VoiceStream's "A" tranche may be feeling the squeeze under the weight of the $4 billion Deutsche Telekom invested in it, pushing down debt and the level on the pricing grid, dealers said. Last week $5 million of the "A" tranche traded at 973/4, and dealers noted that price is off about 11/4 from two months ago. Calls to the Bellevue, Wash.-based company were not returned. One dealer said a lack of buyers for telecom paper may be the cause, but a drop on the pricing grid would not help. "The A's are under pressure. The new money from Deutsche lowers the debt-to-cash flow. Prices are done on a grid for the "A" and are based on debt versus cash flow. By getting more money in, the debt level lowers," he said. Late last year VoiceStream's levels slid to 981/2 from 991/4 down from near par (LMW, 12/25). Dealers cited skepticism over the Deutsche Telekom deal, sparked in large part over that company's falling stocks. The $3.25 billion Voicestream facility breaks down into a $1.35 billion revolver, and a $900 million term loan "A" a $1 billion term loan "B." Goldman Sachs leads the deal. A bank spokesman did not return calls seeking comment.
VoiceStream Wireless ‘A’ Paper Feels Weight of More Money