LG Electronics deal launched into general syndication

Pricing on the current deal is cheaper than a $200 million three-year loan-style FRN earlier this year.

After raising $200 million in May, the electronics giant is back in the loan markets again. Mandated arrangers Citi/SSB, Kookmin Bank and Shinhan Bank launched a $200 million dual-tranche loan-style FRN into general syndication last week.

Split equally, the current transaction pays a spread of 50bp over Libor for the two-year tranche and 60bp over Libor for the three-year tranche. The deal has no guarantor and was launched directly into general syndication, which is slated for close on October 4.

Marketed on four levels, banks joining the deal on the highest level as co-arrangers with commitments of $20 million or above receive management fees of 42bp (all-in of 71bp) for the two-year tranche and 63bp (all-in of 81bp) for the three-year tranche. On the lower levels, lead managers committing $10-$19 million receive 38bp (all-in of 59bp) and 57bp (all-in of 78bp), senior managers committing $5-$9 million receive 34bp (all-in of 55bp) and 51bp (all-in of 72bp), while managers committing $2-$4 million receive 30bp (all-in of 51bp) and 45bp (all-in of 66bp) for the two and three-year tranches respectively.

Pricing on the current deal is cheaper than that paid by the borrower on its $200 million three-year loan-style FRN earlier this year. According to figures provided by Dealogic, LG Electronics paid a spread of 66bp over Libor on that deal, which itself was nearly one-third of the 190bp it paid on a $100 million five-year FRN deal in November 2001. Prior to that deal LG Electronics had paid 140bp over Libor on a similar-sized two-year loan-style FRN in April 2000.

Citi/SSB and Kookmin Bank are the joint bookruners and publicity agents for the latest borrowing, while Shinhan Bank is in charge of documentation.

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