Making its debut as a high-yield bond manager, First Union Capital Markets is expected to wrap up its first road show today and unveil a $100 million deal shortly.
The Charlotte, N.C.-based bank and CIBC Wood Gundy are expected to bring $100 million in high-yield bonds to market for Willis Stein & Partners' leveraged buyout of Petersen Publishing.
Although First Union has co-managed several high-yield deals since receiving approval from the Federal Reserve last year to engage in this market, this deal marks the first time it has snared the coveted lead manager role.
Large banks see underwriting high-yield bonds as a complement to their leveraged lending businesses. Indeed, First Union and CIBC closed syndication Monday night on a $260 million bank loan that supported the purchase. The high-yield bonds replace a $100 million bridge loan that both banks had underwritten.
Bankers familiar with First Union said the Willis Stein deal is a prototypical high-yield deal.
First Union's specialized media and telecommunications expertise and its previous work with Willis Stein gave it an inside track in landing the financing.
Jay Braden, a managing director at First Union, heads the team of five high-yield originators. He joined the bank this spring from Smith Barney, where he had previously served as director of the leveraged transaction group.
The capital markets team acted as co-manager on several earlier issues, including a $200 million public high-yield offering for FrontierVision, a $100 million private placement for ShopVac Corp., and a $125 million private placement for Rifkin Acquisition Partners.