Citibank successfully syndicated two new credit lines for Philip Morris Cos. and its finance subsidiary, amounting to $14 billion.
More than 100 banks committed a total of more than $17 billion, or $3 billion more than was needed, market sources said. The deadline for commitments was Wednesday evening.
As reported, the Citicorp unit was sole agent on a $12 billion credit line for the parent company, and coagent on a separate $2 billion credit for Philip Morris Capital Corp.
Bank of New York and Dresdner Bank were also coagents on the smaller credit line.
It couldn't be learned how much was committed to each line, but the $12 billion credit was said to have been oversubscribed by a greater amount than the $2 billion line.
Option to Increase Line
As a result of the oversubscription, Philip Morris has the option of increasing the $12 billion line to $15 billion, though the company has not yet decided whether it will do so, sources said.
A Philip Morris spokesman declined to comment.
The new credit for the parent company replaces an existing $15 billion facility that was set to expire in 1996.
Philip Morris is replacing the credit line in order to take advantage of a drop in loan pricing.
The $2 billion credit for Philip Morris Capital consolidates and enlarges three existing credit lines totaling about $1 billion.
Philip Morris traditionally has commanded a strong following and favorable treatment in the loan market, and that continued to be the case with the new credit lines.
Despite the well-publicized difficulties facing the cigarette industry, bankers said they are comfortable with the prospects of the giant food and tobacco company.Syndication Results Borrower Philip Morris Cos. Amountto be raised $14 billion(*) Total Over $17 billioncommitments Lead bank Citibank (*) Includes a $2 billion line of PhilipMorris Capital Corp.