CSFB Pulls GXS Credit In Order To Complete Deal

  • 06 Oct 2002
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Credit Suisse First Boston, faced with an end of September deadline, pulled its $210 million credit facility backing Francisco Partners' acquisition of Global eXchange Services (GXS) from the market last week and funded the deal itself. "They probably had no choice, if they wanted to keep the business," a banker watching the deal said. CSFB plans to re-market the credit later this year or early next year, depending on market conditions, another banker said, adding that trading the paper off its desk would be too sloppy. Jean-Jacques Charhon, cfo of GXS, and a spokesman for Francisco Partners did not return calls by press time.

CSFB had been offering the $175 million "B" term loan with a 2% upfront fee and still found it hard to solicit commitments. A banker familiar with the situation said CSFB was able to get some investors to commit to the credit, but it wasn't enough to get the deal done. Investors had been concerned about investing in the tough e-commerce sector, regardless of how strong the company itself looked, and pricing that they thought did not match the risk. The five-year "B" piece was priced at LIBOR plus 33/ 4%, while the six-year, $35 million revolver was priced at a LIBOR plus 31 /2 %. A CSFB banker declined to comment on the deal.

The entire financing of the acquisition has been bumpy. Last month, GE Capital Corp. stepped in and bought $235 million of senior subordinated notes backing the $800 million acquisition after Francisco Partners decided to skip the bond market (LMW, 9/23). Market players said that tactic caused some investors to be even more wary of the loan backing the transaction.

  • 06 Oct 2002

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1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

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3 Wells Fargo Securities 9,632.91 31 9.00%
4 JPMorgan 9,162.38 30 8.56%
5 Credit Suisse 4,676.43 10 4.37%