Syndications of two communications loans - a $450 million loan to Chancellor Broadcasting Corp. and a $900 million loan for American Radio Systems - have been completed.
Commitments to the Chancellor deal, which closed on schedule last Friday, totaled in excess of $1 billion, said a source close to the transaction.
Excluding $400 million from the three agent banks, commitments for the $350 million term loan and revolver portion totaled between $700 million and $800 million, the source said. A $100 million institutional tranche of the credit received commitments in excess of $200 million.
The Chancellor syndication, priced at 250 basis points over the London interbank offered rate, was led by administrative agent Bankers Trust with syndication agent NationsBank and documentation agent Goldman Sachs.
The loan backs Dallas-based Chancellor's acquisition of radio station groups from Colfax Communications and OmniAmerica Corp.
The leverage ratio acceptable to the market for communications deals has been steadily growing, said the source, to the point where Chancellor's debt-to-cash flow ratio of 7 did not prevent the credit from oversubscribing.
Banks committing at the $35 million co-agent level included Union Bank of California, Bank of Boston, Chase Manhattan, Societe Generale, and Banque Paribas, said the source.
The $900 million transaction for American Radio, led by administrative agent Bank of New York and launched at the same time, proved to be a harder sell.
The deal for the Boston-based network was also oversubscribed, with commitments in excess of $1 billion.
Chase Manhattan and Toronto-Dominion Bank acted as syndication agents. Fleet Bank, Bank of Montreal, Union Bank of California, and Credit Suisse all committed at the $75 million agent level.
However, the syndication, which had been scheduled to close Dec. 23, was held open to "let a few stragglers come in," said a source familiar with the American Radio deal.
The credit, backing American Radio's acquisition of EZ Communications Inc., was criticized by market sources earlier this month.
Complaints focused on the syndication's pricing, which critics called aggressive at 50 basis points lower than that of the Chancellor deal, and its "loose" structure.
The smaller, more attractively priced Chancellor deal competed for the banks' attention, said market sources.
