Banks financing the BCE deal are now seeking to renegotiate the terms of their agreement, according to The NY Times. Gee, who could have seen that coming?
This could prove a very different situation than what we saw in the case of Clear Channel, although the lenders’ professional vacancy remains intact. First, there is now a bit of precedent thanks to CCU. Second, BCE can’t file suit in Texas (I don’t think), which means that the banks needn’t lose sleep over the possibility of a multi-billion dollar punitive punishment.
Finally, one of the BCE buyers is in a far different situation than was either of CCU’s buyers. That would be Madison Dearborn Capital Partners, which is having a heck of a time raising its $10 billion-targeted new fund. The BCE money is allocated from an existing vehicle, but bailing on the deal might help sway a number of limited partners who have expressed significant reservations about re-upping. MDCP has indicated strong interest in closing BCE, but it may not fight the strong fight if enough LPs propose a quid pro quo.