In the case of syndicating the loans for the LBO of Clear Channel Communications Inc., the Financial Times is
reporting that:
Citigroup, Deutsche Bank and a consortium of banks that funded the
$17.9 billion LBO held a meeting to begin marketing about $3 billion in
loans to investors. A person familiar with the deal said that they
offered the debt at 90-91 cents on the dollar. The loan package totals
$14 billion, but the banks are expected to sell the remainder piecemeal so as
not to flood the market.
The other banks providing debt financing include Morgan Stanley,
Credit Suisse Group, Royal Bank of Scotland Group plc and Wachovia Corp. All of the banks
have already taken write-downs on the loan's value.
The Clear Channel deal has been nothing but headaches for the banks
that agreed to finance the take-private of the San Antonio radio and
advertising company by Thomas H. Lee Partners LP and Bain Capital LLC
way back in November 2006 when the credit markets were going strong. The soap
opera of a deal has involved much back and forth among the banks,
sponsors and the company involving litigation in two states, public
excoriation and plenty of lawyer's fees. A final agreement, reached May
13 to end litigation in New York and Texas, allowed the sponsors to buy
the company at $36 per share, a $1.6 billion price cut from the
original $25 billion enterprise value, or $39.20 per share.
Next up for the leveraged debt syndication market will likely be the
$50.9
billion buyout of Canadian telecom BCE Inc. by Teachers' Private
Capital, Providence Equity Partners Inc., Madison Dearborn Partners LLC
and Merrill Lynch Global Private Equity. The deal is being held
up in the Canadian courts over a dispute between the buyers and BCE's
bondholders, who are arguing that the transaction, which is the
largest North American buyout to date, treats them unfairly. Canada's
Supreme Court heard BCE's appeal on Tuesday but did not say
when it might rule. -
George WhiteSee Financial Times storySee TheDeal.com story on BCE
Banks may have whittled down the leveraged debt overhang, but they're still having to offer sizable discounts to entice buyers to take the rest off their books. 
