Peugeot-Citroen Agrees EUR1.8B Loan; Syndication Underway

9th Jun 2010 16:03

LONDON (Dow Jones)--French auto maker PSA Peugeot-Citroen (UG.FR) has agreed a EUR1.8 billion loan refinancing with a group of banks that was launched into syndication earlier this week, the arranging banks said Wednesday. The new loan has a maturity of three years with two one-year extension options, exercisable at the lenders' discretion. The initial margin on the loan is 170 basis points over Euribor ratcheting according to a credit ratings grid, the banks said. This margin is significantly higher than pricing on the existing facility of 17 basis points over Euribor which was agreed toward the height of the bull market. The new loan is to refinance an existing EUR2.4 billion multicurrency revolving credit signed in 2005 which matures in March 2011. Peugeot's long-term credit ratings are Baa3 by Moody's Investors Service Inc. and BB+ by Standard & Poor's Corp. Bookrunners on the loan refinancing are BNP Paribas SA, Crédit Agricole Corporate and Investment Bank, HSBC France, Natixis, Royal Bank of Scotland Group PLC and Société Générale Corporate and Investment Banking. Banco Santander SA, Paris Branch, Citigroup Global Markets Ltd. and Commerzbank AG are participating as mandated lead arrangers. Peugeot-Citroen's product mix improved substantially in May, continuing a trend that is allowing the company to sell a bigger proportion of larger, higher-margin cars while demand for smaller vehicles is waning, Jean-Marc Gales, executive vice president for sales and marketing for the Peugeot and Citroen brands, said earlier this week. Peugeot-Citoen's European market share has been growing steadily, from 13.5% in 2008 to 13.7% in 2009 and 14.6% in the first quarter of this year. -By Carol Dean, Dow Jones Newswires; 44 20 7842 9306; [email protected] (END) Dow Jones Newswires June 09, 2010 11:03 ET (15:03 GMT)