PSA Peugeot Citroen will sign about €5.3 billion of loans for its bank unit in the next week after lenders offered more than it was originally estimated.
According to two people familiar with the matter quoted by Bloomberg, the refinancing comprises a €4.1 billion five-year term loan and a €1.2 billion three-year forward start facility. The refinancing is part of a €11.5 billion deal to shore up PSA’s finances. A forward-start deal extends the maturity of facilities before the debt expires.
The term loan was increased from €3.6 billion after attracting demand from lenders led by BNP Paribas SA, Credit Agricole SA, Natixis and Societe Generale SA, said the unnamed sources. The rest of the debt comprises loans agreed individually with banks.
PSA Peugeot Citroen is trying to sustain is Banque PSA Finance division as Moody’s Investors Service is considering whether to cut the unit’s credit rating to junk because of slumping car sales. On December 20, PSA’s chief financial officer Jean-Baptiste de Chatillon said the company had reached an agreement with around 20 banks for the financing.
As part of the plan to revive its banking unit, Peugeot also received €7 billion in guarantees from the French government to issue new bonds, allowing it to raise money at lower interest rates.