The loan is handled by DBS and Standard Chartered, which plan to limit the number of lenders that can join. They are opting to close the deal as a club, rather than having a large syndication, said a banker.
Lenders have until June 28 to make their pledges, added the banker. But the leads were unwilling to disclose the margin or the participation fees.
The bookrunners are targeting banks in Asia Pacific, but are unlikely to get any commitments from Korean lenders. This is because banks in the country traditionally do not lend to high grade Korean names, said the banker.
Knoc will use the loan proceeds to refinance some of its existing debt. Its $630m 2018 bond from early May was priced at 145bp over Treasuries, to yield 2.202% and give a coupon of 2.125%.
The South Korean oil and gas company last tapped the loan market in February 2011 for a $470m three year loan, provided by Australia and New Zealand Bank, BNP Paribas, Crédit Agricole, DBS, Standard Chartered and Sumitomo Mitsui Financial Group.
The company’s $500m loan from 2010 matures in July this year.