The latest developments in the U.S. leveraged loan market bode well for the proposed $35-billion BCE buyout. Shares in buyout target Clear Channel are up Tuesday after the syndicate of banks agreed to binding arbitration over loans they have promised to the private equity firms behind the $19.4-billion (U.S.) deal. The controversy around Clear Channel, which is being taken over by Thomas H. Lee and Bain Capital, has weighed heavy on BCE because the two buyouts share several lenders: Citigroup, Deutsche Bank and Royal Bank of Scotland. In the letter to the buyout funds, lawyers for the lenders state: "The banks remain willing to fund the Clear Channel acquisition." In a note to clients Tuesday, National Bank Financial analyst Greg MacDonald said resolving some of the uncertainty around the Clear Channel purchase has "a positive implication" for BCE, and he added that this should lessen the risk that the Canadian telecom buyout doesn't close. BCE shares are changing hands Tuesday at $38.20 (Canadian), up 27 cents, on the TSX. As the controversy around Clear Channel blew up over the past two months, BCE traded down to below $35. A consortium led by the Ontario Teachers Pension Plan struck a $42.75-a-share buyout of BCE in late June, and that deal is expected to close in May.
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