June 7 (Bloomberg) -- Siemens AG, Europe’s largest engineering company, plans to refinance at least $5 billion of credit lines ahead of maturity, two people familiar with the situation said.

Lenders have held discussions with the company to renew, possibly in the third quarter, financing due in March, said the people, who declined to be identified because the talks are private.

Siemens won the lowest interest rate on a European company loan in nearly a decade in 2005 when it arranged the deal with Deutsche Bank AG, Citigroup Inc. and six other banks. The credit cost 15 basis points more than the London interbank offered rate on drawn funds, according to data compiled by Bloomberg.

Alexander Becker, a spokesman for Munich-based Siemens, declined to comment. The company said May 4 it expects profit this year to rise at least 75 percent, more than it previously anticipated, as customers buy more industrial equipment and a unit overhaul starts to pay off.

Standard & Poor’s and Fitch Ratings rank Siemens’s debt A+.

Banks have reduced the average interest they charge for loans to similarly rated companies in Europe to 37.5 basis points this year from 80 basis points more than benchmark lending rates in 2010, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.

--Editors: Cecile Gutscher, Paul Armstrong

To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net