The Warner Music Group will not only get lower rates than previously thought for the $820 million term loan it will take on to pay for the Parlophone Label Group, but the deal will also allow WMG to reduce the rate the company is paying on its existing term loan, according to a report by Bloomberg News.

That report suggests that WMG will pay a rate of LIBOR plus 2.75%, with a LIBOR floor minimum of 1%. Since LIBOR is currently below 1%, that means the effective rate would be 3.75% for the loan. It was originally thought that the loan would be priced at LIBOR, with the same minimum, plus 3.25%, which means a rate of 4.25%.

Moreover, WMG is also negotiating for a reduced rate — the same rate as it hopes to get for its new term loan — on its existing $492 million term loan, which currently carries LIBOR plus 4%, with a minimum LIBOR floor of 1.25%. That calculates to a rate of 5.25%, which means WMG is negotiating to lower that rate by 1.50 percentage points.

Since WMG hasn’t taken the loan yet because it has yet to gain EU regulatory approval to close the acquisition, the loan is not yet priced. Until the deal is priced, the above percentages are likely informed speculation. But if WMG is successful in obtaining those rates, it will shave $11 million off the $212 million in annual debt service that Billboard estimates it will have to pay on its $2.88 billion in debt. [Billboard.biz]