Fiat SpA’s lenders will syndicate 4 billion euros ($5.5 billion) of loans this month as Italy’s biggest manufacturer prepares to spin off its industrial units, according to two people with knowledge of the situation.
Fiat is in talks for a 2.4 billion-euro bridge loan which will be refinanced with a bond from the unit being separated, said the people, who declined to be named because talks are private. The loan will have a term of one year which can be extended by another year.
The Turin-based automaker is also arranging a 1.6 billion- euro revolving credit line, the people said. Loan underwriters typically seek to reduce the amount they provide by selling, or syndicating, the debt to a wider group of lenders.
A Fiat spokesman declined to comment on the deal.
Barclays Capital Plc, BNP Paribas SA, Credit Agricole CIB, Intesa Sanpaolo SpA, Societe Generale SA, Royal Bank of Scotland Group Plc, Citigroup Inc. and UniCredit SpA are providing the debt, Fiat said on July 21. Money in a revolving credit can be borrowed again once it’s been repaid; in a term loan it can’t.
Fiat, which owns 20 percent of Chrysler Group LLC, is spinning off industrial units to focus on reviving carmaking operations. The company raised 2010 forecasts on Oct. 21 after quarterly profit beat analysts’ estimates on sales of Iveco trucks and Case New Holland tractors.
Fiat Industrial SpA, the new company that will combine businesses including Iveco and CNH Global NV, will be listed on the Milan exchange Jan. 3.
