Chilean Utility Pays up for Loan

Chilean electric utility Endesa has called on its relationship banks for its most recent financing, a $400m 6-year bullet loan. The facility is being raised with a club of five banks and will not be syndicated, say bankers close to the process. The margin is Libor plus 75bp, considerably wider than what the company has paid on similar financings in the past two years. In April 2006, Endesa Chile Overseas raised a $200m 6-year facility at Libor plus 30bp, while a 3-year revolver raised in February 2007 pays Libor plus 25bp, according to Dealogic. Forming a club allows Endesa to rely on five banks for a presumably lower rate than it would achieve if it were to syndicate it broadly. The combination of tenor and pricing are seen as too aggressive for most participants coming in at a retail level, say bankers away from the deal. Each lead bank in the club is pitching in average tickets of $80m. Bankers close to the process say Santander, BBVA, Bank of Tokyo Mitsubishi, Caja Madrid and Banesto make up the group. CMPC, the Chilean paper and pulp company also recently formed a three-bank club for its $250m 5-year bullet at Libor plus 55bp, but later decided to open it up to more banks for a limited syndication.