A $5 million piece of VoiceStream Wireless' bank debt traded at 99 1/2 last Monday, which is level to a trade two weeks ago. Dealers expect the credit will soon hit 100 as the company moves closer to merging with Deutsche Telekom. Last week the Federal Communications Commission approved the acquisition. "It just passed a regulatory hurdle, and Deutsche Telekom expects to complete the merger by the end of the month," a trader noted. "It will either be taken out or lenders will effectively own Deutsche Telekom risk. Either way, they are very cheap." He added that the bonds are 114 3/4 bid.
VoiceStream has a $3.25 billion deal that breaks down into three tranches. Pricing starts at LIBOR plus 2 1/2% to 3%, according to Capital DATA Loanware. Goldman Sachs, Credit Suisse First Boston, Bank of America, Barclays Capital, J.P. Morgan Chase, Salomon Smith Barney, TD Securities and SG Cowen Securities are the lead arrangers.