EDF Said to Seek Interest Rate Reduction on 4 Billion-Euro LoanStephen Morris
Electricite de France SA asked lenders to cut the interest rate on a 4 billion-euro ($5.5 billion) credit line and extend its maturity, according to three people with knowledge of the request.
The world’s biggest operator of nuclear reactors is seeking to reduce the margin on the revolving credit facility to 20 basis points more than benchmark rates, said the people, who asked not to be identified because the terms are private. That compares with a 30 basis-point margin it currently pays on the deal, according to data compiled by Bloomberg. The Paris-based utility is also asking to extend the final repayment on the loan by at least five years, said the people.
Aurelien Cassuto, a spokeswoman for EDF in Paris, declined to comment on the details of the request.
EDF is seeking to capitalize on competition among banks to lower interest costs without having to pay the more expensive fees associated with a full debt refinancing, said the people. Another French company, Pernod Ricard SA, said today it got an interest-rate reduction and maturity extension on a 2.5 billion-euro credit line after making a similar request.
EDF is offering to pay an amendment fee of 10 basis points to existing lenders and a 20 basis-point fee to any new banks joining the deal, said the people.
The revolving credit facility, a type of debt where money repaid can be borrowed again, charges a 7.5 basis-point fee when it’s first drawn, climbing to 30 basis points when two-thirds of the loan is utilized, said the people.