Deutsche Bank and Credit Suisse First Boston held a bank meeting last Wednesday, looking for managing agents in a $1.25 billion bank deal refinancing a $1.75 billion PanAmSat note, currently provided to the company by General Motors. The $1.25 billion credit is part of a series of financings, connected to acquisitions by EchoStar Communications. The credit is split between a $250 million revolver, a $400 million term loan "A" and a $600 "B" loan with pricing on the pro rata at LIBOR plus 23/ 4% and 31/ 4% over LIBOR on the "B" tranche. "This is one of the ways General Motors is getting cash," a banker said.
CSFB stepped in to provide a $2.75 billion bridge loan to back EchoStar's acquisition of Hughes Electronic and PanAmSat last month from GM, after UBS Warburg got cold feet on providing the bridge. Deutsche Bank also provided a $2.75 billion bridge to finance the transaction. Providing the bridge loan certainly gave the banks the edge in the extra business, one banker said. UBS is potentially set to lose out on almost $60 million in fees connected to EchoStar and PanAmSat transactions, according to bankers. There is also a $700 million bond offering being led by Deutsche Bank and CSFB and the duo had a role to play in the $1.5 billion equity sale to Vivendi Universal. "Pending approval of the Hughes bid, there is a lot more bank debt on the horizon," added a banker, regarding the Hughes piece of the acquisition. Regardless of the rest of the acquisition PanAmSat will go through, he said.