Details emerge on 12.5 billion euro loan for ZF's TRW acquisition

By Claire Ruckin

LONDON (Reuters) - Details have emerged on a 12.5 billion euro (9.76 billion pounds) loan financing backing German auto supplier ZF Friedrichhafen's [ZFF.UL] acquisition of US rival TRW (TRW.N) with commitments due next week, banking sources said on Friday.

Deutsche Bank and Citigroup are syndicating the loan to around 20 banks which have been asked to commit 750 million euros each, but this could be scaled back if the deal is oversubscribed as expected.

The financing includes a 364-day bridge loan split between $3.5 billion (2.14 billion pounds) and 4.79 billion euros, initially paying 225 basis points (bp); a three-year term loan split between $1.5 billion and 1.34 billion euros, initially paying 250bp; and a five-year term loan split between $500 million and 612 million euros, initially paying 275bp, the banking sources said.

There is also a 1.5 billion euro, five-year revolving credit facility, initially paying 225bp, the bankers said.

Banks are considering the financing and have been asked to commit to the deal by September 30, the bankers said.

“This is going to be a blow out deal. A lot of banks are looking to invest in it,” one of the banking sources said.

ZF declined to comment on the financing details.

The company is looking for an investment-grade rating on the new debt.

The acquisition of Michigan-based TRW, which makes airbags and electronic sensors, will create one of the largest auto supply firms in the world with combined sales of over $40 billion.

(Editing by Christopher Mangham)