Citigroup is running out of time to arrange a syndicate for its $350 million credit facility for White Plains, N.Y.-based Metromedia Fiber Network, according to bankers familiar with the deal. Citigroup has less than two weeks before its letter of commitment expires and it is left carrying the entire loan. "Citigroup is on the hook for the whole thing. They've been unable to find any other banks to come in on it," one banker said. Citigroup has been working to arrange the syndicate since January. A loan syndication official at Citigroup declined to comment.
"Let's face it, leveraged telco is a dirty word. Unless they offer some kind of significant pricing, no other banks are going to go in on it," an analyst said. The capital will allow Metromedia to become fully funded. About a month ago, Citigroup extended the letter of commitment until June 30. Analysts contend that Citigroup is having trouble finding partners because investment banks have come under intense pressure to scrutinize their loans to telecommunications companies. "I just don't know what banks are going to give Metromedia that kind of incremental funding," said one analyst.
The credit facility is split into a $150 million revolver and a $200 million term loan, both of which would mature in seven years. The two tranches were priced at LIBOR plus 2¾% and LIBOR plus 3%.