Iberdrola deal pricing and structure of its EURO1.5 billion syndicated funding has been announced, via mandated lead arrangers ABN AMRO Bank (joint books), Banesto, BBVA (joint books), Credit Agricole Indosuez (documentation agent), Dresdner Kleinwort Wasserstein and JP Morgan (joint books).

The loan is equally split between a three-year revolving portion and a five-year term loan. Pricing is thought to be in line with other deals in the European power sector. For example, E.ON has just launched syndication of a EURO15 billion facility paying margins of 20bp and 25bp over Euribor for 364-day and five-year money, respectively.

The facility comprises a EURO750 million five-year term loan at 37.5bp over Euribor and a EURO750 million three-year revolving credit at 30bp over Euribor with a commitment fee of 40 per cent of the margin. Three ticket levels of EURO85 million, EURO50 million and EURO25 million are offered to the market.

Proceeds will be used to help Iberdrola pursue its strategic plan of focusing on power generation, in the light of planned liberalisation of Spain’s energy sector. CVC had originally agreed to pay EURO577 million, but the government threatened to block the transaction seeing a clear preference for local carrier Red Electrica de Espana (REE), of which it controls 30 per cent.

Iberdrola has since amended the agreement increasing the price tag to EURO617 million to incorporate the company’s fibre optic network, which was excluded from the original deal. REE will now commit EURO10 million to the transaction, acquiring a 25 per cent stake in Infraestructuras de Alta Tensin, the company created by CVC to complete the acquisition of Iberdrola.