Ameritrade's $1.65 billion term loan "B" broke at 100 1/2 in the secondary market last week and continued to trade in that range. Citigroup leads the deal, which is priced at LIBOR plus 1 1/2%. The bank financing backs Ameritrade's acquisition of
TD Waterhouse Group, the U.S. discount brokerage operation of Toronto Dominion Bank. The credit line also consists of a $300 million revolver and a $250 million "A" term loan.
Ameritrade plans to use the proceeds from the "A" and "B" term loans to fund a $2.3 billion special dividend to Ameritrade shareholders as part of its merger with TD Waterhouse, according to Moody's Investors Service. The rating agency assigned a Ba1 rating to the loan facilities, which reflects the merged company's strengthened position in the on-line discount brokerage industry and its low, flexible cost structure. It also writes in a report that the merger will result in high leverage and modest cash capital position. A spokeswoman for Ameritrade did not return calls.