NIB issues first A/B loan

An A/B loan structured under the NIB umbrella has secured the borrower, Brazil’s leading telecom operator Oi, USD 250 million to setting up cutting-edge mobile networks.

According to its vision, South America’s largest telecommunications network operator, Brazilian Oi (Telemar Norte Leste S.A.) is aiming to be “the best service provider company, connecting people and creating value for our clients, employees, the society and shareholders.”

NIB’s A/B loan totalling USD 250 million serves as solid and long-lasting support for the company in this endeavour.

Oi on the cutting edge
The loan is financing the expansion of the company’s 2G and 3G mobile networks in the densely populated São Paulo region. Oi has concluded contracts with Nokia Siemens Networks for the supply of telecom infrastructure equipment.

The Oi Group is Brazil’s largest provider of fixed-line telecommunication services with more than 14 million subscribers (June 2008). The company also has 20 million mobile telecom subscribers and 1.8 million data services customers.

“In order to retain our market leadership, Oi supplies cutting-edge telecommunications, by constantly investing in the development of new technologies and services. Borrowing from NIB gives us an opportunity to raise long-tenor credit financing from a top-rated international financial institution,” says José Luis Salazar, CFO and Investor Relations Officer of Oi.

NIB-umbrella benefits
A longer tenor, an AAA rating and more money, substantially more than a regular loan would make up-so much can an A/B loan under the NIB umbrella offer the customer. The A loan to Oi amounts to USD 100 million with a 10-year tenor.

The B loan totals USD 150 million and has been provided with a 7-year maturity. The B loan has been fully underwritten by BNP Paribas and Banco Bilbao Vizcaya Argentaria.

“Providing the first A/B loan is an important step for NIB. We hope that this new product will further strengthen NIB’s positions in financing large-scale investment deals on the world’s growth markets, such as Brazil,” says Johnny Åkerholm, President and CEO of NIB.

While the customer receives a bigger financing package, the B lenders also benefit from this structure by sharing the advantages of NIB’s status as an international financial institution.

“The commercial banks participating in the B loan are willing to extend their normal maturities because they share in the benefits of NIB’s international financial institution status. From NIB’s perspective, the A/B loan enables us to provide higher-value financing to fulfil the Bank’s mandate more effectively,” explains Joe Wright, Head of Project and Structured Finance at NIB.