QVC Network Inc.'s bank group, led by Chemical Bank, committed a total of $6 billion to help finance the company's $9.9 billion bid for Paramount Communications
QVC only needed to raise $3 billion from the banks to cover the cash portion of-its bid.
As a result, the six banks that committed $1 billion apiece saw their underwriting exposure cut back immediately to $500 million each.
The size of the initial commitments - and the speed with which they were delivered - underscores the depth of liquidity in the bank loan market right now for acquisition loans, even for borrowers who, like QVC, are below investment grade.
QVC has an implied senior debt rating of BB-plus from Standard & Poor's Corp.
Joining Chemical in the credit were Bank of Nova Scotia, Barclays Bank of Britain, Long-Term Credit Bank of Japan, NationsBank, and Toronto-Dominion Bank.
Pricing and other terms of the credit could not be learned.
As reported, Chemical was awarded the mandate to lead the QVC credit last week. On Wednesday, Chemical met with the five other banks to discuss the terms and structure of the deal.
Pricing Adjusted Upward
After adjusting the initial pricing upward, all five of those banks signed on to the deal.
The bidding contest for Paramount between QVC and Viacom Inc. has also split the big media-lending banks into two opposing camps, at least for now.
Ultimately, there is likely to be at least some crossover when the winning bidder emerges from the takeover battle.
Viacom Banks Seek Allies
In the Viacom camp, Bank of New York, Citibank, and Morgan Guaranty Trust Co. were looking for allies last week to assume some of their underwriting exposure.
Each of the three lead Viacom banks committed $500 million.
As of Friday afternoon, Viacom wasn't commenting on whether any other banks had lined up on its side.