Henkel AG, the German maker of industrial adhesives, is marketing an 800 million-euro ($1.1 billion) revolving credit, according to two people with direct knowledge of the deal.
The five-year loan, which includes two one-year extension options, will pay initial interest of 40 basis points more than the London interbank offered rate, one of the people said, who declined to be identified because the terms are private. Deutsche Bank AG and Citigroup Inc. are coordinating the loan, the people said.
Henkel will pay additional utilization fees of as much as 25 basis points if more than one-third of the facility is used, and 37.5 basis points for more than two-thirds. There will also be a 50 basis-point premium to borrow in dollars. A basis point is 0.01 percentage point.
The loan will replace a 1.4 billion-euro revolving credit maturing in April, the people said. The facility was signed in 2005 and paid interest of 17.5 basis points more than benchmark rates, according to data compiled by Bloomberg.
Henkel has investment-grade rankings of A2 from Moody’s Investors Service, A from Standard & Poor’s and A from Fitch Ratings, according to Bloomberg data.