Morgan Stanley's US$2.5 billion CF loan is biggest lender commitment: data

The financing is second only to the US$3.2 billion arranged by six banks including Morgan Stanley to back Warner Chilcott Plc's acquisition of Procter & Gamble Co.'s prescription-drug unit, according to data compiled by Standard & Poor's Leveraged Commentary and Data and Bloomberg. The CF deal would help Morgan Stanley, ranked 19th in U.S. leveraged lending this year, gain ground on Bank of America Corp. and JPMorgan Chase & Co.

“The bankers are convinced this will be an outstanding combination with a lot of potential going forward,” said Stephen Wilson, chief executive officer of Deerfield, Illinois- based CF, in an interview Monday. He said the combined company would be rated “near investment grade.”

The collapse of leveraged lending markets in 2007 left investment banks including Morgan Stanley stuck with billions of dollars of loans to speculative-grade companies, restricting their appetite to back new takeovers. Leveraged buyouts of more than US$2 billion all but disappeared as lending to high-yield, high-risk borrowers, rated below Baa3 by Moody's Investors Service and less than BBB- by S&P, dropped 89 percent to US$90.9 billion in 2009 from a record two years ago.

CF boosted its takeover bid for Terra Sunday to about US$4.05 billion and announced the US$2.5 billion of financing from Morgan Stanley. Terra rose the most in almost eight months in New York trading Monday, to as high as US$34.77.

Subscribe to The China Post and save 25%. Click here

SharePrintEmail

Write a Comment

Enter your comments - 3000 characters max

Type in image code

Submit

 Receive China Post promos Respond to this email