LONDON Feb 7 Telecom Italia SpA is in
talks with its banks over a 3 billion euros ($4 billion) loan
deal, banking sources said on Thursday, which could help protect
the company against possible future turbulence in debt markets.
The five-year forward-start loan will extend the maturity of
part of an existing 8 billion euro syndicated loan when it
matures in August 2014, the sources said.
The self-arranged financing is expected to launch to
existing banks in coming days, the sources said, with Telecom
Italia hoping to wrap up the deal before the Italian elections
on Feb. 24 and 25, one of the sources said.
Telecom Italia was not immediately available for comment.
Telecom Italia will pay less on its new loan than it did on
its 4 billion euro forward-start loan that signed in May 2012.
That loan, which also extended part of the 8 billion euro loan,
pays a margin of 250 basis points (bps) over EURIBOR.
Improving European loan market conditions mean that Telecom
Italia's new forward start is likely to pay an interest margin
of between 150 and 190 bps over EURIBOR, banking sources said,
with the opening margin expected to be at the higher end of that
scale, one of the sources said.
The existing 8 billion euro loan, originally put in place in
2005, paid a margin of just 22.5 bps, but the eurozone sovereign
debt crisis meant loan pricing for companies in economies such
as Spain and Italy rose dramatically last year.
Telecom Italia follows other companies from Europe's
peripheral economies this year in search of more advantageous
Italy's biggest utility Enel, Spain's Telefonica
and Portugal's EDP have all come to the loan
market to take advantage of better loan terms to extend the
maturity of existing deals. [ID:nRLP77406a
($1 = 0.7469 euros)
(Additional reporting by Danilo Masoni in Milan; Editing by