Bank of New York and Sun Trust Bank have come on board as syndication agent and documentation agent, respectively, for CIBC World Markets' $265 million credit for Adams Outdoor Advertising. Bankers following the deal said that another two banks are already on the revolver and that half of the $200 million institutional tranche is filled. The names of the banks could not be ascertained.
A banker said a select group of institutions was approached, as "demand is strong and investors are sick of committing $15 million and receiving $10 million pieces." Enough institutions were approached to fill the credit but not much more and this tactic is becoming more popular, he said. The strategy of cultivating a few select institutions works well for banks outside of the top five, he commented.
Investor appetite for single-B loans is also growing, as many institutions have maxed out on double-B over the last six months and now need to fill out on the lower-rated credits, the banker said. The lower-rated paper acts as a balance to the lower returns on higher-rated deals in a collateralized debt obligations, he explained. The bank meeting was held June 21. The credit is split between a $65 million revolving credit priced at LIBOR plus 3% and a $200 million term loan "B" with a spread of LIBOR plus 31/ 2%. Standard & Poor's rates the company B+. Abe Levine, cfo in Atlanta did not return calls.