Banks Discount Virgin To Tempt Wary Investors

Leads JPMorgan and Merrill Lynch are shopping the $500 million "B" loan for Virgin Mobile USA at 97-98.

  • 22 Jul 2005
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LeadsJPMorgan and Merrill Lynch are shopping the $500 million "B" loan for Virgin Mobile USA at 97-98. One buysider said the discount on the loan, which has been kicking around since June, is necessary because investors are wary about the fact it provides a 100% dividend to a young company that has little in the way of hard assets. Pricing has already been flexed twice since launch in June to try and drum up investor interest. It now sits at LIBOR plus 4 1/2% on both the term loan and a $100 million revolver.

According to lenders, the banks have agreed with Virgin that the spread will not go above this level, which is why they are discounting the loan. However, at this level, bankers expect the deal to clear the market.

Pricing on the "B" was initially quoted at LIBOR plus 3 1/2% and was then increased to LIBOR plus 4%. Moody's Investors Service assigned a B3 to both tranches citing the company's high leverage, current lack of free cash flow and lack of asset protection available to lenders in a distress scenario. A JPMorgan spokesman and a Virgin spokeswoman declined comment.

  • 22 Jul 2005

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 301,728.92 1170 8.05%
2 JPMorgan 294,792.92 1287 7.86%
3 Bank of America Merrill Lynch 277,049.56 932 7.39%
4 Barclays 229,666.94 852 6.13%
5 Goldman Sachs 204,014.81 670 5.44%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 BNP Paribas 43,227.81 174 7.06%
2 JPMorgan 38,825.76 78 6.34%
3 Credit Agricole CIB 33,071.14 158 5.40%
4 UniCredit 32,342.86 144 5.28%
5 SG Corporate & Investment Banking 31,330.98 120 5.12%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 13,022.65 55 9.04%
2 Goldman Sachs 12,059.06 58 8.37%
3 Citi 9,451.48 53 6.56%
4 Morgan Stanley 8,054.41 48 5.59%
5 UBS 7,829.15 30 5.44%