London: Qatar Telecommunications Company (Qtel) has launched general syndication of a $2 billion (Dh7.344 billion) loan that will result in a reduction in its borrowing costs, the arranging banks announced.
The loan is already fully subscribed, with 14 banks on the deal. Funds raised in general syndication will be used to scale back the banks' commitments, a banker close to the deal said.
Qtel is refinancing a $2 billion forward-start loan agreed last September. It is the latest in a string of borrowers to replace a forward start signed last year following a dramatic reduction in pricing for highly rated companies in Europe and, to a lesser extent, the Gulf.
Forward-start loans were popular in 2009 for companies facing maturing loans, as they enabled borrowers to extend the deals in return for a hefty increase in pricing on the existing credit. However, in light of falling margins, they are now looking expensive, and borrowers are keen to replace them.
- The new deal is split between a $1.25 billion, three-year tranche.
- 14 banks have subscribed to the loan
- $1.25b the deal is split between three-year tranche