The five-year term financing will extend two revolving credit facilities expiring in April and November totaling 2 billion euros, according to four people with knowledge of the matter who asked not to be named as the deal is private. The remainder of the debt will not be replaced, the people said.
Lisbon-based EDP is offering to pay an interest margin of at least 350 basis points more than benchmarks on the self- arranged deal, said the people. EDP pays a margin of 45 basis points more than the euro interbank offered rate on the credit line maturing in April, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.
The forward-start transaction, a type of deal that locks in financing terms before existing borrowings mature, may be signed as early as this week, the people said. Under a revolver, money repaid can be borrowed again; in a term loan, it can’t.
Ricardo Farinha, a manager in EDP’s investor relations division, declined to comment on the financing.
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