BCE LBO financing to include up to C$23.05 billion credit facility, up to C$11.3 billion bonds

By Sara Rosenberg

New York, Aug. 14 - BCE Inc. detailed its leveraged buyout financing package, including plans for an up to C$23.05 billion credit facility and the issuance of up to C$11.3 billion of high-yield notes, according to a 6-K filed with the Securities and Exchange Commission Tuesday.

Citigroup, Deutsche Bank, RBS Securities and TD Securities are the lead banks on the financing.

The credit facility consists of a C$2 billion six-year revolver, a C$4.2 billion six-year term loan A, a C$16.5 billion seven-year term loan B and a C$350 million one-year delayed-draw term loan.

The term loan B and the delayed-draw term loan will be denominated in the U.S. dollar equivalent at the prevailing Canadian and U.S. dollar exchange rate, but not to exceed $16.5 billion on the B loan and $350 million on the delayed draw.

The bond offering is comprised of a C$7.5 billion senior notes tranche and a C$3.8 billion senior subordinated notes tranche.

Both bond tranches will be denominated in the U.S. dollar equivalent at the prevailing Canadian and U.S. dollar exchange rate, but not to exceed $7.5 billion on the senior notes and $3.8 billion on the subordinated notes.

Backing the bonds is a C$7.5 billion senior unsecured bridge loan commitment and a C$3.8 billion senior subordinated unsecured bridge loan commitment.

Other LBO financing will come from a C$7.75 billion equity commitment.

BCE is being acquired by Teachers Private Capital, Providence Equity Partners Inc. and Madison Dearborn Partners, LLC.

Under the terms of the transaction, the investor group will acquire all of the common shares of BCE not already owned by Teachers Private Capital for an offer price of C$42.75 per common share and all preferred shares at various prices ranging from C$25.25 to C$25.87.

The all-cash deal is valued at C$51.7 billion, or around $48.5 billion, including C$16.9 billion of debt, preferred equity and minority interests.

The acquisition is anticipated to be completed in the first quarter of next year and it will be done through a plan of arrangement, which will require the approval of two-thirds of outstanding common and preferred shares, voting as a class.

In connection with the deal, BCE, Bell Canada and Bell Mobility are expected to redeem outstanding redeemable debentures maturing up to August 2010.

BCE is a Montreal-based communications company.

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