May 12, 2017 / 12:38 AM / 3 years ago

Lenders line up close to A$5.5bn for Macquarie's Endeavour buy

SYDNEY, May 12 (Reuters Basis Point) - A large syndicate, with ANZ, Commonwealth Bank of Australia and Westpac as leads, has clubbed a loan of close to A$5.5bn (US$4bn) for a A Macquarie Group-led consortium’s A$7.62bn acquisition of New South Wales power grid Endeavour Energy.

The loan includes significant bridge tranches to be refinanced in the debt capital markets. However, the loan syndication task is said to be modest given the large number of banks involved.

There are well over 10 involved, including Japanese mega banks, as well as Asian, Canadian and European lenders. The pricing is said to be more competitive than the 105bp (3.5 year), 135bp (five-year) and 160bp (seven-year) over BBSY that Industry Funds Management and AustralianSuper paid for their AusGrid acquisition.

The margins for the Endeavour loan are in line with what Hastings Funds Management and First State Super are expected to pay for their A$1.62bn loan to back their acquisition of NSW land registration agency Land and Property Information.

The acquisitions, expected to close in the second quarter, will go a long way to boost the tepid Australian loan market, where volumes crashed 53% to a seven-year low of US$7.15bn in the first quarter.

The Macquarie consortium acquired a 50.4% stake in Endeavour at a premium to the company’s total regulated asset base of A$6.2bn, Reuters reported. Macquarie’s consortium partners are Canadian fund British Columbia Investment Management, Australia’s AMP Capital and Qatar Investment Authority.

The consortium is also responsible for refinancing all of Endeavour’s existing debt, according to the Reuters report. (Reporting by Sharon Klyne; editing by Dharsan Singh)

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