Optimism in Buyout Deal Props Up VoiceStream Wireless
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Optimism in Buyout Deal Props Up VoiceStream Wireless

A $5 million piece of VoiceStream Wireless bank debt traded last week as dealers waved off the recent announcement of Deutsche Telekom's fourth quarter earnings losses and any harm that might do to its bid for Voicestream. Dealers reported a trade of the "A" tranche at 99 3/8, which is up slightly for the name. Calls to Voicestream, based in Bellevue, Wash., were not returned by press time.

Late last year, traders were eyeing Deutsche Telekom's stocks, which would be used to buy VoiceStream. At the time, they reported some skepticism about the deal, and VoiceStream's levels dipped slightly. But last week traders seemed unaffected by Deutsche Telekom's most recent announcement, citing growing confidence in the upcoming deal. "People are giving credence to previous sentiments that the deal will go ahead," a market watcher noted. "While the news is negative, they're sticking with the previous statements by [Deutsche Telekom's] management."

A dealer predicted the acquisition will go through within the next three months. The deal has federal regulatory approval, he noted, and the announcement by Deutsche Telekom "was somewhat expected. They've made so many acquisitions and have so many assets, but it's still A1 rated."

VoiceStream has a $3.25 billion deal which breaks down into three tranches and is priced at 275 basis points over LIBOR. The mandated arrangers are Goldman Sachs, Credit Suisse First Boston, Bank of America, Barclays Capital, J.P. Morgan Chase, Salomon Smith Barney, TD Securities and SG Cowen Securities, according to Capital DATA Loanware.

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