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RLPC-Imperial Tobacco ups pricing on Altadis loan-bankers

Mon Feb 11, 2008 10:42am EST

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LONDON Feb 11 (Reuters) - Imperial Tobacco (IMT.L) increased pricing on the 9.2 billion pounds ($17.9 billion) financing backing its acquisition of Franco-Spanish cigarette maker Altadis ALT.MC to take account of difficult loan market conditions before launching the deal to a wider syndication on Monday, banking sources close to the deal said.

The loan, which is being arranged by Banco Santander, Barclays Bank, Citigroup, Lehman Brothers and Royal Bank of Scotland has seen pricing increased by 15 basis points (bps) across all tranches, sources said. The loan now pays an interest margin of 60-72.5 bps over LIBOR/EURIBOR.

Participation fees on the deal have also been increased to encourage commitments from a less liquid loan market as calls on banks' balance sheets increase amid the financial crisis. Although pricing on the loan has been increased, rising credit default swap pricing is highlighting the growing differential. Imperial Tobacco's five-year credit default swaps are currently trading in the 147-157 bps range.

(Reporting by Alasdair Reilly; Editing by Rory Channing)



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