Morgan Stanley and Bank of America have five tickets in hand and are closing in on another in their retail effort for Tyco International's $1.5 billion credit. ABN AMRO, Credit Lyonnais, Société Générale, UBS Warburg and CIBC World Markets signed onto the fully underwritten deal with $100 million bids from each, according to bankers familiar with the facility. All of those commitments came in ahead of the launch meeting last Monday. A banker added that Scotia Capital was reportedly close to joining as LMW went to press last Thursday.
The 364-day, unsecured revolver is priced at LIBOR plus 31/ 4% with a cap of one percentage point tied to the yield on Tyco's 2006 bonds. This means that if the yield on the bonds rises above the loan's rate, the loan's pricing will increase to stay one point ahead of the bonds up to LIBOR plus 41/ 4%. There is also a $1.2 billion allowance for letters of credit in the facility. The commitment deadline is mid-February. Morgan Stanley and Credit Lyonnais officials declined to comment, while B of A, ABN, Soc Gen, UBS and CIBC bankers did not return calls by press time.
J.P. Morgan, Citibank, Goldman Sachs, and Credit Suisse First Boston also underwrote the line with the two leads, with each backing equal $250 million portions of the credit. These lenders also underwrote Tyco's $4.5 billion convertible bond offering announced last month. J.P. Morgan, Citibank, and Goldman were initially involved in plans to lead the credit, but Tyco reportedly switched to Morgan and B of A after receiving a more appealing rate offer from the duo. Tyco will use the new credit to refinance its previous 364-day credit that was set to expire this month. A Tyco spokesman did not return calls by press time.