A 700 million-euro three-year portion of the facility pays an initial margin of 290 basis points, or 2.9 percentage points, more than the euro interbank offered rate, said the people, who asked not to be named because the terms are private. A 2 billion-euro five-year tranche has an initial margin of 350 basis points more than Euribor, the people said.
Peugeot is refinancing the credit line alongside a 3 billion-euro capital increase announced last week. Incoming Chief Executive Officer Carlos Tavares said the new capital, from China’s Dongfeng Motor Corp. and the French state, will be used to increase research and development and focus on the most profitable vehicles after the manufacturer fell behind competitors.
The new revolving credit facility will replace 2.4 billion euros of existing loans, and is conditional on completion of the capital increase, the company said last week.
The margins are linked to a ratings grid, and will rise if the company’s credit is cut and fall if it’s upgraded, said the people. In a revolving credit facility money repaid can be borrowed again.
BNP Paribas SA, Citigroup Inc., Credit Agricole SA, Deutsche Bank AG, HSBC Holdings plc, Industrial and Commercial Bank of China Ltd., Natixis SA, Banco Santander SA (SAN) and Societe Generale SA underwrote and are syndicating the debt, the people said.
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