BEST INTERNATIONAL SYNDICATED LOAN: Size matters for GEC
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BANKING

BEST INTERNATIONAL SYNDICATED LOAN: Size matters for GEC

Deals of the Year


Issuer: General Electric Company (GEC)
Date: March 1998
Amount: €6 billion ($7 billion)
Bookrunners: Barclays, Warburg Dillon Read


If GEC’s €6 billion ($7 billion) syndicated loan in March was designed to catch the headlines it certainly succeeded. Not only was this the biggest ever loan for a corporate denominated in euros or Ecus, it was also the biggest ever syndicated loan in the single European currency.

The British defence contractor signed a revolving credit facility consisting of a five-year tranche for €4.5 billion and a one-year tranche for €1.5 billion, both priced at 17.5 basis points. A total of 28 banks formed the syndicate, with Barclays and Warburg Dillon Read acting as joint bookrunners.

What did the company want the facility for? GEC stated only that the proceeds would be used for general corporate purposes. But the suspicion was that the company was planning a big acquisition—something that might have pushed up the cost of its borrowing.

One banker involved in the deal believes that it should not be seen as unusual for a big company to have a hefty loan facility in place.


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