Hungarian oil and gas group MOL has signed a USD 1,550 million revolving credit facility agreement with a group of fifteen banks on 30 October 2014, the company announced on Friday. The new facility refinances the EUR 500 million revolving credit facility which expired in September 2014 as well as the USD 545 million revolving credit facility concluded in April 2013. The Agreement is coordinated by Crédit Agricole Corporate and Investment Bank and ING Bank NV; Bank o f America Merrill Lynch is the facility agent.
MOL achieved through the deal “highly competitive conditions" with margin of 115 basis points. The facility is arranged as a club-deal type, with a group of main relationship banks of MOL Group.
The tenor of the Agreement is 5 years with 1+1 year extension options. The facility has a multi- currency feature thus can be drawn both in US Dollars and Euros.
“The new facility further enhances the financial profile and the liquidity position of MOL Group and contributes to preserve its existing commercial banking partnerships while introducing new lenders as well," MOL said in a statement on the website of the Budapest Stock Exchange (BSE).
“I am proud that MOL Group again proved to be among the top borrowers in the region. Originally our intention was to refinance the expiring EUR 500 million revolving credit facility," commented József Simola, MOL Group CFO.
“Due to the great market response we contracted a significantly higher amount at a substantially lower price level. The deal shows that the market has confidence in MOL Group and has appetite for its healthy risk profile," he added.
The announcement is no surprise since it was reported already in mid-October that MOL was in talks with several financial institutions on a new credit facility. At that time the reports were about a USD 1 bn facility, but the actual deal is a lot bigger and it boosts total liquidity of the group by some EUR 300 m (to around EUR 4 bn). This lends MOL great flexibility to carry out further acquisitions. According to the latest reports, the newest target could be German RWE’s oil and gas unit DEA. Considering the size of the potential target, this would still be a huge undertaking for MOL should it decide to buy it alone, without teaming up with another company.
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