Search results for

Bank of America, looking to take advantage of favorable conditions for health sector names, is considering an upsize on its bank deal for McKesson. A banker familiar with the deal said an increase of $250 million onto the originally planned $825 million is probable. B of A launched the 364-day rollover in mid-September with pricing at LIBOR plus 3/4%. "What you're seeing is defensive credits doing well," the banker added, noting staple consumer goods or health care as examples. He pointed to Church & Dwight and Kelso's joint venture, dubbed Armkel, which closed last week, as an example. A syndication official at B of A declined comment.

Charter Communications' bank debt bounced around last week, dropping to 95 3/4 and then traded back up to 961/ 2 in a series of $5 million trades. The credit, which had been one of the strongest and most liquid names, has started to soften as the recently syndicated $2 billion deal for Adelphia Communications pumped more cable paper into the market.

CIBC World Markets and Citibank last week launched syndication of a $360 million credit for CommScope that backs the planned joint venture with Furukawa Electric Co. of Japan to buy a portion of Lucent Technologies' optical fiber business. The credit consists of a four-year $50 million revolver, an $85 million term-loan "A" and a $225 million, five-year "B" tranche. Pricing on the pro rata is LIBOR plus 3% and LIBOR plus 31/ 2% on the institutional tranche.

Crown Cork & Seal's bank debt traded into the mid-85 range last week, which is a slight uptick in levels. Dealers said the credit traded as low as 81 1/2 recently then notched back up in a series of three trades. An estimated $20-30 million changed hands over the course of the week. Dealers, declining to name specific shops, said most desks are active in the credit. "I'm not sure there's a fundamental issue here. People's opinions on asbestos-related credits are affected by what's happening with other asbestos names," a trader said, adding that Federal Mogul's filing for Chapter 11 was "expected."

The anemic high-yield bond market is starting to impact bank deals as bond portions of packages are shelved and bank pieces figure to be either reworked or pulled. No company with purely non-investment-grade ratings has sold corporate bonds since Sept. 11, and at least two bond/bank packages are feeling the pinch.

Carl Icahn is reportedly taking a position in the bank debt of Federal-Mogul, which filed for bankruptcy protection last week. Icahn, who has big positions in the company as a shareholder and a bondholder, would be looking to improve his position in the restructuring. Repeated calls to his office were not returned. Calls to G. Michael Lynch, cfo of Federal-Mogul, were referred to spokeswoman Ann Julsen, who declined to comment on players in the company's bank debt.

ING Capital Advisors is looking to unveil products this year specifically geared to gain investment from pension and endowment funds. Michael Campbell, managing partner, said the fund has been working on addressing the market for several years and "plans will be closer to fruition in the next 12 months," said Campbell. He said tapping the markets is a major initiative of the firm. "The pension fund market is a huge segment and to date very little as been invested in the loan market," said Campbell, explaining that penion and endowment funds invest most heavily in the high yield and equity markets. The new initiative will be part of Campbell's efforts after his promotion from chief credit officer to managing partner two weeks ago.

Bear Stearns' deal for Appleton Papers is being met with a rugged response from both the buyside and bankers uncomfortable with the structure of the deal and concerned about the company's main business line. Last week pricing on the $250 million "B" tranche flexed 1/2% to LIBOR plus 4%, but even at that level investors said they are not eager to commit. The credit backs the $810 million management-led buyout of the company from Arjo Wiggins Appleton.

The Korean government is in a hurry to get its privatisation programme back on course. The roughly $500m combined CB and Global Depository Receipt (GDR) issue for Korea Tobacco & Ginseng (KT&G), pulled from the market after the September 11 attacks, should be launched within two weeks. The government is contemplating an unusual exchangeable bond structure that could be tried out by Korea Deposit Insurance Corporation (KDIC). KT&G postponed plans to start marketing $494m worth of shares and convertible bonds immediately after the terrorist attacks on the US. However, bankers told EuroWeek that investors across the globe are indicating that a large issue from a defensive stock such as KT&G would be acceptable now that world markets have settled down somewhat.

The Japanese unit of US coffee shop giant Starbucks Corp has set a price of ¥64,000 per share for its IPO on Nasdaq Japan on October 10. The deal is one of the few in Japan that has survived the post-September 11 shakeout, but there are already signs that the market for new issues might soon pick up. Brushing off the crisis in the global financial markets, Starbucks Coffee Japan, the Japanese unit of the Seattle-based company, recently set an indicated price for the IPO of between ¥57,000 and ¥67,000. The company is offering 220,000 new shares and 60,000 existing shares in an issue that, at ¥64,000 per share, is designed to raise as much as ¥18.8bn ($160m). Goldman Sachs is the lead manager.

When bankers working on equity issues are not available to talk, there is usually a problem brewing. That was the case last week - bankers working on the revived offer for Australian Magnesium Corp (AMC) were unavailable last Thursday. On Friday the company announced that it was postponing the deal for a second time. AMC said it was delaying its repackaged and downscaled A$500m share sale again, this time due to unstable markets.

Australia Commonwealth Bank of Australia has increased its EMTN programme to $10bn from $5bn. The bank, rated Aa3/AA-/AA, has also added JP Morgan to its dealer panel and dropped Goldman Sachs and Lehman Brothers.