Search results for

Tesoro Petroleum will return to the bank market for financing to back the $945 million acquisition of the Golden Eagle refinery from Valero Energy. Tesoro will also purchase the value of inventory, estimated to be $130 million. Lehman Brothers is said to be leading the financing, which will result in $375 million in term loans, a $70 million revolver, $450 million of subordinated debt and an up to $250 million equity component. The financing will be done "as soon as possible," said a banker, unable to provide more precise timing. Bankers at Lehman and Tesoro officials did not return calls.

IHS Healthcare Group dove to 51 from 63 this week following fears that long-term care is no longer a high priority on the congressional fiscal agenda. By Wednesday, $50 to $75 million had traded on IHS and traders pointed to the whole sector as one to watch as it may quickly fall from grace.

Tyco International and its lending subsidiary Tyco Capital/CIT Group drew down bank credit lines after exiting the commercial paper market, to make the international conglomerate less susceptible to rumors in the financial markets. "The drawing down on the bank lines makes us [Tyco] less susceptible to various market rumors, including those that say we have liquidity issues, which if left to grow could become a self-fulfilling prophecy," said Dennis Kozlowski, Tyco's chairman and ceo in a conference call to reassure analysts.

Morgan Stanley and Credit Suisse First Boston last week launched syndication of a refinancing deal for Graphic Packaging International. The $450 million bank deal consists of a $300 million, five-year revolver and a $150 million six-year "B" term loan. Pricing on the revolver is LIBOR plus 2% with a 1/2% commitment fee, and LIBOR plus 3% on the institutional tranche. Golden, Colo.-based GPI is also offering $250 million in subordinated notes. The credit refinances a $325 million, five-year term loan and a $400 million revolver. Bank of America is the agent on the existing lines. Questions to CFO Luis Leon were referred to Paddy Broughton who declined to comment.

Goldman Sachs has hired H.C. Liu, Asian head of equity derivatives (ex-Japan) at Dresdner Kleinwort Wasserstein in Hong Kong, in a new position as director of equity derivatives sales in Hong Kong, according to David Voon, managing director and head of equity derivatives in Hong Kong. Voon declined further comment and Liu, who started two weeks ago, declined comment.

Italian construction company Astaldi is planning to enter an interest-rate swap to convert the euro proceeds from a recent fixed-rate bond offering into a floating-rate liability. Giorgio Bianchini, head of finance in Rome, said the company is likely to convert a portion of the EUR150 million (USD132 million) deal, which was priced earlier this month, into floating. He said the company will leave between a third and half of the EUR150 million issue in fixed-rate.

Daido Life Investment Trust Management, with over JPY300 billion (USD2.3 billion) under management, is considering purchasing credit-default protection for its JPY1 billion (USD7.5 million) domestic convertible bond portfolio, once it receives the okay from regulators. A fund manager at Daido in Tokyo said that as the convertible bond portfolio is part of a public fund, it is currently prohibited in Japan to use credit derivatives. However, the fund manager mentioned that this is currently being discussed internally, and he believes that within six months it will approach The Investment Trust Association, Japan, a self-regulating body for investment trusts, to get approval and possibly buy credit-default protection within 12 months.

The International Swaps and Derivatives Association is petitioning the Czech Republic and Slovakia to allow close-out netting. Peter Warner, assistant director of European policy at ISDA in London, said it had meetings in the two countries last week and expects both countries to pass legislation by year-end.

JPMorgan has started marketing a synthetic collateralized debt obligation referenced to a USD1 billion portfolio of investment-grade bonds. The CDO, dubbed AMBER, has an actively managed reference pool, according to potential investors who have seen the preliminary proposals for the deal. It could not be determined who will manage the deal. Officials at JPMorgan declined comment.

KBC Financial Products started lobbying the Stock Exchange of Hong Kong last week about listing capital guaranteed notes--structured with over-the-counter derivatives--on the exchange, according to Sajeev Sirpal, managing director and head of Asia in Hong Kong. A typical capital guaranteed note will consist of a combination of a zero-coupon bond and a structured over-the-counter call funded by the interest on the note.

Market makers bought approximately one yard of USD0.8650 one-week euro puts/dollar calls Jan. 25 and Jan. 28, which sent implied volatility rocketing to 11% from 9.5%. Spot was trading around USD0.8630 when the options went through, according to traders.

Merrill Lynch plans to structure a managed synthetic collateralized debt obligation by the end of the first quarter. The deal is likely to be referenced to a EUR750 million (USD643 million) pool of investment-grade credits, according to Hermann Watzinger, managing director and head of securitization and portfolio credit derivatives in London. He added that the reference pool will be split into 80% European names and 20% U.S. names because investors have more appetite for European corporates.