Co-arrangers, Citibank and Sumitomo Bank , closed syndication on Wednesday, but no details as to a final list of participants or the pricing of the deal, are available yet. Citibank was the bookrunner. Moody's expect that the rating will be the first of many in the Japanese syndicated loan market. This is because smaller local banks are willing to take all the risk. They don't have the name but they have the money.
Local banks are high in deposits, but have no customers to lend to.
Fees usually range between 50bp to 100bp, according to Katsumata. The syndicated facility for Komatsu will replace existing committed bank facilities of Komatsu and its US subsidiaries. Moody's says the rating reflects Komatsu's prominent industry position in Japan's construction equipment market and its dominance in main products and competitive technologies. Komatsu's operating margins are lower than its competitors, partly because of its larger presence in lower-margin markets, according to Moody's. However, the ratings agency does warn that ongoing and potential earnings pressures, sustained improvement in its cash flow generation, and a further reduction of its total debt, will be necessary to stabilize the rating position.