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Babcock & Brown units extend $3.2bn credit, shares soarBrought to you by
Font Size: Decrease Increase Print Page: Print Bill Lindsay | June 04, 2008
SHARES in two Babcock & Brown units have soared on news that their credit facilities have been extended.

Babcock & Brown Power today said it had refinanced a $2.7 billion debt facility with a syndicate of 12 banks.

At the same time, Babcock & Brown Infrastructure (ASX: BBI: quote) also announced today that it had agreed to lenders’ terms for refinancing a $518 million debt facility.

News that credit reins were loosening somewhat was welcomed by the market - BBP shares this afternoon rose 7.06 per cent to $1.36, while shares of BBI gained 7.84 per cent to $1.10. At the same time, the benchmark S&P/ASX 200 Index rose 0.24 per cent.

Babcock & Brown Power said it also expected to refinance a further $360 million corporate debt facility by August 31.

BBP (ASX: BBP: quote) has appointed UBS to advise on the sale of assets not secured under the $2.7 billion facility.

The BBP facility will help fund previously disclosed capital expenditure requirements, but the firm said no final decisions have yet been reached.

BBP, which holds stakes in 14 operating power stations in Australia and New Zealand, said it expects its interest rate on the two debt facilities to be around 8.5 per cent.

The renewed facility at Babcock & Brown Infrastructure, due to mature in August, will be used to acquire a range of Australian energy transmission and distribution assets.

The BBI facility, with a weighted average term of three years, will be provided by seven banks and result in a "modest increase" to BBI's existing corporate debt facility when finalised by the end of this month.

BBI said it has no material single refinancing requirement until fiscal 2010.

the market is not trading on fundamentals, buy while you can as the shorters are now in control.