ntl's pro rata tranches, comprised of a £1.275 billion "A" loan and a £250 million revolver, have been trading actively in the 95-97 context with about $100 million trading. "It's just finished general syndication, the lead banks are in the process of selling some of their exposure," a European trader said.
A loan market participant said lead banks Credit Suisse First Boston, Deutsche Bank, Goldman Sachs and Morgan Stanley are still holding some of their positions. Another 10 banks act as sub-underwriters, including BNP Paribas, Citigroup, Crédit Agricole and GE Capital. "A coordinated [sell] down from the arrangers is going on now and is expected to continue for awhile," the trader said. "The lead banks have done the underwriting for fees. They don't want to hold a lot of capital," a buysider commented.
"You have to sell through the four main underwriters who allocate pro rata according to which of the underwriters and sub-underwriters wants to sell," he added. The controlled sell-out expires in four weeks and the debt holders will be able to sell their portions off, he noted. Five-to-10 more trades are expected to occur before the controlled sale on the cable operator's debt expires.
The pro rata is priced at LIBOR plus 2 1/4% and was reportedly sold with a 2 1/4% fee. "After investors lost money, it's a struggle to sell cable in Europe," the buysider noted. The financing also contains a £900 million eight-year "B" piece. The "B" loan is split into sterling, euro and dollar tranches and pays LIBOR plus 3%. Officials at the lead banks either declined comment or did not return calls. An ntl official did not return calls by press time.