BHP in loan of over $40 billion for Potash: bankers

By Alasdair Reilly & Tessa Walsh

LONDON (BestGrowthStock) – BHP Billiton is set to announce a syndicated loan of more than $40 billion on Wednesday afternoon as it gives further details of its hostile bid for Canada’s Potash, banking sources said.

Six banks are leading the fully underwritten loan — JP Morgan, TD Securities, Banco Santander, Barclays Capital, BNP Paribas and Royal Bank of Scotland — which is expected to be syndicated from Europe.

The deal has been unequally underwritten by the six banks. BHP is understood to have locked up its lenders with a financing exclusivity agreement, one of the bankers said.

BHP said earlier on Wednesday it has a “new multi-currency term and revolving facility agreement entered into for the purpose, among other things, of meeting the funding requirements of the transaction.

BOND REFINANCING

The deal, which will carry a pricing premium due to its size, will be refinanced with bond issues after the deal receives regulatory clearance, the banker said.

Bankers do not expect significant anti-trust issues and said there is a decent chance that the acquisition could close before the end of the year.

Although a deal of this size could challenge loan market capacity, bankers expect it to be well received. BHP is viewed as a good credit with ancillary business and has a track record of treating its banks well, they said.

(Reporting by Alasdair Reilly & Tessa Walsh; Editing by Erica Billingham)

BHP in loan of over $40 billion for Potash: bankers