Vivendi denied €1 billion credit line - report
Activision parent's re-financing strategy fails due to Euro debt crisis
Activision-Blizzard's parent company Vivendi SA has failed to obtain a new credit line worth €1 billion, Bloomberg reports.
According to three sources with knowledge of the negotiations, mounting pressures from the European debt crisis prompted lenders to refuse the conglomerate's terms.
Vivendi was asked to pay an interest rate of 90 basis points above the Euro interbank offered rate, but held firm with its offer of 75 basis points.
Bloomberg has compiled data to suggest that the average interest rate for French investment-grade companies increased from 48.8 basis points to 60 in the first eight months of 2011.
Vivendi is said to be seeking a better line of credit following its agreement to pay £1.2 billion for the recorded assets of the EMI Group last month. Following the announcement, the credit rating agency Standard & Poor's suggested that Vivendi's credit profile would diminish next year before improving in 2013.
In November, Vivendi sold 35 million shares in Activision-Blizzard for a reported $425 million. The conglomerate called the decision a "tactical disposal with regards to our overall capital structure," but claims that it is committed to remaining the majority shareholder.