Investors are speculating that Wachovia Securities ate a portion of its $200 million Globalstar deal, which launched May 31 but is no longer being offered on Syndtrak and has not broken for trading. Buysiders said Wachovia increased pricing by 150 basis points on a $100 million term loan, added 102, 101 call protection and offered it at 99, but still could not find enough takers to round out the deal. One investor summed up the situation: "Where did it go?" A Wachovia banker declined to comment about the financing. A Wachovia spokeswoman also declined to comment.
When it launched, the credit consisted of a five-year, $100 million term loan priced at LIBOR plus 4%, a $50 million revolver and a five-year, $50 million delayed-draw term loan. According to an April release, the company intends to use the proceeds to fund the design and deployment of second-generation satellite constellation and launch eight spare satellites for its current constellation in early 2007.
At that time $200 million of equity was invested by affiliates of the Thermo Companies. Thermo made a $43 million investment in December 2003 to allow Globalstar to emerge from Chapter 11. A call and email to Jim Lynch, Thermo Capital's managing director and co-founder, were not returned by press time. A Globalstar spokesman referred calls to Wachovia.
Some investors said the deal made them reminisce about Virgin Mobile USA, in which JPMorgan and Merrill Lynch had to shop the $500 million "B" loan at 97 in order to get it done. Investors were worried because it paid a 100% discount to a young company. Pricing was flexed twice during syndication and sat at LIBOR plus 4 1/2%, because the banks had agreed with Virgin that the spread would not go above that level (LMW, 7/25).
