Banks Seal Multi-Million Dollar Deals in Global Loan Market

Strategic Insights -

Banks from around the world are actively engaged in large-scale loan transactions, as highlighted by recent reports of a $100 million credit facility provided by BankBoston for APP Paper Trading, a sales arm of Asia Pulp & Paper Company Ltd. This secured revolving credit facility, which garnered a 22% oversubscription during general syndication, has set the stage for a flurry of similar deals. Other notable transactions include a short-term $50 million credit facility arranged by BankAmerica for Telecom Argentina, a syndicated loan of $91.8 million provided by Bankgesellscaft Berlin, the European Bank for Reconstruction & Development, and Hamburgische Landesbank for Hansa Bank, and a $105 million loan offered by West LB for Tyumen Oil Co.

Key Takeaways:

  • BankBoston has wrapped a $100 million credit facility for APP Paper Trading, with a 22% oversubscription during general syndication, priced at Libor plus 175 basis points, with fees of up to 1%.
  • The secured revolving credit facility will be used to finance the maintenance of inventory stored in Singapore and receivables generated from inventory sales.
  • Dresdner Kleinwort Benson, Development Bank of Singapore, Bayerische Hypo-Und Vereinsbank, Norddeutsche Landesbank Girozentrale, Natexis Banque BFCE, Banque Worms, Bayerische Landesbank Girozentrale, Hua Nan Commercial Bank, and Bank of Nova Scotia are fellow arrangers on the deal.
  • BankAmerica has been given the mandate to arrange a short-term $50 million credit facility for Telecom Argentina, priced at a spread of Libor plus 275 basis points for the first six months, Libor plus 300 basis points in months seven through 12, and Libor plus 325 basis points for the remainder of the loan's tenor.
  • The syndication of Telecom Argentina's loan will be conducted on a club basis, with commitments due on October 29.
  • Bankgesellscaft Berlin, the European Bank for Reconstruction & Development, and Hamburgische Landesbank are working on a 150 million mark ($91.8 million) syndicated loan for Hansa Bank, split between a five-year DM50 million A tranche priced at 215 basis points over the six-month Libor rate and a three-year DM100 million B tranche priced at Libor plus 175 basis points.
  • Hansa will use the proceeds from the facility to increase lending and banking activities.
  • The facility for Hansa will see co-arrangers receiving 80 basis points for DM10 million commitments, lead managers earning 70 basis points for DM7.5 million, managers receiving 60 basis points for DM5 million, and participants getting 50 basis points for DM2.5 million.
  • West LB has reportedly provided Tyumen Oil Co., one of Russia's largest oil producers, with a $105 million loan, priced at Libor plus 450 basis points, which will be used for working capital and to maintain export levels.
  • Six banks have signed onto a HK$230 million ($29.6 million) credit facility for Fountain Set Holdings, arranged by Standard Chartered Bank, The Bank of Nova Scotia, and BankAmerica. The transferable loan facility is priced at 2.47 percentage points above the Hong Kong Interbank Offered Rate and will be used to refinance an existing $38 million of convertible guaranteed notes.
  • Fountain Set reported profits of $120.54 million for the six months ending last February.

Statistics:

  • The $100 million credit facility provided by BankBoston for APP Paper Trading was oversubscribed by 22% during general syndication.
  • The secured revolving credit facility has a pricing of Libor plus 175 basis points, with fees of up to 1%.
  • The $50 million credit facility arranged by BankAmerica for Telecom Argentina has a tenor of 18 months, with different pricing structures for different periods.
  • The 150 million mark ($91.8 million) syndicated loan for Hansa Bank is split between a five-year DM50 million A tranche and a three-year DM100 million B tranche.
  • The facility for Hansa will see co-arrangers receiving 80 basis points for DM10 million commitments, lead managers earning 70 basis points for DM7.5 million, managers receiving 60 basis points for DM5 million, and participants getting 50 basis points for DM2.5 million.
  • West LB's $105 million loan to Tyumen Oil Co. is priced at Libor plus 450 basis points.
  • The HK$230 million ($29.6 million) credit facility for Fountain Set Holdings is priced at 2.47 percentage points above the Hong Kong Interbank Offered Rate.

Sources:

  • * BankBoston is reported to have wrapped a $100 million credit facility for APP Paper Trading.
  • * Telecom Argentina has given BankAmerica the mandate to arrange a short-term $50 million credit facility.
  • * Bankgesellscaft Berlin, the European Bank for Reconstruction & Development, and Hamburgische Landesbank are in the market with a 150 million mark ($91.8 million) syndicated loan for Hansa Bank.
  • * West LB has reportedly provided Tyumen Oil Co. with a $105 million loan.
  • * Six banks have signed onto a HK$230 million ($29.6 million) credit facility for Fountain Set Holdings.
  • * Fountain Set reported profits of $120.54 million for the six months ending last February.