CyberWorks Agrees Pricing on Asia's Biggest Loan, People Say
Bloomberg News
Mar 6 2000 5:31AM ET
CyberWorks Agrees Pricing on Asia's Biggest Loan, People Say
Hong Kong, March 6 (Bloomberg) -- Pacific Century CyberWorks Ltd., which is seeking Asia's biggest loan to fund its $38.1 billion takeover of Cable & Wireless HKT Ltd., has agreed pricing with banks, people familiar with the situation said.
The group will pay at least 115 basis points above Libor for the $12 billion loan, the people said. Cyberworks officials declined comment.
The ``margin' over the London interbank offer rate is nearly twice what Vodafone AirTouch Plc paid for the debt portion of its friendly acquisition of then AirTouch Communications Inc., though less than the margin paid by Olivetti SpA for its hostile bid for Telcom Italia SpA.
Barclays Plc, Bank of China, HSBC Holdings Plc and Banque Nationale de Paris SA are arranging the loan, which is the biggest ever in Asia. Officials at the banks declined to comment on the pricing, though they said they plan to ask other lenders to help underwrite the 364-day facility soon.
CyberWorks, a 10-month-old company run by the son of Hong Kong tycoon Li Ka-shing, Richard Li, is borrowing the money after HKT's main shareholder, Cable & Wireless Plc, agreed to accept its bid for Hong Kong's dominant phone company. CyberWorks gave investors a choice between a cash-and-stock offer and an all-stock offer.
At current Libor rates, the loan's pricing translates into an interest rate of about 7.27 percent, or about 173 basis points more than U.S. Treasuries of a similar maturity. That means banks would get to share at least $872 million in interest for the facility, not including fees.
Telecom Financing
The loan is the latest in a string of such facilities used in telecommunications mergers and acquisitions. Vodafone paid between 60 basis points and 70 basis points more than Libor for the 364- day part of its $10.5 loan to help pay for its acquisition of AirTouch last year.
Olivetti paid 225 basis points for the loan portion of its $33 billion hostile acquisition of Telecom Italia in April.
The $12 billion ``is available to meet the cash portion of the offer and as additional general working capital,' the banks said in a statement on Friday.
It is the biggest ever loan in Asia, said Ian Adams, chairman of the Asia Pacific Loan Market Association. It's more than twice the size of the previous record, a $5 billion loan by Japan Tobacco Inc. to partly finance its acquisition of the non-U.S. tobacco business of RJR Nabisco Inc. in April last year. |
