Macquarie Consortium Eyes Bond Market For Gas Grid Buy- Source
May 15 2012 - 12:02PM
Dow Jones News
The Macquarie-led consortium in the process of buying German
utility E.On AG's (EOAN.XE) Open Grid Europe will likely refinance
a substantial amount of the debt backing the EUR3.2 billion deal in
the bond market, said one person familiar with the situation
Tuesday.
The financing is likely to be around 70% of the purchase price
for the natural gas transmission network and amount to about
EUR2.25 billion, two people familiar with the matter said. The debt
is primarily divided between five-year loans and shorter-dated
financing, one of these people said. The shorter dated debt, about
EUR1 billion, will likely be refinanced in the bond market over the
next 12 months, this person added.
The debt is being provided by a group of 10 banks including BNP
Paribas, Credit Agricole, Commerzbank, Export Development Bank of
Canada, ING, Royal Bank of Canada, Societe Generale, Scotiabank and
Unicredit, this person said.
As previously reported by Dow Jones, the deal has yet to be
signed but is agreed in principle and could be announced Wednesday
when E.ON's supervisory board is scheduled to approve the deal.
The Open Grid Europe network of pipelines stretches over around
12,000 kilometers across much of Germany, with a geographic focus
on the former West Germany. Its compressor station Waidhaus on the
German-Czech border is one of Europe's largest entry-hubs for
Russian gas, which accounts for around a quarter of Europe's gas
supply.
The acquisition of Germany's largest gas-transmission
grid--which commanded strong interest because its mid-Europe
location means it is key to shipping large volumes of Russian gas
from the continent's east to west--would be the second gas-network
purchase by the Australian bank in just over a year, following its
purchase of a smaller grid from RWE AG (RWE.XE) for around EUR500
million.
The Macquarie Group Ltd (MQG.AU) consortium also includes Abu
Dhabi Investment Authority and Munich Re.
By Carol Dean and Eyk Henning, Dow Jones Newswires; 44 20 7842
9306 carol.dean@dowjones.com
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