PSA near $7 billion loan deal for car-lending arm, sources say
LONDON (Bloomberg) -- PSA/Peugeot Citroen will sign about 5.3 billion euros ($7 billion) in loans for its struggling Banque PSA Finance unit in the next week after lenders offered more than originally sought, according to two people with knowledge of the matter.
As part of the plan to shore up the banking unit, PSA also received 7 billion euros in guarantees from the French government to issue new bonds, allowing it to raise money at lower interest rates.
The carmaker still needs European Commission approval for the guarantees.
The refinancing, part of a 11.5 billion-euro deal to shore up the car-loan division's finances, comprises a 4.1 billion-euro five-year term loan and a 1.2 billion-euro three-year forward-start facility, said the people, who asked not to be identified because the transaction hasn't been announced.
PSA spokesman Jean-Baptiste Mounier declined to comment on the financing.
The term loan was increased from 3.6 billion euros for 5.3 billion euros after attracting demand from lenders led by BNP Paribas, Credit Agricole, Natixis and Societe Generale, said the people.
The remainder of the debt comprises loans agreed individually with banks, one of the people said.
The Paris-based company is taking steps to sustain Banque PSA Finance as Moody's Investors Service is considering whether to cut the unit's credit rating to junk because of slumping car sales.
PSA Chief Financial Officer Jean-Baptiste de Chatillon said Dec. 20 the company had reached an agreement with about 20 banks for the financing.Contact Automotive News