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European Banks Hike Loan Rates

Porsche pays 170 basis points over benchmark for new credit line.

By Stephen Morris | Updated on October 18, 2011

European lenders are charging higher interest margins to companies including Porsche SE and limiting dollar loans to bring their own ballooning costs in line with those they charge borrowers.

Porsche agreed to increase the margin on a new 3.5 billion-euro ($5 billion) credit line last week to 170 basis points more than benchmark rates after banks balked at the initial 120 basis points proposed by the maker of the 911 sports car, two people with knowledge of the deal said. That followed increases to fees for drawing on credit lines in recent weeks.

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