Citi, BankAmerica, Chase, J.P. Morgan Plan $10B Credit for MCI-British

Citicorp NA, Bank of America Corp., Chase Securities Inc., and J.P. Morgan Securities Inc. are arranging a $10 billion credit facility for Concert, the company to be formed by the merger of British Telecommunications PLC and MCI Communications.

Citibank will act as global coordinator.

The new facility replaces the two partners' current ones and will be used to back Concert's commercial paper issuance, in connection with post- merger activities and various announced strategic initiatives, according to a statement from the two companies.

"The Concert financing is a global financing, in that we are inviting the relationship banks" for British Telecom and MCI into the deal, said Steven R. Victorin, managing director for U.S. investment grade finance, Citicorp Securities Inc. The group will include both U.S.-based and European-based banks.

London-based British Telecom and Washington-based MCI on Nov. 3 announced a merger agreement to create Concert. According to the two companies, Concert will be the world's first global communications company, with revenue of $43 billion. British Telecom and MCI expect to complete the merger by fall of this year. Bank meetings will be held in New York on June 13, and in London on June 18, said Mr. Victorin. Commitments are expected by the end of the month, and the credit is scheduled to close in mid-July.

The $10 billion syndicated credit will include a $5 billion, 364-day facility, a $2.5 billion, five-year facility, and a $2.5 billion line of credit.

Pricing on the 364-day facility is the London interbank offered rate plus 2.5 basis points, undrawn, and Libor plus 10 basis points, drawn. Pricing on the five-year facility is Libor plus 4.5 basis points, undrawn and Libor plus 10 basis points, drawn.

The 364-day and five-year facilities each have a utilization fee of 2.5 basis points when outstandings are in excess of 50% of commitments.

"It is expected that the facility will be reduced substantially over the following year," as the company completes its post-merger-related activities, said Mr. Victorin.

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