Bloomberg News

HeidelbergCement Extends $4 Billion Credit Facility

February 02, 2012

(Corrects loan margin in second paragraph of story published Feb. 1.)

Feb. 1 (Bloomberg) -- HeidelbergCement AG, the world’s third-largest cement maker, said it extended the maturity of its 3 billion-euro ($3.9 billion) revolving credit facility by two years in exchange for a higher interest margin and one-time fees.

The loan, which is now due in December 2015, will pay an extra 25 basis points of interest, making the margin 200 basis points more than the euro interbank offered rate, according to a statement from the Heidelberg-based company. All 17 existing lenders approved the extension, and were joined by two further banks, said the company. Royal Bank of Scotland Plc acts as agent for the loan that was signed in April 2010, according to Bloomberg data.

HeidelbergCement also agreed to pay 15 basis points to draw on the facility, a 50 basis-point premium for borrowing in U.S. dollars, as well as a one-time 45 basis point fee to lenders, according to the statement. A basis point is 0.01 percentage point.

The company lost its investment-grade rating in October 2008 because of a slowdown in the construction market. It has since been upgraded by Standard & Poor’s three times in the past three years and currently has a BB ranking, two steps below investment grade, as well as a Ba1 grade from Moody’s Investors Service.

“We were able to limit the margin increase to only 25 basis points in an overall difficult financing market environment,” Chief Executive Officer Bernd Scheifele said in the statement. This “underlines the trust of the institutions in our company. With the extension of the credit facility, we secure sufficient liquidity back-up for our company until the end of 2015.”

Investment-grade companies typically maintain credit lines to fund day-to-day operations or to back sales of other types of debt such as short-term commercial paper. They don’t usually draw on the loans. Money in a revolving credit can be borrowed again once it’s repaid.

--Editors: Faris Khan, Paul Armstrong

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net

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


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