Bloomberg News

Vivendi Lenders Said to Demand Interest Increase on Credit Line

December 12, 2011

Dec. 9 (Bloomberg) -- Vivendi SA, owner of the world’s largest video-game maker, is being asked by lenders to increase the interest margin of a new credit line, according to three people with knowledge of the deal.

Banks are demanding the Paris-based company pay interest of 90 basis points on money it borrows under the five-year 1 billion-euro ($1.3 billion) facility, said the people, who didn’t want to be identified because talks are private. It offered a margin of 75 basis points.

French companies are rushing to refinance as Europe’s spreading sovereign crisis endangers France’s top credit rating. Deals from Carrefour SA and Alstom SA last month pushed the amount of French loans to $92 billion this year, compared with $49 billion a year earlier, according to data compiled by Bloomberg.

The average premium to benchmark rates paid by high-grade issuers in Europe is 91.6 basis points, up from 84.4 basis points between January and July, the data show.

Banks also asked for higher fees to give Vivendi access to the funds. The company had offered to pay a 15 basis-point fee to start drawing funds under the facility, 20 basis points to use more than one-third, and 30 basis points to use more than two-thirds, the people said. Banks are demanding 30 basis points to lend one-third and 50 basis points for two-thirds.

Jean-Louis Erneux, a spokesman for Vivendi, declined to comment.

Vivendi is seeking the financing for its business and to refinance credit facilities, said the people. A 1 billion-euro five-year loan signed last year pays an initial interest margin of 55 basis points, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.

Banco Santander SA, Bank of Tokyo-Mitsubishi UFJ Ltd, Barclays Capital, BNP Paribas SA, Citigroup Inc., Credit Agricole CIB, Credit Mutuel-CIC, Deutsche Bank AG, Goldman Sachs Group Inc., HSBC Holdings Plc, Natixis, Nomura Holdings Inc., Royal Bank of Scotland Group Plc and Societe Generale SA are among lenders in last year’s deal, according to Bloomberg data.

Standard & Poor’s and Fitch Ratings rank Vivendi at BBB. Moody’s Investors Service rates it at Baa2.

--Editors: Cecile Gutscher, Faris Khan

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


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