Qtel splits US$2bn refinancing to lower cost of borrowing
Qtel, the Qatari operator, plans to split the US$2bn loan that it is currently trying to refinance into two tranches to help cut its borrowing costs.
The former monopoly operator wants to split the US$2bn facility between a US$1.25bn, three-year tranche…
Qtel, the Qatari operator, plans to split the US$2bn loan that it is currently trying to refinance into two tranches to help cut its borrowing costs.
The former monopoly operator wants to split the US$2bn facility between a US$1.25bn, three-year tranche paying 125bp above Libor and a US$750m, five-year tranche paying 155bp above the inter-bank rate.
The telco approached Gulf bankers on 12 April to finalise terms for the loan. Qtel will use the new facility to refinance an existing US$2bn forward-start loan, which the company took out in September last year.
In 2009, many corporates used forward-start facilities to extend the duration of their borrowing at the cost of paying a higher margin. The forward-start facility cost Qtel 250bp above Libor.
Qtel’s decision to refinance now – even though the forward-start facility does not mature until November 2011 – shows that the company believes bank financing has improved over the last seven or eight months.
BNP Paribas, DBS Bank, Qatar National Bank, RBS and Société Générale all expect to act as bookrunners or arrangers on the loan.
Qtel declined to comment.
