Credit Suisse First Boston has stepped up to join Deutsche Bank to fully underwrite the $5.5 billion bridge loan to EchoStar Communications to finance the Hughes Electronics acquisition from General Motors for $24.6 billion in cash and stock, after market players were mystified as to why Echostar's advisor, UBS Warburg, was not on the roster. CSFB advised Hughes on the deal.
David Walker, the UBS spokesman said last week, "the bank was fully prepared to extend financing to EchoStar, but not in an imprudent and unconditional basis" (LMW, 11/5). The conditions appear to revolve around the terms of the out clauses, standard agreements between banks and companies allowing the banks to withdraw commitments if the market or company experiences a catastrophic event. UBS Warburg was not happy about the terms, but market sources suggest that CSFB and Deutsche Bank would not have made the commitment on unacceptable terms either. One banker suggested the real issue behind UBS' unwillingness to commit is that the deal is such a large non-investment grade credit. "UBS has a history of committing capital to support its clients and will continue to do so in the future," said Walker, explaining the bank looks at deals on a case-by-case basis and is willing to commit to both investment and non-investment grade credits.