From www.loanradar.co.uk Imperial Tobacco approaches close We hear that senior syndication of the debt facilities for Imperial Tobacco, backing the proposed acquisition of Franco-Spanish tobacco company Altadis, is approaching close. Though there are market rumours that the deal has not met with a good response in the market, sources say the deal has picked up a reasonable level of support from sub-underwriters. One source said that sub-underwriters on the facility would have known they were likely to have holds close to their initial commitments because the debt did not go out to a very large of banks. A general syndication phase is likely after the acquisition process is complete. MLAs and books are Banco Santander, Barclays, Citi, Lehman Brothers and RBS. The deal is split into a number of tranches: TLA: GBP2.365bn, 364 days TLB: GBP2.027bn, three years TLC: GBP405m, five years RCF: USD2bn, three years RCF: GBP650m, three years RCF: EUR4bn, five years Bridge: EUR7.348bn, 364 days In addition to the bank financing, the acquisition will be funded through a rights issue. ABN AMRO, Citi, Lehman Brothers and Morgan Stanley are providing a GBP5.4bn equity bridge and are underwriting the rights issue. Imperial Tobacco approaches close We hear that senior syndication of the debt facilities for Imperial Tobacco, backing the proposed acquisition of Franco-Spanish tobacco company Altadis, is approaching close. Though there are market rumours that the deal has not met with a good response in the market, sources say the deal has picked up a reasonable level of support from sub-underwriters. One source said that sub-underwriters on the facility would have known they were likely to have holds close to their initial commitments because the debt did not go out to a very large of banks. A general syndication phase is likely after the acquisition process is complete. MLAs and books are Banco Santander, Barclays, Citi, Lehman Brothers and RBS. The deal is split into a number of tranches: TLA: GBP2.365bn, 364 days TLB: GBP2.027bn, three years TLC: GBP405m, five years RCF: USD2bn, three years RCF: GBP650m, three years RCF: EUR4bn, five years Bridge: EUR7.348bn, 364 days In addition to the bank financing, the acquisition will be funded through a rights issue. ABN AMRO, Citi, Lehman Brothers and Morgan Stanley are providing a GBP5.4bn equity bridge and are underwriting the rights issue. The rights issue will be launched within 12 months, according to Imperial Tobacco, which will be "sized at the minimum amount needed to ensure that the enlarged group continues to have an investment grade credit rating". In response to Imperial's announcement, Moody's has placed the company's ratings on review for downgrade. Moody's said that its review "reflects that some elements of the transaction have to be determined, in particular the size of the equity issue and the future shareholding in Logista [Altadis' logistics arm]". The agency added that it "takes comfort" from the continued strong commitment expressed by the management to maintain an investment grade rating, "specifically that the rights issue will be sized to maintain the rating". The company also plans to sell non-core assets to a value of EUR650m. The debt facility will pay for the acquisition, associated fees and expenses, as well as to refinance debts of both Imperial Tobacco and Altadis. Imperial Tobacco has said that after the completion of the acquisition, it does not expect its present all-in cost of debt, around 5.4%, to change. The acquisition will consolidate Imperial's position as fourth-largest tobacco company in the world. The EUR50 a share offer has been accepted by the board of Altadis, which has been considering an approach from CVC Capital Partners, which has also offered EUR50 a share for the Franco-Spanish company. The Imperial bid puts an enterprise value on Altadis at EUR16.2bn and 14.2x Ebitda.