October 18, 2010, 6: 37 AM EDT by Patricia Kuo

(Updates with prices of loan in paragraph 11).

October 18 (Bloomberg) – European high quality companies are getting lower loan since 2007 as banks vie for customers who can offer lucrative for the share sales, merger advisory fees costs and derivatives.Banks have reduced costs borrowing companies rating BBB – or above by poor & standard of an average of 92 basis points more than the cheaper over three years in a 4 billion euros loan.New rate obtained loans this year, compared with 142 basics, in 2009 and 52 points in 2007, according to data collected by Bloomberg.Nestle SA last week basic reference rates ($5.6 million), regulations are driving to foster relationships with high-quality, being less expensive cost of capital loan speculative grade borrowers banks. “Underwriters made 267 billion dollars of loans to companies in high quality in Europe this year compared with 81.5 million $ borrowers rated below the level of investment, according to data compiled by Bloomberg.” Is a little scary to see loan prices fall faster than thought in the beginning of the year, “said Richard Hill, head of EMEA at WestLB AG in London loan distribution.” “While no one likes particularly, clearly many banks are justifying it by the argument of the relationship.” Nestlé, the world’s largest food company is to organize a revolving credit for five years with a drawn margin of approximately 10 basis points, according to Bloomberg data. Is the lowest for European companies already that 2.25 million dollars for the manufacturer in April 2007 BASF SE chemical treatment, show.Basel data RulesBHP Billiton Ltd., the world’s largest mining company got loans $ 45 million in August to finance its offer for Potash Corporation of Saskatchewan Inc. Most of the funding, a one-year, $ 25 million loan pay an initial margin of 70 basis points. BHP loan insurers are advising BHP on the bid.The banking supervision, Basel Committee on 12 September made more expensive for banks to lend to riskier borrowers rising cost of capital which are obliged to set aside against loans. New standards are still known as Basel II, which are being taken now and require lenders to assign more capital against high-risk based in Vevey, Switzerland loans.Nestle regulations, Moody Aa1 Investors Service is classified ‘ s, the second highest ranking and a comparable AA + by Fitch Ratings.It has classified a bottom in AA by S P & .a step basis point is 0.01 percentage point.Average bids Rise “is surprising to see banks tighten their spreads of corporate loans at a time when still rose financing costs and capital needs are rising due to the new agreement Basel,” says Georg Grodzki, head of credit research on legal and general Investment Management in London to help monitor the 300 million pounds ($481 million) .in the secondary market, the average bid for leveraged loans rose to 96,70 cents for the week ending 14 October, according to European name index workflow composite monitors LCD standard & Poor, the highest since May 6. “” Cableuropa SA Spanish cable television company loans increased 101 cents on 91,5 in the week ending October 15, in accordance with Mizuho Financial Group Inc. Cableuropa issued 700 euro EUR eight years October 15 bonds yield 8.875%, according to Bloomberg data allows you to prepay junior-ranking debt. “”It is great from point of view of a borrower to power you get money cheap and cheerful, said Hill again.”For lenders, only those who receive other genuine fee business advice or M & A equity offerings can surely sense of its balance sheet loans outside at current price levels.”

-With the assistance of Isabell Witt Londres.Editores: Cecile Gutscher, Faris Khan

To contact the reporter on this story: Patricia Kuo pkuo2@bloomberg.net London

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