Tenaris Loan To Get Flexed Down

A $1.5 billion acquisition loan for Tenaris to acquire US tube maker Hydril is set to be flexed down thanks to strong investor interest. According to the deal terms, if oversubscribed by 25%-50%, pricing falls 2.5 basis points, for 50%-75% oversubscription, it drops 5 basis points, and 75%-100% excess demand results in a 7.5 basis point reduction, according to a banker not on the deal. A doubling of the book or more will result in a 10 basis points drop. Demand is heard already exceeding the first bracket. The deal has three tranches: a $1 billion 2-year at 40 basis points over Libor for Tenaris, a $200 million 5-year at 50 basis points over Libor; and a $300 million Hydril loan, also at 50 basis points. Citi is the lead arranger.