Magazine article American Banker

RJR Nabisco Bank Credit Gets a Warm Reception

Magazine article American Banker

RJR Nabisco Bank Credit Gets a Warm Reception

Article excerpt

RJR Nabisco Bank Credit Gets a Warm Reception

Marketing a $6.5 billion bank credit for RJR Nabisco Holdings Corp. should be a cakewalk for the giant food and tobacco company's five lead banks.

In an early and critical test of the credit's appeal, all but one of 16 other lenders accepted invitations by the lead banks to join the underwriting group as so-called managing agents.

Each of the 16 banks was asked to commit $250 million, or a total of $4 billion. The five lead banks committed $500 million apiece, or $2.5 billion in all.

The lead banks are units of Manufacturers Hanover Corp., Bankers Trust New York Corp., Citicorp, Chase Manhattan Corp., and Fuji Bank of Japan.

Waiting in the Wings

On Friday, there were several potential substitutes for the one bank that declined the managing agent slot, sources said.

The response represents a "powerful statement" about the credit's appeal, said one banker associated with the deal. Others agreed that the credit appears likely to win broad support.

A bank meeting for prospective members of the general syndicate was held Thursday in New York, at which the terms of the deal were officially unveiled to the broad market. Officials from about 100 banks attended.

Yield Disappoints Some

Some yield-conscious bankers were disappointed with the pricing of the new RJR revolving credit line, which will be used mainly to refinance about $5.2 billion outstanding under the company's two existing term loan agreements. …

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