UBS Warburg and Bank of America next week will launch general syndication of their $3 billion term loan backing Devon Energy's acquisition of Anderson Exploration. General syndication is ready to roll now that $3 billion of bonds--the other part of the financing package--were sold at the end of September. A UBS banker said originally the top-tier banks were allocated $600 million pieces, and now each bank will syndicate $300 million as the bonds take out the first two to three years of bank debt. The bank meeting will be Oct.18, he said, though fees have not yet been set. The $3 billion of bonds was split into $1.75 billion of 10-year notes priced at 67/ 8% and $1.25 billion of 30-year notes priced at 77/ 8%.
The loan and bonds form a $6 billion financing package backing the purchase of Calgary-based independent senior oil and natural gas producer Anderson Exploration. In addition to UBS and B of A, First Union, J.P. Morgan, Royal Bank of Canada, ABN AMRO, Deutsche Bank, Credit Suisse First Boston, Citibank and Bank of Montreal are lead lenders. Pricing on the loan is LIBOR plus 3/4 % following a Baa2/BBB+ rating by the agencies. If the rating is downgraded to BBB byStandard & Poor's, the spread will rise 1/4% (LMW, 1/10).