Investors in Qwest Corp.'s $1.25 billion term loan are counting on $750 million of the debt being taken out in the next six months with proceeds from a $1.75 billion senior unsecured note offering. On June 9 the bank debt becomes callable at 103 for the next six months and the name was trading to the call with quotes of 103 1/4, said a trader.
The four-year loan is priced at LIBOR plus 4 3/4% with a floor of 6 1/2%. Merrill Lynch, Credit Suisse First Boston and Deutsche Bank hold the lead roles on the facility, which was put in place in July 2003. There is also a $500 million fixed-rate tranche, maturing in 2010.
Qwest Communications International and Qwest increased the notes offering by $500 million from $1.25 billion. This comprises an eight-year, $750 million portion, priced at LIBOR plus 3 1/4%; a 10-year, $400 million senior note priced at LIBOR plus 7 5/8% and a nine-year, $600 million note priced at 8 7/8%. In addition to the term loan, the company plans to purchase $904 million of debt securities.