CIBC, Deutsche Bank Land High-Voltage Deal

  • 27 Jan 2002
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CIBC World Markets and Deutsche Bank have landed lead roles on an upcoming $290 million credit backing Trans-Elect's acquisition of The Michigan Electric Transmission Company and have done so because of early bird interest in the transmission business and a strong relationship with the company treasurer. "Both the CIBC and Deutsche Bank teams have long-standing relationships with me," stated Martin Walicki, senior v.p., finance and treasurer for Trans-Elect. The target is a subsidiary of Dearborn, Mich.-based CMS Energy.

Walicki was previously v.p and treasurer for CMS responsible for all corporate, lease and project finance activities and both banks had previous experience structuring transactions for Consumers, he noted. "In mid-2000, CIBC showed interest in the transmission business and Trans-Elect and helped organize the bid from an equity and debt perspective," he explained. GE Capital Global Energy, a unit of GE Capital Structured Finance, is a limited partner with Trans-Elect in purchasing these assets. "No other banks were approached," said Walicki, since there was a short timeframe to bid for CMS and committed financing was required. This was the first transmission acquisition of its type in the U.S. and there was not significant interest in the business from other banks at the time. "A few more institutions are now paying attention to the business," he added.

The deal will be broken down into a $200 million bank loan at the operating company level and a $25 million revolver. There will also be a $53 million loan at the holding company level. CIBC and Deutsche Bank will tap the institutional market, Walicki commented. Required approval from the U.S. Federal Regulatory Commission is expected in a few months and the bank deal will be syndicated once that has been granted.

The purchase marks the first U.S. sale of a major utility's electric transmission system to an independent company. A law passed in Michigan required the state's major electric utilities to either divest their electric transmission systems or turn over operating control to an independent entity. A spokesman for CMS, referred questions regarding the bank deal to Trans-Elect

  • 27 Jan 2002

GlobalCapital European securitization league table

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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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2 SG Corporate & Investment Banking 1,292.64 1 9.39%
2 Rabobank 1,292.64 1 9.39%
4 Mizuho 1,215.54 3 8.83%
5 Wells Fargo Securities 1,012.71 4 7.36%