65 bps in 2008, up from 41 bps in 2007, although borrowing costs could rise as there has been limited issuance in this ratings bracket this year.

Finmeccanica said the loan is designed to preserve a solid capital structure, guarantee adequate financial flexibility to support growth and deliver value creation to the shareholders.

The transaction values DRS at around $5.2 billion, including approximately $1.2 billion of net debt from DRS.

Finmeccanica designs and manufactures civil and military aircraft, satellites, missiles and defense electronics and security.

DRS supplies integrated products, services and support to military forces, government agencies and prime contractors worldwide.

(Reporting by Zaida Espana; Editing by Rory Channing)