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Goldman To Bypass Banks On Credit Backing Verizon's Cellular Acquisition

Goldman Sachs is setting its sights on the institutional market for a $350 million credit backing Verizon Wireless' $1.7 billion acquisition of Price Communications' cellular business. According to an official familiar with the deal, Verizon decided to come to market with an all-institutional facility because banks are generally terrified of the notion of adding telecom or wireless exposure to their portfolios right now. In addition, the Bedminster, N.J., cellular operator was looking for a deal that could be completed in a reasonable amount of time, so the deal is priced to move, he noted. Calls to Paul D'Auria, treasurer, were not returned by press time.

Goldman launched syndication of the credit at a bank meeting last Wednesday. The five-year "B" term loan offers all-in pricing of 4 1/4 -4 3/4 % over LIBOR. Goldman is hoping to wrap up syndication by the end of this week. Goldman officials declined to comment.

The credit is rated A+ by Standard & Poor's and Baa1 by Moody's Investors Service. One buysider called the deal very attractive, given its strong ratings and appealing pricing. But even with juicy pricing, buysiders have their own reservations about the troubled telecom world. One potential investor said he liked the deal itself, but noted that it is coming from a tough sector and it may be a difficult sell for some investors.

Verizon originally was planning to finance the transaction through a tax-free exchange of stock, but the company has yet to come to market with its initial public offering.


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