BANKERS SEE GOOD RECEPTION OF BP CREDIT FACILITY
A huge five billion dlr credit facility
being syndicated for two subsidiaries of British Petroleum Co
Plc <BP.L> should be well received in the market, given the
relatively generous terms it carries, banking sources said.
    The sources said they believe the committed four year
revolving credit - the largest of its kind in the euromarkets -
carries a facility fee of 1/8 pct and that drawings will be at
1/8 pct over the London Interbank Offered Rate (Libor).
    Morgan Guaranty Trust Co of New York, which is arranging
the financing in conjunction with its London operation, was not
available to commment on the terms.
    BP announced it was arranging the financing earlier today
as part of its planned tender offer for the 45 pct of Standard
Oil Co that it does not own already.
    In addition to the revolving credit, BP also is arranging a
U.S. commercial paper program for an as yet undetermined
amount, which will be supported by the revolver.
    Bankers noted that the terms on the new facility compare
extremely favourably to those on other short-term facilities
for which pricing has turned extremely fine due to competition
for the mandates. It also contrasts with the 1/16 pct fee BP
paid on a recent 1.5 billion dlr refinancing of some existing
debt.
    Earlier today a Morgan Guaranty official, while declining
to reveal the pricing on the facility said that banks would be
"compensated fairly" since this is a special purpose facility
which must be completed quickly, with the signing expected in
about 10 days.
    The facility is only being syndicated among BP's
relationship banks and therefore has large individual
commitments from the banks. Lead managers are being recruited
at the 200 mln dlr level, co-lead managers at 125 mln and
managers at 75 mln.
    However, bankers said that despite the size it is likely
the financing will get done quickly since banks will want to be
seen as supporting the relationship.
    The financing is being arranged in the name of BP
International and BP North America.
 Reuter
