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Qtel plans to refinance $2bn loan

High costs of forward start loan lead Qtel to renegotiate deal, according to report.

Qtel is seeking to refinance a forward start loan signed last year.
Qtel is seeking to refinance a forward start loan signed last year.

Qatar's incumbent telco Qtel is seeking to refinance a $2 billion forward-start loan that it agreed with banks last year, according to a report from Reuters.

Banking sources close to the deal said that Qtel was keen to refinance the deal in a bid to reduce its borrowing costs, according to the report.

Qtel signed the $2 billion loan in September 2009 with a margin of 250 basis points over Libor. Reuters reported at the time that this compared with a margin of just 22.5 bps over Libor for the original three-year, $2 billion revolving credit facility that was arranged and mandated by Barclays and Royal Bank of Scotland in November 2006.

Forward start loans offer companies a quick means of securing cash by extending maturing loans, but the costs are often far higher than conventional means of credit.