Qtel refi meets success

The resounding success of the refinancing of Qatar Telecom (Qtel)’s US$2bn forward-start facility is confirmation of returning appetite among lenders and attractive pricing for borrowers with high ratings, said bankers.
About 30 banks are expected to…

The resounding success of the refinancing of Qatar Telecom (Qtel)’s US$2bn forward-start facility is confirmation of returning appetite among lenders and attractive pricing for borrowers with high ratings, said bankers.

About 30 banks are expected to join in the US$2bn facility, with general syndication closing on May 12, said a source involved in the transaction.

“The general syndication of the transaction is receiving an extremely positive response,” confirmed another source close to the deal.

The new facility comprises a US$1.25bn three-year loan with a margin at 115bp over Libor and a US$750m five-year loan at 145bp. There is a utilisation fee of 10bp for drawings of more than 50%.

This is considerably lower than the margin of 250bp over Libor that Qtel secured when it signed its US$2bn forward-start facility last September. The forward-start facility replaced another US$2bn three-year loan that was due to mature in November 2009.

A number of telecoms companies resorted to expensive forward-start facilities last year to extend maturing loans, but they are now expected to take advantage of falling margins.

“We’re working a lot at the moment as there are a lot of deals in the pipeline,” said a debt banker.

BNP Paribas, DBS Bank, Qatar National Bank, RBS and SG are bookrunners.

A senior syndication closed in April with Bank of Tokyo Mitsubishi, Barclays Capital, Citigroup, Deutsche Bank, HSBC, Samba, SMBC, Standard Bank and WestLB joining in as initial mandated lead arrangers.

The facility is already fully subscribed but funds from the general syndication will enable banks to reduce their commitments.