According to several banking sources, German carmaker Daimler has launched syndication of a loan to refinance and increase its existing 7 billion euro (6.01 billion pounds) credit line, due to mature in October 2015.
According to the sources, the new self-arranged facility is being coordinated by BNP Paribas, Deutsche Bank and HSBC and the financing which is not intended to be drawn, acts primarily as a back up for commercial paper drawings.
Daimler’s existing facility signed in October 2010 via a group of 34 banks from Europe, America and Asia. A-/A3 rated Daimler’s refinancing will pay around 27.5 basis points (bps) over EURIBOR, sources said, a significant reduction on the 60 bps it initially paid on its existing deal.
Low deal flow has put pressure on loan pricing as banks bid aggressively on deals to win loan business, encouraging highly rated European borrowers to refinance early to secure future liquidity at cheap pricing levels.