Puerto Rico Telecom deal of 1.5 billion:
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Citigroup Units Lead $1.5 Billion Telecom Financing For GTE Consortium -- The Largest Telecommunication Syndication Ever Done for a Puerto Rico Headquarted Company
Business Wire - March 03, 1999 11:01
NEW YORK--(BUSINESS WIRE)--March 3, 1999--Citibank, N.A. and Salomon Smith Barney, Inc., both units of Citigroup, Inc., together with Bank of America, Morgan Guaranty and Chase Manhattan Bank, yesterday closed a $1.5 billion credit facility for a GTE-led consortium to purchase a nearly 51% stake in the San Juan-based Puerto Rico Telephone Company.
The transaction, syndicated to a group of local and international banks, was well received by the marketplace and oversubscribed, with GTE's relationship banks allocated within expected ranges. The deal, which creates a new holding company called Telecomunicaciones de Puerto Rico (TELPRI), follows the receipt of FCC approvals in February.
Salomon Smith Barney, Inc. served as Lead Arranger and Book Manager, with Citibank, N.A. acting as Administrative Agent on the transaction. Bank of America took on the Syndication Agent role, with Chase Manhattan Bank and Morgan Guaranty Trust Company in place as Co-Documentation Agents.
Citibank, N.A. underwrote this transaction last year and in January invited GTE's lead relationship banks into the transaction as co-arrangers and joint underwriters. The deal includes a $1 billion, 364-day bridge loan targeted for distribution to the capital markets in the second quarter of 1999, and a $500 million, five-year revolving credit facility currently priced at LIBOR + 125 basis points, all in, based on an expected investment grade rating. Drawn pricing is expected to drop to LIBOR +100 basis points, when the capital markets issuance replaces the 364-day facility. The financing is structured as non-recourse to GTE and to the Puerto Rico Telephone Authority.
The terms of this Citibank-originated deal were signed in July, 1998, and called for $2.009 billion to be paid to the Puerto Rico Telephone Authority in exchange for stock. It included a $444 million, all-cash payment by GTE and Popular, Inc., and a $1.6 billion, special dividend pay out to the Authority. Under the purchase agreement, the GTE-led consortium will own more than 50%, plus one share of the capital stock of TELPRI, the newly created holding company, whose primary operating subsidiaries will be Celulares Telefonica, and the Puerto Rico Telephone Company.
Citibank is the largest US bank operating in Puerto Rico with a history dating back to 1918. Citibank-Puerto Rico has been a major provider of financing to the island's telecommunications industry, having previously arranged sizable non-recourse deals for Centennial de Puerto Rico and Cellular One.
Citigroup, Inc. provides a broad array of financial products and services to 100 million consumer and corporate customers through its operations in 101 countries. Among its businesses are Citibank, Commercial Credit, Primerica Financial Services, Salomon Smith Barney, SSB Citi Asset Management, Travelers Life & Annuity and Travelers Property Casualty.
CONTACT: Citibank, N.A.
Press: Mary M. Regan
212/559-4225
or
GTE
Sharon Cohen-Hagar
972/507-5000
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