U.S. West Secures $1.5 Billion Credit Facility with J.P. Morgan as Lead Arranger

Strategic Insights -

U.S. West, a leading telecommunications company, has entered into a significant credit facility agreement with J.P. Morgan as the lead arranger and bookrunner. The $1.5 billion facility, supported by a group of prominent banks, will serve as a crucial funding source for U.S. West's acquisition of Global Crossing Ltd. The agreement's details were recently filed with the Securities & Exchange Commission.

Key Takeaways:

  • The $1.5 billion credit facility is arranged by J.P. Morgan, with co-syndication agents BankAmerica, Chase Manhattan, and Citibank committing to $187.5 million each.
  • ABN AMRO, Bank of New York, Commerzbank, Bank One, and Mellon Bank have joined the agreement, committing $150 million each.
  • The facility's pricing is based on U.S. West's senior unsecured debt ratings, ranging from Libor plus 36.5 basis points for A1 and A-plus ratings to Libor plus 155 basis points for ratings below Baa3 and BBB-minus.
  • A facility fee of six basis points to 20 basis points will be charged on the committed amount.
  • The 364-day facility will be used to backstop the issuance of $1.5 billion of commercial paper, alongside proceeds from a $1 billion Rule 144A private offering of debt.
  • The funds will finance U.S. West's acquisition of Global Crossing Ltd., which was challenged by Qwest Communications International Inc. with a $55 billion hostile bid.

Statistics:

  • Facility size: $1.5 billion
  • Lead arranger: J.P. Morgan
  • Co-syndication agents: BankAmerica, Chase Manhattan, Citibank
  • Committed amount by each co-syndication bank: $187.5 million
  • Participating banks at the $150 million level: ABN AMRO, Bank of New York, Commerzbank, Bank One, Mellon Bank
  • Facility duration: 364 days
  • Maximum facility fee: 20 basis points

Sources:

  • Securities & Exchange Commission filing (exact date not provided)