RLPC-EDF launches 11 bln pounds loan for British Energy buy

LONDON, Oct 3 (Reuters) - EDF (EDF.PA) has launched an 11 billion pounds ($19.46 billion) loan backing its 12.5 billion pounds acquisition of British Energy BGY.L to its senior relationship banks, the company said on Friday.

EDF's bid was recommended by British Energy's board on Sept. 24 and EDF and Centrica (CNA.L) are in discussions for Centrica to buy a 25 percent interest in British Energy, according to the company.

EDF's loan has been conservatively structured with short-term maturities and generous pricing of over 100 basis points (bps) over LIBOR that is designed to cover banks' increased funding costs.

The loan includes a 5.5 billion pounds 364-day term loan with a 364-day extension option, which pays a margin of 100 bps over LIBOR for the first six months, rising to 110 bps thereafter.

It also has a 5.5 billion pounds three-year term loan paying a margin of 120 bps. The interest margin is linked to a ratings grid.

The high interest margins emphasise the dislocation in the illiquid European loan market, which is already currently trying to digest around $94.5 billion of M&A loans for InBev INTB.BR, Schaeffler and Gas Natural (GAS.MC).

EDF, which is 84.8 percent owned by the French state, paid a margin of 12.5 bps over EURIBOR when it secured a 6 billion euro refinancing in 2005.

EDF said it intends to refinance the facilities in the debt capital markets in the near future.

Banks are being invited to make take and hold commitments of 500 million pounds across the tranches for mandated lead arranger fees of 10 bps and participation fees of 70 bps.

The loan is in the market via bookrunners and underwriters Bank of Tokyo Mitsubishi, Barclays, BNP Paribas, Calyon, HSBC, Royal Bank of Scotland and Societe Generale. (Reporting by Zaida Espana; Editing by Paul Bolding)