Bankers said last week that Deutsche Bank may only raise between $50 million and $100 million for FairPoint Communications compared to the original $150 million add-on deal the bank originally had planned. Sources said the bank has not been able to raise enough interest in the deal or commitments to come up with an additional $75 million for tranches "B" and "C" of the company's existing credit. Tim Henry, v.p. of finance and treasurer, said, "The jury's still out," when asked about the fate of Deutsche Bank's best efforts deal for the company. "We have had a fair amount of interest and there is still interest in the credit," said Henry, in response to rumors in the market two weeks ago that the deal may be pulled entirely, as was Credit Suisse First Boston's deal for Nextel Partners.
Henry said the company will not restructure the deal or increase pricing to capture more investor appetite in the credit. "We flexed up pricing once and we don't intend to go beyond what we have already put on the table," he said. Henry explained that the company was hoping to make an incremental increase to its "B" and "C" tranches as a way of securing financing for potential future acquisitions. However, he noted, nothing is on the acquisition horizon. "The company is more than adequately liquid; it's not necessary to make an incremental increase to the B and C," he said. Henry said there are commitments in on the deal, but he would not disclose the banks or amounts. Deutsche Bank is the sole arranger.