Vivendi seeks 4.5 bln euro loan for Zain buy

LONDON (Reuters) - French media and telecoms giant Vivendi (VIV.PA) is seeking a 4.5 billion euro ($6.26 billion) syndicated loan to back its acquisition of a majority stake in Zain Group's (ZAIN.KW) African telecoms operations, bankers said.

Vivendi is currently exploring all options to finance the potential deal, which includes loan, bond and equity issues.

Vivendi has sent a request for proposals to banks for a bridge loan with a maturity of up to two years that would be refinanced by a combination of bond and equity issues.

The initial bridge loan, which would consist of three 1.5 billion euro tranches, is likely to be provided by a group of five or six banks on a club basis.

Calyon is advising Vivendi on the acquisition and BNP Paribas and UBS are advising Zain on the disposal, bankers said.

Vivendi is seeking to strike a hard bargain with its bankers with an initial interest margin on the 12 and 18 month tranches of around 125 basis points (bps) over EURIBOR, while a two-year tranche will pay around 150 bps.

The margin will then increase by around 25 bps every three months to encourage Vivendi to refinance the bridge loan. Pricing is also linked to the company's rating.

The French media and telecoms group, a well-known loan market borrower, said on Thursday it was committed to keeping its BBB credit rating intact and maintaining its dividend at current levels.

Vivendi's five-year credit default swaps widened sharply by about 26 bps to 153 bps, Markit data showed, as credit analysts said that a big and mostly debt-financed acquisition would be credit negative for Vivendi.

The new 4.5 billion euro loan will boost Vivendi's loan market borrowing to around 12 billion euros -- as of February, Vivendi had 7.5 billion euros ($10.44 billion) of existing syndicated loans according to Thomson Reuters LPC data, but relationship banks are expected to support the deal.

"Vivendi is a company with a strong relationship bank group which is very experienced in the capital markets. Depending on the size of the deal, a financing shouldn't really be a problem," another banker said.

Zain, whose biggest shareholder is Kuwait's sovereign wealth fund, spent more than $12 billion to expand in Africa since 2005 with an additional $2 billion planned for this year and also paid $6.1 billion for the third Saudi mobile license in 2007.

($1=.7184 Euro)

(Reporting by Zaida Espana & Tessa Walsh; Editing by Jon Loades-Carter)