The long awaited $2.215 billion Dex Media West leveraged buyout credit hit the ground running last week, with investors consuming the $1.2 billion "B" piece soon after the bank meeting last Monday. The "B" loan was increased from $1.05 billion by $150 million after the concurrent bond deal backing the company's leveraged buyout was decreased by the same amount late last week. A banker said there was also talk of institutional investors possibly jumping into the $960 million "A" piece, but this could not be confirmed by press time. J.P. Morgan, Bank of America, Deutsche Bank, Lehman Brothers and Wachovia Securities are shopping the credit.
A trader noted that Dex Media West's trading ceiling may be a bit lower than Dex Media East's because it is priced lower. Dex Media West's six-and-a-half-year "B" piece is priced at LIBOR plus 23/4%, while the six-year "A" loan and $100 million revolver are priced at LIBOR plus 3%, according to market players. Dex Media East's $700 million "B" loan is priced at LIBOR plus 4%. However, he said the credit quality and structure of the East and West deals are still very similar and the West deal should most likely trade above par. If you have a credit people like in an industry people like, the deal should trade well, he said. "[Dex Media West] just won't trade too high above par," he added.
The new money credit is also joined by $1.165 billion in bonds that priced last Thursday. The bond offering--which includes $780 million in senior subordinated notes and $385 million in senior notes--was essentially wrapped up ahead of last week's blackout. Dex Media West's financing package is the second half of a directories business sale by Qwest Communications International to a group of firms led by The Carlyle Group and Welsh, Carson, Anderson & Stowe. The total sale is for over $7 billion and Dex Media West's purchase price is $4.3 billion. Dex Media East--which comprised the first half of the directories sale--was for $2.75 billion. A J.P. Morgan spokesman and a Lehman official declined to comment, while B of A, Deutsche Bank and Wachovia bankers did not return calls. Officials at Qwest or the buyout firms could not be reached by press time. --Judy McDermott