RLPC-Spain's Martinsa Fadesa seeks loan refinancing

LONDON, Jan 11 (Reuters) - Spanish real estate firm Martinsa Fadesa (MFAD.MC: Quote, Profile, Research, Stock Buzz) is seeking to refinance an existing loan before it matures in September, after reducing it to 2.581 billion euro ($3.81 billion), a company spokesman told Reuters LPC on Friday.

Martinsa Fadesa cut the size of its loan to 2.581 billion euros from 2.995 billion euros after repaying 414 million euros in two instalments and is now seeking to refinance around 2 billion euros.

Martinsa Fadesa and its arranging banks Ahorro Corporacion, Caja Madrid, La Caixa and Morgan Stanley are in refinancing talks as the company seeks to extend the maturity of the loan to five or seven years, the spokesman said.

The loan was part-repaid by group revenue, together with proceeds from the disposals of land and hotels, as well as the sale of a 50 percent stake in Fadesa's Moroccan unit Fadesa Maroc to local real estate firm Addoha for 169 million euro.

Refinancing negotiations began after the Martinsa Fadesa merger was approved in December 17 and were a condition of the company's existing facilities, the spokesman said.

Martinsa Fadesa originally took a 4 billion euro loan in April 2007 to finance its merger, but the credit was hit by negative sentiment towards the Spanish real estate sector after equity prices dropped in the first half of 2007.

The loan was cut to 3.016 billion in May after raising 850 million euros of equity privately, and was subsequently relaunched in June 2007, having increased the interest margin by 100 basis points (b.p.) to 350 b.p. over EURIBOR. A group of 35 banks signed into the transaction.

The group has a current loan-to-value ratio of 42 percent. (Reporting by Zaida Espana; Editing by David Cowell)