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QwestDex's first-leg financing to be up to $1 billion junk bonds, $1.33 to $1.5 billion loans
By Paul A. Harris
St. Louis, Mo., Aug. 26 - The $2.33 billion of debt financing for the first leg of the leveraged buyout of QwestDex will be include up to $1 billion of new junk bonds and a credit facility in the range of $1.33-$1.5 billion, according to sources familiar with the financing.
Presently, one source said, talk has the credit facility split 50-50 between a term loan and a revolver.
The bond deal could come to market in mid-October, according to an informed source.
The transaction, the first part of the $7.05 billion LBO of Qwest Communications International Inc.'s directories business by Carlyle Group and Welch, Carson, Anderson & Stowe, is slated to close in the next 60-90 days according to Amy Kuark, of the Qwest treasurer's office.
Banc of America Securities, Deutsche Banc Securities, JP Morgan, Lehman Brothers, Wachovia Securities are the underwriters.
One source told Prospect News Monday that the sizes and timing of the financing's components are subject to review pending near term conditions in the capital markets.
"The bond deal hasn't been rated yet," the source said. "And nobody really knows how the markets are going to look after Labor Day. If Labor Day comes and goes and the bank loan market is red hot and the bond market is not, the loan will skew bigger."
The first stage of the financing involves the sale of QwestDex yellow pages operations in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. The second stage, which requires clearance on the part of state-level regulators, according to Qwest's Amy Kuark, is expected to be at least six months in the future.
Qwest Communications is a provider of voice, video and data services, headquartered in Denver, Colo.
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