Royal Dutch Shell Plc  .com Rotating Header Image

Royal Dutch Shell Signs New Loan Deal To Finance BG Group plc Takeover

Screen Shot 2015-05-03 at 00.02.25

By: MICHEAL KAUFMANPublished: May 2, 2015 at 10:22 am EST

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has entered an agreement for a bridge loan of $15.2 billion (10.07 billion GBP), the company said on Friday.

The new credit facility will replace a $4.6 billion (3.025 billion GBP) interim loan, which was obtained last month from Bank of America Merrill Lynch.

A total of 19 banks have committed $802 million (530 million GBP) each towards the new credit facility, including Banco Santander, Bank of America Merrill Lynch, Bank of Tokyo, Barclays Bank, BNP Paribas, Citigroup, Societe Generale, HSBC Bank, JPMorgan, and Standard Chartered.

The banks will receive an initial margin of 15 basis points (bps) over London Interbank Offered Rate (Libor), increasing to 20 bps in the fourth month. It will receive regular upward revisions till it reaches 71 bps over Libor after 21 months.

On top of that, Shell will pay 20% of the applicable margin on undrawn accounts as ticking fees to the banks.

The loan has been granted by the group of banks that are backing Shell’s planned acquisition of UK-based BG Group plc (ADR) (OTCMKTS:BRGYY).

Shell announced last month that it would acquire BG Group in a deal worth $70 billion (47 billion GBP), as it agreed to pay a 52% premium over BG stock before the announcement was made.

Shell said it would pay for the gas company using cash and stock. $20 billion (13.2 billion GBP) of the total amount will be paid in cash, and Shell’s newly-signed bridge loan deal will help cover that cash portion.

Shell’s planned takeover of BG is the biggest merger and acquisition deal in the energy sector in over a decade, and its timing has surprised investors as oil prices have significantly declined in recent months.

While there may be doubts about the Shell-BG deal, investors have little or no reason to worry about Shell’s ability to service its debt. The company is rated “Aa1” by Moody’s Investor Service, “AA-” by Standard & Poor’s, while Fitch has given it an “AA” rating.

Shell stock gained 0.2% on Friday to close at $63.5 on the NYSE.

Out of the 29 analysts who cover the stock, 12 rate it a Buy and 14 have given it a Hold rating. The average 12-month target price on the stock stands

SOURCE

RELATED

Screen Shot 2015-01-29 at 13.58.27

Business | Fri May 1, 2015 4:53pm BST

Shell signs 10 billion pound bridge loan

LONDON | BY ALASDAIR REILLY

(Reuters) – Royal Dutch Shell (RDSa.L) has agreed a 10.07 billion pound bridge loan from a group of relationship banks backing its 47 billion pound takeover of smaller rival BG Group (BG.L), the company announced on Friday.

The two-year loan replaces a 3.025 billion pound interim bridge loan that was provided in early April by Bank of America Merrill Lynch.

The bridge loan will be used, along with existing cash, to cover the 13.2 billion pound cash portion of the cash and share deal.

Mandated lead arrangers on the financing are Banco Santander, Bank of America Merrill Lynch, Bank of Tokyo-Mitsubishi UFJ, Barclays Bank, BNP Paribas, CIBC, Citigroup, Credit Agricole CIB, Credit Suisse, Deutsche Bank, HSBC Bank, JP Morgan, Lloyds Bank, Morgan Stanley, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered and SMBC.

Each bank has committed 530 million pounds to the deal.

Barclays is facility agent on the transaction.

The financing pays an initial margin of 15bp over Libor, rising to 20bp after three months, to 25bp after six months, to 30bp after nine months, to 40bp after 12 months, to 50bp after 15 months, to 60bp after 18 months and to 70bp after 21 months.

There are also ticking fees of 20 percent of the applicable margin on undrawn, uncancelled amounts.

Shell is rated AA- by Standard & Poor’s, Aa1 Moody’s and AA by Fitch.

($1 = 0.6592 pounds)

(Editing by Christopher Mangham)

SOURCE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.