The imminent merger between Deutsche Telekom and VoiceStream Wireless has traders viewing their bank debt as one credit, so news on one is affecting the other. Early last week a $10 million piece of VoiceStream's paper traded at 99 3/4, which is down slightly for the name. Traders attributed the move to a ratings downgrade of DeutscheTelekom. "There's some selling pressure on the Deutsche Telekom downgrade and refinancing concerns," a trader noted. Mobile phone operator VoiceStream is based in Bellevue, Wash. Calls to a company spokeswoman were not returned.
Dealers say despite any downgrade for Deutsche Telekom, the merger is still optimistically viewed. "VoiceStream's price has more to do with the facility getting redone in connection with the merger," a dealer said.
VoiceStream has a $3.25 billion deal which breaks down into three tranches and is priced at LIBOR plus 2 3/4 %.