Chase Manhattan Corp. continues to land high profile investment banking assignments.
The commercial banking giant's growing investment banking arm, Chase Securities Inc., advised Food Lion Inc. in the supermarket chain's $341 million merger agreement with Kash N' Karry Food Stores Inc., which was announced last week. The assignment helped the bank to land the leading position in a $700 million loan to refinance debt and back the acquisition.
The unit also won the mandate to advise Bethlehem Steel Corp. in the divestiture of its Bethship Inc. unit's Baltimore shipyard.
The Food Lion advisory assignment, won through strategic relationships with the largest shareholder of each supermarket chain, gives Chase's growing team some visibility in a rapidly consolidating sector.
"Chase can provide debt restructuring as a merchant banker, and can provide advisory work," said Johnathan Ziegler, a supermarket analyst at Salomon Brothers Inc. "That puts them in a strong position."
Mr. Ziegler called supermarket consolidation "overdue," and noted that the pace has picked up in the last year. Indeed, just last week, Safeway Inc. announced its intention to purchase Vons for $1.75 billion in stock.
Chase, which has the biggest loan syndication shop in the country, did not have a bank credit relationship with Food Lion prior to the deal.
The New York bank connected with the supermarket chain last year through its relationship with Del Haize, the largest shareholder in the company. Chase advised the Belgian investment firm in another transaction several years ago.
Chase plans to syndicate the loan in the next few weeks. The loan will refinance a $300 million loan Wachovia Corp. had arranged for Food Lion.
The divestiture by Bethlehem Steel is part of a major restructuring. The Pennsylvania steelmaker is divesting three other units, with Salomon Brothers advising.