The bid from Australian resources giant BHP Billiton bid for Potash Corp of Canada is being supported by major world banks. Out of BHP Billiton's US $45 billion syndicated note facilities for the Potash bid, 16% have been picked up by major Australian banks.
This loan facility is the largest one that has been arranged since the start of the global financial crisis. However the bid made for Potash Corp of Saskatchewan was oversubscribed. A good indicator of the trust of investors in the health of BHP Billiton's balance sheet.
Over the weekend the lead managers of the loan namely Santander, Barclays, BNP Paribas, JPMorgan and RBS confirmed that the loan facility had been divided evenly between 25 global banks. All of which have had previous business dealings with BHP Billiton. Each of these banks has agreed to a US $1.8 billion of potential funding. These banks include Commonwealth, ANZ, NAB and Westpac, the four major banks in Australia.
A potential competitor to the BHP bid is the Chinese Sinochem Group which is asking for government assistance in its bid for the Potash Group which could rival the hostile takeover bid placed by BHP Billiton. BHP has agreed to pay fees on the loan facility even if the bid for Potash Corp is unsuccessful. Shares in Potash reacted positively to the announcement.