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"Market Conditions" Is Back; Energy Transfer Cancels $1.75 Billion Note Offering One Day After Launch
Damn, those windows of opportunity sure are brief: it seems syndicators now think the high frequency trading mentality has taken over the primary market. Less than 24 hours after launching a $1.75 billion unsecured note offering, Energy Transfer Equity pulled the very same refinancing attempt.
Energy Transfer Equity, L.P. announced that
due to market conditions over the past several days, ETE has opted to
not move forward with the contemplated debt offering at this time.
Uh... last time we checked, that 3% fee for HY bond underwriting had to be earned, even if that included a little more than 24 hours of work. Or at least lead underwriters Credit Suisse, Morgan Stanley, Wells Fargo, Bank of Countrywide Lynch and UBS, and co-managers BNP, Deustche and Suntrust (damn, did they just accidenatly forget to add the kitchen sink to that group - $1.75 billion and they need 8 managers - crikey) can pretend they know at least one account who doesn't back out of an offering after a so-called hiccup in the market. Alternatively, Zero Hedge Capital Markets, Inc. is happy to undercut all eight (yes, eight) members of the underwriting syndicate and place the offering at one tenth the proposed underwriting fee, and will even provide a highly confident letter (that has the simple contingency that the placement be done only if the equity market has had twenty successive 1%+ up days and not a single downtick in the past 24 hours). If ETE management finds our terms attractive, they know how to reach us.
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well, the prospectus did say "subject to market conditions"
Gee...I wonder if they know something?
Someone always does.
+1
If the firm's name doesn't inspire confidence, perhps the lead underwriting team will: Schizophrenic Tyler and Kleptomaniac Marla
ETE is the publicly-held GP for Energy Tranfer Partners (ETP). Interesting that a strong BB name can't / won't raise money given all the crap that has come to market over the past 6 months. No refinancing pressures. I find it hard to believe the deal was pulled due to lack of sufficient interest. New issue premium was too much so management said thanks, but no thanks.
I love it. You can't make this shit up. Between the antics of our favorite psychopath Chavez and the antics on the street and DC I've had quite a few chuckles of late. Too
funny. I bet the covenants were not strong enough
for the more discriminating HY crowd. Plus easy money
has been made back to reality. Strong double BB is no
man's land if they are not leaping to BBB any time soon
It's a partnership structure. Hex
Investment-grade covenant package with change of control put. Similar to most cross-over credits. I'm betting the deal was not pulled over covenants.
I didn't read prospectus. Don't even know the co
story. I just don't think structures are high on
any ones hit parade. Simple bullet structures. Again
BB no man's land unless the purchaser expects upgrade.
Not cheap enough for true junk guys and not eligible
for investment grade portfolio. Where is your buying
audience? Most likely pulled because the market did not agree with the pricing that co felt it was worth and noone is using their balance sheet right now. The story was
probably not worth the aggrevation and priced too
aggressive anchor orders were in back of the talk.
Company walks no hard feelings. Was it five BB's? or
single rated?