Qatar Tel set to increase $1.5 bn loan-bankers

Qatar Telecommunications Co (Qtel) is launching syndication of its $1.5 billion loan in order to increase the facility amount, banking sources close to the deal said.

Existing lenders to the company, plus a small number of other banks, are being invited to commit either $50 million or $25 million to the deal, the sources said. One of them added that upfront fees of 110 basis points (bps) and 90 bps are on offer, respectively.

Qtel announced in March it had signed the forward start agreement on a revolving credit facility maturing in November, extending the credit by two years.

Bankers said at the time the borrower would like $2 bn and general syndication would be used to raise the remaining amount.

Under a forward start agreement lenders typically agree to extend existing loans at final maturity in return for a hefty increase in pricing on the existing credit.

The launch follows the borrower's successful $1.5bn debut bond sale in June, which was more than eight times oversubscribed.

"The success of the bond issue bodes well for the loan syndication," a banker close to the deal said.

On the loan, initial mandated lead arrangers and bookrunners are Bank of Tokyo-Misubishi UFJ, Barclays Capital, BNP Paribas, DBS and Royal Bank of Scotland, while Qatar National Bank is acting as initial mandated lead arranger and financial adviser.

Banking sources close to the deal said in March each of the banks committed $200 million for a fee of 200 basis points (bps), adding the loan carries a margin of 250 bps over LIBOR.

International Bank of Qatar, JP Morgan Chase, Arab Bank, Doha Bank and Housing Bank for Trade and Finance also joined the deal with smaller tickets to take the total to $1.5 bn, the sources said.

The original three-year $2 bn revolving credit facility was arranged by mandated lead arrangers and bookrunners Barclays and Royal Bank of Scotland in November 2006 and paid a margin of 22.5 bps over LIBOR.