Largest Eurocredit loan for New Zealand company

Press, 29 March 1980, Page 20

Largest Eurocredit loan for New Zealand company

PA . Wellingtor A SSOOM Eurocredit loar facility, to finance the ex pansion of the New Zealanc Refining Company. Ltd, he finery at Marsden Point hat been announced in London. Wellington sources saic that the loan is the largest ever raised by a New Zealand company in foreign money markets. The credit will be used tc finance a hydrocracker — an expensive converter that will enlarge the range of fuels produced at the refinery. When the hydrocracker begins production in about April, 1984, its is expected to save New Zealand about SISOM a year, in 1979 terms, because the nation will then not have to import large quantities of diesel, or jet fuels. The expansion will allow cheaper grades of crude oil to be processed, easing New Zealand’s reliance .on light Arabian crude from unstable Middle East markets. The hydrocracker expan-

sion will also allow the Government to opt for a petrol-methanol blend in later years. It's understood that New Zealand Refining’s big Joan is not directly guaranteed by the Government, N.Z.P.A. was told that the loan documents set out an understanding between the borrowers, the lenders, and the New Zealand Government which give the foreign banks involved in the package sufficient “comfort.” The source described the loan as "enormous” in terms of borrowing overseas by New Zealand companies. Only a handful of companies have borrowed more than S2SM overseas in the past. The Eurocredit will carry an 11 year maturity, with an optional one year extension, Morgan Guaranty Trust Co, of New York said as one of the group of banks arranging the loan. Terms include interest at I per cent over London interbank offered rates (libor) for

; the first three years. 5/8 pei i[cent for years four to eight r inclusive, and ( per cent f.oi the remainder, with 51 .■ months grace. s The loan may be extendec ,■• the one year if completion .'of the project is delayed. - ■ The loan is being co--[ordinated by the Bank of ,[New Zealand, Lloyds Bank r; International. Ltd, Morgan i Guaranty Trust, and the -'National Bank of New j [Zealand. I New Zealand Refining is <69 per cent owned by New ; | Zealand subsidiaries of 8.P., -iCaltex. Mobil, and Shell [and 31 per cent by the ■ jgeneral public.