Bankers Offer $8B Alltel Loans and Bonds

NEW YORK (AP) -- Underwriters are bringing $8 billion of Alltel Corp.'s bonds and loans to the markets to help finance the company's leveraged buyout, representatives said Monday.

The $6 billion of bank loans are seen coming with a coupon of 2.75 percentage points over the London interbank offered rate at a discount of between 97 and 97.5 cents, presenters for the underwriters said at meeting in New York.

The $2 billion of bonds on offer are part of a cash-pay tranche worth up to $5.2 billion.

On Friday, underwriters Citigroup, Goldman Sachs, Barclays and RBS unveiled Alltel's offering of an unspecified amount of eight-year senior unsecured notes, according to a market participant.

A day earlier, Alltel said it intended to offer up to $5.2 billion in traditional notes plus up to $2.5 billion in pay-in-kind toggle notes, a risky structure that gives the issuer the option to pay interest in additional debt rather than in cash. The bankers said at this time they aren't planning to sell the riskier PIK toggle notes.

The offerings will fund a buyout of Alltel by TPG Capital and GS Capital Partners, the private-equity arm of Goldman Sachs Group Inc., for about $27 billion, including nearly $3 billion in debt.