$6.5 Billion Credit Facility Allocated for The Seagram Co.

Strategic Insights -

The Seagram Co. has secured a $6.5 billion credit facility from a group of lenders, led by Chase Manhattan, Citibank, BankAmerica, and Bank of Montreal. The deal was well over-subscribed, with lenders initially seeing their allocations scaled back. Managing agents ABN AMRO and others were scaled back to zero, while other lenders such as Commerzbank and Royal Bank of Canada received allocations of $210 million and $150 million, respectively.

Key Takeaways:

  • The credit facility is a 364-day revolving credit, priced at a facility fee of seven basis points and an all-in margin of Libor plus 30 basis points.
  • The deal was led by Chase Manhattan, Citibank, BankAmerica, and Bank of Montreal, which initially committed $650 million but had their allocations scaled back to $400 million.
  • Managing agents ABN AMRO, Banque Nationale de Paris, and others were scaled back to zero from their initial commitments of $400 million.
  • Commerzbank, Lloyds Bank, and Mellon Bank were allocated $210 million each, down from their initial commitments of $250 million.
  • Other lenders, including National Westminster and Sumitomo Bank, received allocations of $150 million each.
  • The credit facility has a facility fee of seven basis points and an all-in margin of Libor plus 30 basis points.
  • The deal is based on Seagram's current rating of A2 from Moody's Investor Services and A from Standard & Poor's Ratings Group.
  • The deal was well over-subscribed, with lenders initially seeing their allocations scaled back.

Statistics:

  • $6.5 billion: The total credit facility allocated for The Seagram Co.
  • 364 days: The revolving credit facility's term.
  • 7 basis points: The facility fee
  • Libor plus 30 basis points: The all-in margin

Sources:

  • BLR (no date)