BNP Paribas' has garnered $1.85 billion for insurance giant Zurich Capital Markets' ZCM Matched Funding Corp. but is still hoping to bring in a few more banks to round the facility up to $2 billion. Paul Dart, managing director in global treasury corporate finance, said ZCM is the funding vehicle for Zurich Capital Markets and is used to support a $2.5 billion commercial paper program. The last facility was $1.25 billion, but more was required so the flexibility is there to expand the program.
The deal has been closed, but an accordion feature in the facility means more banks can still come in to expand the backstop to around $2 billion. Dart expects a couple more banks to join, while one banker said some European banks are still completing diligence procedures. "Syndication has been successful considering the old facility was $1.25 billion," Dart added. The banker said the deal was pretty aggressive with the commercial paper backstop being expanded to $2 billion from $1.25 billion. Most of the existing banks rolled into the deal, but some were reluctant, as the expansion meant a wider bank group and so less room for ancillary business. Moody's Investors Service downgraded the vehicle to AA2 stable, based on the effects of 9/11, said Dart. This had no effect on pricing, he added and syndication has been deemed successful. "The bank market is not as aggressive as it was with the backstops," he noted, but this [the facility] demonstrated success in tapping relationships.
Lloyds and Deutsche Bank are said to have committed $200 million (LMW, 11/26). Three basis points were on offer for the $200 million slots, two basis points for $100 million and one basis point for $50 million. Pricing on the investment-grade credit is similar to the last years deal at LIBOR plus 22.5 basis points.