Investors led by Macquarie Group Ltd. hired nine banks to underwrite more than 2 billion euros ($2.5 billion) of loans to back their acquisition of EON AG’s Open Grid Europe distribution network, according to two people with knowledge of the situation.
Bank of Nova Scotia, BNP Paribas SA, Export Development Canada, Commerzbank AG, Credit Agricole SA, ING Groep NV, Royal Bank of Canada, Societe Generale SA, and UniCredit SpA underwrote the financing that will amount to about 2.5 billion euros when undrawn working capital and investment facilities are included, said the people, who declined to be identified because the deal is private.
Germany’s largest utility said today it agreed to sell the network of natural-gas pipelines in the country to the Macquarie-led group for 3.2 billion euros. EON said it expects the deal, which requires approval from German authorities, to be concluded in the third quarter.
The debt, which will have three and five-year tranches, has been structured to support an investment-grade rating and may be refinanced by bonds later, said the people.
Canadian Imperial Bank of Commerce, HSH Nordbank AG and SEB AB have joined the underwriters for the financing, said the people.
Karen Smith, a Macquarie spokeswoman in London, declined to comment.
Open Grid Europe operates about 12,000 kilometers (7,450 miles) of gas transmission pipes in Germany, according to its website. Funds managed by Macquarie Infrastructure and Real Assets completed the purchase of RWE AG’s German gas grid unit in 2011.