Banks are close to finalising South African telecom group MTN's 4.5 billion syndicated loan backing its proposed merger with Indian mobile phone company Bharti Airtel, bankers close to the deal said on Friday.
MTN is talking to international banks about the loan which is expected to be split between a $2.5 billion bank tranche provided by international banks and a $2 billion equivalent Rand-denominated tranche from South African banks, one of the bankers said.
The international facility will comprise a term loan and a revolving credit and part will be a bridge loan that will be refinanced by a bond issue, the banker added.
The loan is likely to carry a margin over 300 basis points over LIBOR, he said, adding that around $1 billion of the total will refinance existing debt.
MTN could not immediately be reached for comment.
MTN and Bharti this week extended the deadline to complete their complex $23 billion cash and share swap aimed at creating the world's number 3 mobile firm again until September 30.
Bharti (BRTI.BO) is also talking to banks about a $4-6 billion loan to back the deal, bankers told RLPC earlier this week.
Standard Chartered Bank is advising Bharti on the planned acquisition. Bank of America Merrill Lynch and Deutsche Bank are advising MTN.
(Reporting by Alasdair Reilly and Christopher Mangham; Editing by David Holmes)