Cash will be used to refinance debts due in early 2013
Bahrain’s Investcorp is planning to complete a $500m loan deal by the end of June. The deal will be used to refinance debts maturing in early 2013 and is structured as a forward start facility, where the loan is arranged well advance of when it is drawn down.
The deal is being led by the UK’s Barclays and Royal Bank of Scotland, Germany’s Deutsche Bank, and the US’ Citigroup. It is split into three tranches of 18 months, two and half years, and three and a half years.
Borrowers typically use forward start facilities as a way of hedging against refinancing risk when they think that the financial markets, or their ability to raise money, will deteriorate in the future.
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