RLPC-BHP’s $45 bln loan shown to relationship banks-sources

* Selldown of BHP’s $45 bln loan begins

* Banks asked for up to $2.5 bln each

* Repayment through cash generation, bond issues

LONDON, Aug 19 (BestGrowthStock) – Arranging banks on BHP Billiton’s
(BHP.AX: ) (BLT.L: ) $45 billion loan backing its hostile bid for
Canada’s Potash (POT.TO: ) are asking relationship banks for up to
$2.5 billion each in a wider syndication, bankers said on
Thursday.

Six banks are leading the jumbo loan, which is the loan
market’s biggest deal since December 2008 when Belgian brewing
giant ABInBev (ABI.BR: ) took a $45 billion loan to finance its
acquisition of Anheuser Busch in December 2008.

“The deal shows banks’ capacity to underwrite and in 3-4
weeks time will show the market’s capacity to suck up the
liquidity and absorb the deal,” a banker close to the deal said.

The deal is being syndicated to BHP’s relationship banks in
a one-stage syndication more akin to a club-style execution
rather than a wider retail syndication with higher pricing to
attract the marginal dollar and investor, bankers said.

The loan comprises a $25 billion, 364-day bridge loan to
bond issues, a $10 billion, three-year, term loan, a $5 billion
three-year, revolving credit facility, and a $5 billion,
four-year, revolving credit facility. The one-year term loan can
be extended for a further year.

The loan was unequally underwritten by Banco Santander,
Barclays Capital, BNP Paribas, JP Morgan and Royal Bank of
Scotland. TD Securities is acting as mandated lead arranger and
bookrunner on a take and hold commitment.

BHP Billiton has locked up the bookrunners with a financing
exclusivity agreement, two bankers said, while the relationship
banks approached will not be locked in, another banker added.

Further details of the jumbo loan financing are expected to
be included in a filing to the U.S. Securities and Exchange
Commission on Friday, which will outline the terms of BHP’s
offer.

REPAYMENT OPTIONS

BHP expects that the loan will be repaid through a
combination of cash generation and bond market issuance,
depending on market conditions, and the company intends to
maintain a balance sheet in line with a solid ‘A’ rating.

A bond refinancing is expected to be launched after the deal
receives regulatory clearance, a banking source said earlier.

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 will challenge loan market
capacity, bankers expect it to be well received. BHP is seen as
a good credit with plenty of ancillary business and has a track
record of treating its banks well, they said.

(Reporting by Alasdair Reilly & Tessa Walsh; Editing by
David Cowell)

RLPC-BHP’s $45 bln loan shown to relationship banks-sources