May 22 (Bloomberg) -- Iberdrola SA got lender backing to increase a 1.5 billion-euro ($1.9 billion) credit line by 750 million euros and reduce a more expensive term loan by the same amount, according to a person familiar with the matter.
The Spanish utility, which is facing declining revenues in its domestic market, obtained consent from lenders holding 50 percent of the debt for the transfer, said the person, who asked not to be identified because the information is private. The term loan will total 750 million euros after the deal is complete.
The Bilbao, Spain-based company will pay a 25 basis-point, or 0.25 percentage point, fee to lenders that transfer their commitments, the person said. Officials in Iberdrola’s Madrid-based press office, who asked not to be named citing company policy, declined to comment on the financing.
The term loan pays interest at 105 basis points more than the euro interbank offered rate and the revolving part pays initial interest at 70 basis points, according to data compiled by Bloomberg. In a revolving credit facility, money may be borrowed again once it’s repaid; in a term loan it can’t.
Separately, the company has been in talks with banks to refinance a 2.6 billion-euro revolver due December 2014, two people said in March. That loan pays initial interest margin of 75 basis points more than Euribor, data compiled by Bloomberg show.
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