Allied Waste's $600 Mln Bond Deal Sparks Trades

  • 28 Jan 2001
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The rumored bond deal that sent trade levels for Allied Waste into the high 97 range two weeks ago came through last week, as the company announced a $600 million bond deal that will ratably pay down portions of tranches "A," "B" and "C." Dealers said last week that the company may increase the amount to $1 billion. There were a number of trades, each for $5 million, on the Street last Monday at 983Ž 8. Calls to the company were not returned by press time.

Dealers said a bond deal makes sense as it will add liquidity and help pay down the company's debt. "The bond deal is longer dated paper with fixed coupons, so it's managing the capital structure," said a trader. "It depends on the reception in the high-yield market. Everyone's pushing the envelope, doing quick deals. If you're a cfo, it's an opportune time in the market. Doing high-yield gives you the opportunity to reload on the bank side."

While the company will pay more on the bonds---"right now the company is paying eight percent on its bank debt, which is pretty cheap," one trader said--the company is reducing its senior debt and locking in fixed rates in the long-term, dealers noted. Allied Waste has a $7 billion credit facility which breaks down into five tranches. J.P. Morgan Chase, Credit Suisse First Boston, and Salomon Smith Barney are the lead arrangers.

  • 28 Jan 2001

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Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Citi 7,171 21 10.72
2 Bank of America Merrill Lynch (BAML) 6,901 20 10.32
3 JP Morgan 4,776 10 7.14
4 Credit Suisse 4,718 9 7.05
5 Lloyds Bank 4,420 14 6.61

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1 Wells Fargo Securities 68,611.22 170 11.38%
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3 JPMorgan 56,861.85 163 9.43%
4 Citi 56,521.05 165 9.38%
5 Credit Suisse 44,888.95 123 7.45%