Australia’s Telstra Corp. (TLS) has closed its first syndicated loan in five years with a A$1.5 billion ($1.4 billion) revolving credit as the country’s largest phone company diversifies its funding sources.
The three-year multicurrency facility attracted a total of 21 banks, according to an e-mailed statement from Bank of Tokyo-Mitsubishi UFJ Ltd., one of the arrangers. Bank of China Ltd., Commonwealth Bank of Australia, National Australia Bank Ltd. and Westpac Banking Corp. were the other arrangers, according to BTMU. While the company received more than A$2 billion in pledges from lenders, it chose not to increase the facility in size, it said.
Syndicated lending in the Asia-Pacific region outside Japan surged in the first half to the highest level since 2011, as companies took advantage of falling borrowing costs to expand their business and refinance debt. Loan volumes climbed 21 percent from a year earlier to $240 billion, according to data compiled by Bloomberg.
The A$1.5 billion facility will be the second-biggest syndicated financing in Australia this year, the data show. The biggest is the $5.5 billion syndicated portion of Roy Hill Holdings Pty’s iron-ore mining project loan signed in March.
Telstra’s new revolving loan offers an initial margin of 80 basis points more than the applicable base rate, according to the statement. Margins for U.S. dollar-denominated loans in Asia outside Japan averaged 235 basis points this year, compared with 266 basis points at the end of 2013, Bloomberg data show. A basis point is 0.01 percentage point.
The Melbourne-based company will use the proceeds for general corporate purposes and to further diversify funding sources, according to the statement. The last time Telstra approached the syndicated loan market was in May 2009.
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