Chemical credit gets boost from General Electric.

Chemical Credit Gets Boost from General Electric

Chemical Bank succeeded in syndicating a $450 million buyout loan - thanks in part to General Electric Capital Corp., which kicked in a $100 million commitment, banking sources said.

The credit, underwritten by the Chemical Banking Corp. unit, will help finance the acquisition of Six Flags Corp. by a joint venture of Time Warner Inc., Blackstone Group, and Wertheim Schroder for about $700 million.

"Everyone was surprised" by the size of the GE Capital commitment, said one banker. The credit initially was supposed to be syndicated on a "club" basis, he noted, with about 15 banks committing $30 million apiece.

Tight Lid on Details

It was unclear whether Chemical cut any sort of deal with GE Capital to obtain the larger commitment.

A spokesman for GE Capital, a unit of General Electric Co., neither confirmed nor denied the commitment, saying the company doesn't comment on customer relationships.

A Chemical spokeswoman had no comment on GE Capital. But she said that the credit was "substantially oversubscribed" as of Thursday afternoon. That would suggest that the commitment from GE Capital was not needed to put Chemical over the top in syndicating the loan.

The official deadline for commitments was at the close of business Thursday.

Not Treated as an HLT

The seven-year credit is priced at 250 basis points over the London interbank offered rate.

Bankers said that pricing represents an attractive rate for a credit that is not designated a highly leveraged transaction.

As agent bank, it's up to Chemical to determine whether or not the credit is an HLT. Most potential syndicate members seemed to accept Chemical's view, but at least one bank wasn't so sure.

Federal bank regulators can overrule Chemical.

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