Published November 15, 2008

SingTel clinches $1.07b loans

By WINSTON CHAI
Email this article
Print article
Feedback

SINGAPORE Telecommunications (SingTel) has secured loans amounting to about $1.075 billion to refinance debt and for general working capital.

TWO FINANCING AGREEMENTS
SingTel has secured a $350 million credit facility that will mature in November 2013. Its Australian unit Optus has separately penned a 3.5-year, A$725 million (S$721 million) syndicated loan with five banks

The company yesterday announced it has entered into two agreements with lenders in Singapore and Australia.

The first is a $350 million credit facility with the Bank of Tokyo-Mitsubishi UFJ, DBS Bank and Oversea-Chinese Banking Corporation, that will mature in November 2013.

Its Australian unit Optus has separately put pen to paper on a 3.5-year, A$725 million (S$721 million) syndicated loan with a group of five banks.

The lenders involved in this deal - which matures in April 2012 - are Australia & New Zealand Banking Group, Bank of Tokyo-Mitsubishi UFJ, Citibank, Commonwealth Bank of Australia and Westpac Banking Corp, according to a SingTel statement.

Related article:

Click here for SingTel's news release

SingTel is seeking financing at a time when credit lines have been tightened, following the meltdown in the global financial system.

However, industry watchers believe companies with good credit ratings will still get access to loans despite the current crisis.

SingTel and Optus have an A+ rating from Standard and Poor's. Moody's Investors Service have given Singapore's largest operator a rating of Aa2, the third-highest grade on a scale of 10, while Optus is rated Aa3.

'I think the recent drop in SOR (swap offer rate) is probably a good indication that the situation in the interbank market has improved. However, credit spreads for most companies continue to remain high,' said OCBC analyst Carey Wong.

The SOR is made up of the bank's prevailing lending costs and the Singapore interbank offered rate or Sibor.

SingTel did not reveal details of the two loans but said they will not have a 'material impact on the earnings per share or the net tangible assets' for its current financial year.

The company's free cash flow after capital expenditure stood at $1.7 billion at the end of September. Net debt was $7.1 billion, translating into a net debt gearing ratio of 25.8 per cent.

SingTel shares closed 0.8 per cent lower at $2.40 yesterday.