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 JPMorgan 192,079.22 851 8.17%
2 Citi 181,567.62 744 7.72%
3 Bank of America Merrill Lynch 152,466.12 623 6.48%
4 Barclays 142,653.63 569 6.06%
5 HSBC 120,106.34 625 5.11%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 Credit Agricole CIB 21,924.17 77 8.15%
2 BNP Paribas 19,758.95 84 7.35%
3 Bank of America Merrill Lynch 17,751.88 49 6.60%
4 Deutsche Bank 12,953.29 48 4.82%
5 UniCredit 12,630.44 68 4.70%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 Morgan Stanley 6,404.49 28 10.24%
2 JPMorgan 5,949.53 36 9.51%
3 Goldman Sachs 5,596.92 27 8.95%
4 UBS 4,138.47 20 6.62%
5 Citi 4,111.21 29 6.57%