Pernod Ricard SA (RI) asked lenders to reduce the interest rate and extend the maturity of a 2.5 billion-euro ($3.4 billion) loan to take advantage of falling borrowing costs, three people with knowledge of the matter said.
Europe’s second-largest distiller wants to reduce the margin it pays on the revolving credit facility to 80 basis points more than the euro interbank offered rate, said the people, who asked not to be identified because the terms are private. That compares with 135 basis points when the deal was raised in April 2012, according to data compiled by Bloomberg. It also wants to reset the maturity of the loan for another five years.
Investment-grade borrowers are capitalizing on competition among banks to cut their interest costs. Carrefour SA, Schneider Electric SA, Siemens AG and Daimler AG have all refinanced credit lines this year at lower margins, according to data compiled by Bloomberg.
The Paris-based distiller is offering an amendment fee of 15 basis points to existing lenders, and a 25 basis-point fee to any new banks joining the deal, said the people.
The revolving credit facility, a type of debt where money repaid can be borrowed again, includes a fee if it’s drawn, climbing to 40 basis points when two-thirds of the credit line is utilized. A premium of 40 basis points to draw the facility in dollars will also be removed, said the people.
Pernod Ricard spokeswoman Sylvie Machenaud yesterday confirmed Olivier Guelaud, group treasury director, is in talks with banks. She declined to comment on the details of the request today.
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