Largest debt refinancing transaction in Poland
PKN ORLEN S.A. has executed a new credit facility agreement with a syndicate of 14 banks, which allows the Company to refinance four credit facilities on more favourable terms and secures access to bank financing for the next five years. The maximum amount of financing available to PKN ORLEN under the new credit facility is more than EUR 2.6bn, that is over PLN 10bn.
The funds secured under the facility will be allocated to repayment of the existing foreign currency debt and to financing of operations of PKN ORLEN S.A. and the ORLEN Group. The agreement with the bank syndicate also provides the Company with access to a further funding of EUR 200m.
“The agreement executed today is yet another confirmation of the deep and positive changes in the relations between PKN ORLEN and the lending institutions. At the beginning of the first term of office of the incumbent Management Board, which is currently about to end, the banks treated PKN ORLEN with reservation as we were close to defaulting on the covenants of our credit facility agreements. Today, thanks to the implementation of debt-reduction measures and optimisation processes, our debt remains stable while PKN’s ratings are improving, therefore banks are willing to negotiate further financing of our business,” said Jacek Krawiec, PKN ORLEN’s CEO.
The agreement will replace four multi-currency revolving syndicated credit facilities prior to their maturity in 2011–2012, including:
- EUR 1bn credit facility granted by a syndicate of eleven banks in December 2005,
- EUR 800m credit facility granted by a syndicate of eight banks in November 2006,
- EUR 300m credit facility granted by a syndicate of six banks in January 2008,
- EUR 325m credit facility granted by a syndicate of seven banks in August 2008.
The term of the agreement is five years and may be extended twice for one-year periods. The funds provided under the agreement are available in EUR, USD, PLN and CZK. The loan bears interest at WIBOR/EURIBOR/LIBOR/PRIBOR rates plus bank margin.
Pursuant to the agreement, the financing costs to be borne by PKN ORLEN S.A. will depend on the Company’s net debt/EBITDA ratio. Other terms of the credit facility do not differ from standard market terms, either.
The current bank syndicate comprises: The Bank of Tokyo-Mitsubishi UFJ, Ltd., Bank Polska Kasa Opieki S.A./UniCredit Bank Austria AG, Nordea Bank Polska S.A., ING Bank N.V. Dublin Branch/ING Bank Śląski S.A., BNP Paribas, BRE Bank S.A., DnB NOR Bank ASA/Bank DnB NORD POLSKA S.A., Credit Agricole Corporate and Investment Bank S.A. Polish Branch, Bank Zachodni WBK S.A., Bank Handlowy w Warszawie S.A., Erste Group Bank AG, Rabobank Polska S.A., Société Générale Corporate & Investment Banking and Skandinaviska Enskilda Banken AB (publ).
