Strong demand prompts Qwest to add $500 million fixed rate tranche

By Paul A. Harris

St. Louis, June 2 - With its $1 billion four-year senior term loan oversubscribed in excess of three times, Qwest Corp. appears set to add a $500 million seven-year fixed rate tranche to its new financing, according to a syndicate source.

The transaction is expected to close by the end of this week, the source added.

Merrill Lynch, Credit Suisse First Boston and Deutsche Bank are lead banks on the Denver telecommunications company's new credit facility.

Proceeds will be used to refinance debt due in 2003 and to fund business needs.

A bank meeting was scheduled for Monday on the $1 billion four-year senior term loan (Ba3), which had talked at Libor plus 450 to 500 basis points. Pricing on the newly-announced seven-year fixed rate tranche was not available, according to the syndicate source.

Qwest Corp.'s parent Qwest Communications International Inc. announced Monday its subsidiary was considering increasing the size of the previously announced term loan to $1.5 billion from $1 billion due to strong demand.

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