BHP seen pressing on with Rio bid despite crisis

By Eric Onstad

LONDON (Reuters) - Miner BHP Billiton (BLT.L) may have to pay more for a $55 billion (31 billion pound) loan as the credit crisis deepens, but this is unlikely to force it to abandon its $95 billion all-share takeover bid for rival Rio Tinto (RIO.L).

Questions were raised about BHP's stance after Xstrata (XTA.L) cancelled its proposed acquisition of No. 3 platinum producer Lonmin (LMI.L) on Wednesday due to problems in arranging favourable loan terms due to the credit crisis.

BHP, however, had arranged its jumbo syndicated loan with a series of banks in February, well before the latest wave of financial turmoil hit markets and froze lending.

"The financing is in place, the letters of commitment are there. From a BHP perspective it doesn't make any difference, except it will have to pay a higher margin," said a London hedge fund manager who declined to be named.

"Yes, they'll get hurt from it, it's probably 1 or 2 percent more expensive to BHP, but the overall impact from synergies from the deal would be much larger."

BHP first signed a loan agreement with seven banks on February 5 and signed an amended deal on March 31.

Barclays, BNP Paribas, Citibank, Goldman Sachs and HSBC are committed for $8.5 billion each, according to the agreement, while Santander agreed to $7 billion and UBS to $5.5 billion.

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