Citigroup is leading a $2.2 billion bank financing backing Ameritrade's acquisition of TD Waterhouse Group, the U.S. discount brokerage operation of Toronto Dominion Bank. The combined entity will operate under the name TD Ameritrade. The deal consists of a five-year, $300 million revolver; a six-year, $250 million term loan "A" and a seven-year, $1.65 billion term loan "B." Pricing could not be determined by press time. The deal will also pay a special dividend of $2.4 billion or about $6 a share.
The bank meeting last Thursday at the Four Seasons hotel in New York was well attended, according to an investor, and the presentation lasted over two hours. Commitments are due by Jan.17. Merrill Lynch, UBS and JPMorgan are also involved. According to a Securities and Exchange Commission filing, the deal has initial leverage of 2.1 times. A Citigroup spokesman was unavailable for comment. Calls to TD Waterhouse and Ameritrade were unreturned.