LONDON, Sept 16 (Reuters) - German postal and courier business Deutsche Post is seeking to refinance its existing 2 billion euro ($2.67 billion)credit facility, which is due to mature in December 2015, banking sources said.
Baa1/BBB+ rated Deutsche Post is taking advantage of current loan market conditions to refinance early at lower interest rates.
A low deal flow environment and competitive bank market has pushed European loan pricing down throughout the year, encouraging many highly-rated companies to refinance early.
Deutsche Post’s new financing is being coordinated by Commerzbank, the company confirmed in a phone call on Monday.
The facility pays a margin of around 30 basis points (bps) over Euribor, banking sources said, significantly lower than the 55 bps being paid on Deutsche Post’s existing facility, which was arranged in December 2010.
The margin on the new deal is also inside the company’s five-year credit default swaps, which were quoted at 43.61 on Friday, according to Thomson Reuters CreditViews.
The existing 2 billion euro financing was arranged by bookrunners and mandated lead arrangers Citigroup, Commerzbank, Deutsche Bank and HSBC, with a total of 18 banks participating in the financing. ($1 = 0.7489 euros) (Editing by Christopher Mangham)