Porsche takes $46.67 billion loan for Volkswagen bid

Porsche takes $46.67 billion loan for Volkswagen bid

Automotive News / March 29, 2007 - 11:00 am

LONDON (Reuters) -- Porsche is raising a $46.67 billion (35 billion euros) syndicated loan to finance its takeover bid for Volkswagen, according to the arranging banks.

Porsche has appointed ABN AMRO, Barclays Capital, Merrill Lynch, UBS and Commerzbank as mandated lead arrangers on the credit.

Porsche's takeover bid was triggered after it increased its shareholding in Volkswagen ordinary shares to 30.94 percent -- over the 30 percent threshold that prompts a full takeover bid under German law.

The jumbo loan will finance Porsche's mandatory public tender offer for the remaining outstanding ordinary and preferred shares, the banks said.

Porsche's loan has four tranches -- a 364-day line, a 364-day line with a term-out option, a three-year tranche and a three-year tranche with a two-year term out option.

The loan will be refinanced through a variety of sources including but not limited to capital-markets issues. A wider syndication will be launched in April.

In the context of the wider bid, Porsche has to submit documentation to the German regulator within four weeks from the start of this week, banking sources said, which has to be reviewed and approved by the regulator before the offer is posted.