SingTel – BT

SingTel signs deal for $1.08b credit facility

SINGAPORE Telecommunications (SingTel) has secured credit facilities of $1.08 billion to refinance existing facilities and for general working capital.

The agreement for the three-year term loan facility was signed through wholly owned subsidiary SingTel Group Treasury with the Bank of Tokyo-Mitsubishi UFJ, DBS Bank, OCBC, UOB, Calyon, Citibank, and the Hongkong and Shanghai Banking Corporation.

‘The committed facility of $1.08 billion will meet the group’s refinancing requirements for the next financial year ending March 31, 2010,’ said Jeann Low, SingTel’s group chief financial officer.

SingTel generated $2.3 billion in free cash flow after capital expenses for the nine months ended Dec 31, 2008. Net debt as at end- 2008 was $6.6 billion, translating to a net debt gearing ratio of 25.5 per cent.

The ability of Singapore’s largest telco to secure fresh credit to refinance existing facilities at a time when banks around the world are tightening their purse strings is a feat which market analysts attribute to its sound credit rating.

SingTel has an A+ rating from Standard and Poor’s and an Aa2 rating – the third-highest on a scale of 10 – from Moody’s Investors Service.

Its new loan facility comes on top of a separate tranche of $1.07 billion worth of credit facilities obtained last November, also for refinancing existing facilities and for general working capital. These include a $350 million five-year facility with the Bank of Tokyo-Mitsubishi UFJ, DBS Bank and OCBC. The other is a 3.5-year A$725 million (S$763 million) syndicated revolving credit facility signed by its Australian subsidiary Optus with a group of five banks.

While other blue chips such as DBS Group and CapitaLand have resorted to cash calls to raise funds, SingTel has stated it will call for a rights issue only as a last resort.

‘While the credit markets are available, we will continue to get money from credit markets,’ SingTel Singapore CEO Allen Lew told BT previously.

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