Origin Asks for Commitments on Australia’s Biggest Loan in 2013

Origin Energy Ltd., Australia’s largest electricity retailer, is asking its most important lenders to commit to a A$7.4 billion ($6.7 billion) banking facility, according to four people familiar with the situation.

The loan is the largest in Australia and New Zealand this year, according to data compiled by Bloomberg. The company has requested large commitments from those lenders before extending the invitation to others, the people said. The banks can either hold the loans on their balance sheets or participate as sub-underwriters of the deal, they said.

The debt is underwritten by Australia & New Zealand Banking Group Ltd., Bank of America Corp. Merrill Lynch, Goldman Sachs Group Inc., JPMorgan Chase & Co. and UBS AG, according to a company statement yesterday. The new loan is “more than sufficient to refinance all existing bank debt,” it said.

Sydney-based Origin posted a 15 percent drop in full-year underlying profit, according to a stock exchange filing yesterday. It needs about A$4.1 billion to fund its share of the A$24.7 billion LNG venture with ConocoPhillips in Queensland through when it begins production in 2015, it said.

Origin’s new loan is divided into five tranches, and only four will be sold down, with original managers and book-runners holding the rest of the loan, according to the people familiar with the deal. The split of tenor across the tranches is of about 60 percent four-year and 40 percent five-year debt, they said.

Origin expects invited banks to respond by early September and to then sell the loan to a wider group of banks, the sources said.

Anneliis Allen, a Sydney-based spokesperson for the company, declined to comment on any details that weren’t in yesterday’s statement.

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