Wind Spa's Eu5.5 billion limited recourse facility is drawing to the end of its last stage of syndication. The deal marks Europe's largest telecommunications project financing to date. ?It should be wrapped up by the end of the week?, states a representative from one of the lead arranging banks. ?It has gone very well. There are a huge number of banks involved.?

It certainly had good prospects going into general syndication, with 28 lenders already on board. A crucial factor in the success of senior syndication was the offer of mandated lead arranger status and fees. This tactic proved lucrative for 3G operators E-Plus and Amena in their attempts to raise debt earlier this year. For Wind, underwriting commitments at this level were Eu225 million for an underwriting fee of 70bp and a further 75bp for final takes of Eu150 million.

The senior bank line up reads as follows. The original mandated lead arrangers ABN Amro, IntesaBci (joint bookrunner), BNP Paribas, Citibank/ SSSB (joint bookrunner), DrKW and JP Morgan (joint bookrunner) were joined by a further fourteen. These are Banca Antoniana-Popolare Veneta, Banca Monte Dei Paschi Di Siena, Banca Nazionale Del Lavoro, Bayerische Landesbank, Centrobanca, Credit Agricole Indosuez, Credit Lyonnais, Credit Suisse First Boston, Mediobanca, Mediocredito Centrale, Bank of Tokyo Mitsubishi, Royal Bank of Scotland, Sanpaolo Imi Spa and Sumitomo Bank.

At arranger level, Banca Popolare Di Milano, Deutsche Bank, Dexia Bank, Efibanca, Goldman Sachs, Rabobank and Westdeutsche Landesbank. All banks joining at senior syndication were signed in on 28 September.

With the debt underwritten by an impressive profile of Italian and international banks, general syndication seemed like a fairly safe bet. It was launched with a bank meeting in Rome on 27 September. Sceptics have voiced concern that the markets were drained of much liquidity at the senior stage, leaving insufficient for lower levels. But, a source involved in Wind counter-argued that since much of the leveraged market has taken a blow from perceived global economic slowdown, fans of high yield deals do not have much to choose from. Italy, in particular, is not by any means saturated. There are an enormous number of local banks hungry for deals.

In general syndication, tickets are up for grabs at senior co-arranger level for an Eu75 million commitment with an upfront fee of 70bp. Co-arrangers are offered 60bp for Eu50 million and senior lead managers can come on board with a ticket of Eu25 million for 40bp.

The loan breaks down into Eu4 billion term loan and a Eu1.5 billion revolver, both with a tenor of 9.5 years. Margins start at 175bp and then ratchet down to a low of 65bp according to the ratio of Wind's net financial indebtedness.

Healthy returns and a high status for joining banks are key components of this deal. But sources highlighting its success are quick to point to the company's strong sponsor profile and business track record. Enel, one of the world's largest utilities with a generating capacity of 53.3GW, is Wind's majority shareholder with a 73.4% holding. France Telecom is the minority shareholder.

Since its launch at the beginning of 1999, Wind has grown at an impressive rate. With over 10 million customers, comprising some 6.5 million mobile lines, 2.9 million fixed lines and 1.3 million internet users, Wind is one of Italy's leading integrated telecoms operators. In July of this year Enel purchased rival Infrostrada, an Italian fixed, alternative and internet operator. The corporate merger of Infrostrada into Wind will occur once the current financing is in place, giving a further boost to Wind's operational profile. The company itself states that it sees itself becoming the real competitor to incumbent Telecom Italia.

Eu3.64 billion of the Eu5.5 billion debt will be used to refinance two outstanding loans. Eu2.4 billion was raised in the debt markets on 31 July 2000 and a further Eu1.239 billion on 28 September 2000. The remaining Eu1.86 billion will be used to continue and complete roll out of fixed, mobile and UMTS network.

Wind secured a UMTS license in the Italian auctions of October 2000. However, unlike a number of telecoms operators across Europe, this purchase did not leave them so saddled with debt that they were unable to continue planner operations. The licence's price had allegedly been factored into the business plans when raising debt earlier that year. This proven track record of maintaining liquidity inspires lender confidence.

So much confidence, in fact, that there is allegedly no vendor guarantees covering 3G technology. ?It is a myth that bankers will not lend against UMTS build out,? says one telecoms banker. ?If the structure is right, then it can be done.?

Timing is also a crucial aspect when financing large telecommunications projects. In the current climate, lenders are choosy about which deals they will support. If there are two major new-technology financings out in the market at the same time, one is likely to perish. This has been the case with a number of the smaller operators in Europe this year. ?People knew about Wind,? says one insider. ?The successful financings of last year gave it a high profile and people were waiting for the take out this year.?