Lehman Brothers held a bank meeting last week for TSI Telecommunications Services backing the $800 million GTCR Golder Rauner cash bid at the Intercontinental Hotel in New York. Bankers said the deal is finding it tough going. Price talk on the $200 million, six-year term loan "B" is LIBOR plus 4% said a banker, familiar with the deal. The $135 million pro rata deck consists of a $35 million revolver and a $100 million, five-year term loan "A" with pricing in the LIBOR plus 31/ 2% range. Accompanying the bank debt is $245 million in high-yield notes. Senior and total leverage to EBITDA is in the low two and low fours, he added. Relationship lenders of GTCR have been approached for the pro rata, he noted, but no banks have yet signed on at press time.
An aggressive financing package helped GTCR win the auction, with Lehman willing to provide more cash than other banks to rival private equity firms (LMW, 12/17). Some bankers suggest the deal is a tough sell as a result, is said to be struggling, but according to another banker, the aggressive deal must be seen in the light of post-September. At the time of pitching for the financing, banks were being more cautious, but recent deals, such as J.P. Morgan, Credit Suisse First Boston, Deutsche Bank and Merrill Lynch's Collins & Aikmans deal completed a couple of weeks ago, highlight where the market is today, he added. The deal was pulled in September when market conditions made it tough to raise the financing, but on return towards year-end, overwhelming investor response saw price flexing, indicating the market has improved substantially over October and November, he explained.