LONDON, Feb 23 (Reuters) - Swedish utility Vattenfall [VATN.UL] is partially financing its planned 10.3 billion euro acquisition of Dutch utility Nuon’s production and supply arm with a 5 billion euro bridge loan, it said on Monday.
Vattenfall will use the 5 billion euro ($6.46 billion) bridge loan and cash to finance its purchase of an initial 49 percent stake in Nuon’s production and supply unit.
It then plans to buy the remaining 51 percent stake over the next six years, under fixed terms.
The 5 billion euro bridge loan has a one-year maturity with an option to extend 2.5 billion euros of the loan for a further year, Vattenfall’s web site said.
Vattenfall will pay a margin of 150 basis points (bps) over EURIBOR for the first six months, stepping up by 75 bps for the next six months. Margins will then rise by 50 bps every six months after the first year if the facility is extended.
The loan has been arranged by a group of Vattenfall’s major core relationship banks including Barclays, BNP Paribas, Citigroup, Deutsche Bank, JP Morgan, Nordea, Royal Bank of Scotland, SEB and Societe Generale, sources familiar with the deal said.
Vattenfall will refinance the bridge loan in 2009 with notes issued under its existing European medium-term note programme, which will be increased from 9 billion euros to 15 billion euros, the company said.
The Swedish utility also plans to carry out substantial divestments and will cut its 2009-2013 capital expenditure plan to 191 billion Swedish kroner, from 202 billion Swedish kroner.
Vattenfall, which is rated A- by Standard & Poor’s and A2 by Moody’s, said it remains committed to maintaining credit ratings in the single A category.
Nuon’s grid company Alliander is not included in this transaction. For more details of the acquisition, go to [ID:LN321481] (Reporting by Zaida Espana; Additional reporting by Quentin Webb; Editing by Andrew Macdonald)