Vodafone gets $3.5 billion of loans from five banks

Vodafone Group, the mobile phone operator that's buying Hutchison Essar, is borrowing $3.5 billion in private transactions with five banks.

"This is for general corporate purposes,'' said Bobby Leach, a Vodafone spokesman. The loan won't be used to fund the takeover of Hutchison Essar, which Vodafone is financing "through our own resources,'' he said.

Vodafone has agreed to pay $11.1 billion for Mumbai-based Hutchison Essar, prompting Moody's Investors Service yesterday to warn it may cut the company's investment-grade bond ratings on concern about rising debt.

Vodafone said its net debt will rise to £23.3 billion by March-end compared with £20.3 billion at the end of September. The loans are underwritten by BNP Paribas, Lloyds TSB Group, UBS AG, Royal Bank of Scotland Group and Banco Santander Central Hispano, Leach said.