RLPC-Relationship management pays off for Linde-sources

LONDON, July 3 (Reuters) - German industrial gases firm Linde secured a 1.6 billion euro ($2.24 billion) loan extension at borrower friendly rates after relationship managers were asked to assist in talks, banking sources said on Friday.

The new forward start loan signed on Wednesday extends the maturity of a portion of an existing 2 billion euro undrawn revolving credit facility by two years, when it matures in 2011.

Forward start facilities allow borrowers to lock in loans ahead of maturity in return for increased margins and fees.

Linde (LING.DE) was initially self-arranging the deal and had been in bilateral discussions with banks for around eight weeks before opting to go down the club loan route, bankers close to the deal said.

Relationship managers were then brought in to negotiate the loan with a club syndicate of banks, the bankers said.

"We discussed properly what the company needed and what the banks needed to get the deal done," one of the bankers said.

Lenders on the deal were offered 40 basis points (bps) to extend their commitments and annual loyalty and other fees of 80 bps until March 2011, when the forward start becomes active and a new margin of 200 bps begins, another banker said.

The existing deal, which partly backed Linde's acquisition of BOC Group in 2006, pays a margin of 55 bps over EURIBOR.

Linde would not confirm pricing details.

Around 24 of Linde's relationship German and international banks participated in the facility coordinated by Deutsche Bank and Morgan Stanley, and the deal raised over 1.6 billion euros in commitments.

The deal was subsequently increased from a target amount of 1.5 billion euros.

Linde intends the financing to remain undrawn and it will serve as the company's primary source of liquidity.

Linde is rated BBB+ by Standard and Poor's and Baa1 by Moody's. ($1=.7133 Euro) (Reporting by Alasdair Reilly; editing by Simon Jessop)