British American Tobacco signs £6 billion SONIA and SOFR linked revolving credit facility
12 March 2020
British American Tobacco p.l.c. (BAT) is pleased to announce that it has signed a new £6 billion multi-currency revolving credit facility. The new facility replaces BAT’s existing £6 billion revolving credit facility and is provided by a syndicate of 21 banks.
In anticipation of the cessation of the London Interbank Offered Rate (LIBOR), this is the first widely syndicated credit facility executed globally to be linked to both the Sterling Overnight Index Average (SONIA) and the Secured Overnight Financing Rate (SOFR).
Neil Wadey, Group Head of Treasury at BAT, said: “I am delighted that BAT has been able to lead the transition to a post LIBOR environment with this broadly syndicated £6 billion facility. Supported by our bank group, this transaction has helped build new conventions for both SONIA and SOFR benchmarks, bringing clarity and certainty to our relationship with the loan market.”
The new facility consists of a £3 billion 364-day facility and a £3 billion five-year facility, and is principally used for backstop liquidity purposes.
Barclays Bank and HSBC acted as joint co-ordinators for the facility. Herbert Smith Freehills acted as legal counsel for BAT and Allen & Overy acted as legal counsel for the banks.