UPDATE 3-SingTel secures more than S$1 bln in loans
(Adds comments from SingTel, share price)
SINGAPORE, Nov 14 (Reuters) - Singapore Telecommunications (STEL.SI), Southeast Asia's biggest phone company, said it signed agreements for around US$710 million in bank credit facilities, signalling its ability to raise funds in a tight debt market.
The new credit lines, which replace existing facilities and will be used for working capital, do not necessarily signal a loosening in credit conditions, analysts said, but show banks will lend money to large firms with strong balance sheets.
"SingTel is one of the few companies with strong credit standing," said DMG & Partners analyst Terence Wong in Singapore. "It shows the market is still open for bigger companies."
A Sydney-based analyst, who declined to be named, said the credit lines will ensure SingTel remains liquid even after it pays its half-year dividend, and gives the firm a stronger bargaining position if it chooses to tap the commercial paper market.
"The market is open to the likes of SingTel and Telstra (TLS.AX), but who else it's open to remains to be seen," the analyst said.
SingTel, which owns Optus in Australia as well as stakes in several Asian mobile companies, did not disclose the terms of the credit lines, but noted the impact on its interest expenses will likely be minimal.
"Credit spreads are widening with new deals, but these are offset generally by lower base interest rates," a spokeswoman said.
SingTel said it signed two credit facilities worth a total S$1.075 billion:
The first is a S$350 million ($230 million) loan from Bank of Tokyo-Mitsubishi UFJ, DBS Bank (DBSM.SI) and Oversea-Chinese Banking Corp (OCBC.SI) that matures in November 2013; the second is a A$725 million ($480 million) 3.5-year facility from a group of Australian-based lenders.
The banks involved in the Australian syndicated facility, which extends to April 2012, are Australia & New Zealand Banking Group (ANZ.AX>, Bank of Tokyo-Mitsubishi UFJ, Citibank (C.N), Commonwealth Bank of Australia (CBA.AX) and Westpac Banking Corp (WBC.AX).
Standard & Poor's rates SingTel and Optus "A+", while Moody's Investors Services rates SingTel "Aa2" and Optus "Aa3".
SingTel said signing the credit agreements has no material impact on earnings per share or net tangible assets.
SingTel, majority-owned by state investor Temasek [TEM.UL], on Wednesday posted a 12 percent fall in quarterly profit and predicted lower full-year contributions from its associates around Asia due to a stronger Singapore dollar. [ID:nSIN296621]
SingTel shares were up 2.4 percent on Friday, in line with the broader share index .FTSTI. (Reporting by Kevin Lim, Editing by Ian Geoghegan)
