Samsung Hong Kong Limited has mandated Deutsche Bank, Fleet Boston Financial, KDB Asia and West LB as lead arrangers of a $100 million transferable term loan facility.
The three-year loan facility is redeemable at the lender's election after the second year, otherwise, the coupon will step up for the third year. Parent Samsung Corporation, Korea, will guarantee the facility.
The deal has been set at 160bp over Libor for the first two years, and will increase to 180bp if the loan is extended to the third year. The repayments will be made on a bullet basis, and, according to Paul Smith, managing director and head of bond and loan syndications at Deutsche Bank, will likely come from internal sources or further refinancing.
Smith expects broad participation by banks, both European and Asian, as with the last syndicated loan for the Samsung subsidiary. However, he admits that participation fees will be tighter for banks this time, as it will reflect better market conditions and general outlook for the group. The last syndicated loan deal was closed in August 2000 and the lead arrangers were Arab Bank plc and Sumitomo Bank. The $50 million deal had a maturity of two years with a spread of 165bp over Libor. The fees then were 100bp for $10 million undertaking.
Funds from this new facility will be used for general corporate funding purposes, including the refinancing of existing debt.General syndication will commence on Thursday, and the close of the facility is expected at the end April.