Reuters Summit-UPDATE 1-TD Bank committed to financing BCE

Wed Nov 12, 2008 6:03pm EST

(For other news from the Reuters Global Finance Summit, click here)

(Adds quote in paragraphs 5-7, information from source in paragraph 8, background to deal and market in paragraphs 9-end, byline)

By Megan Davies

NEW YORK, Nov 12 (Reuters) - Toronto-Dominion Bank (TD.TO) Chief Executive Ed Clark said on Wednesday he remained committed to financing the massive leveraged buyout of BCE Inc (BCE.TO), Canada's biggest telecommunications company.

TD Securities, a unit of TD Bank, is among the banks that have agreed to finance the deal alongside Citigroup (C.N), Deutsche Bank (DBKGn.DE) and Royal Bank of Scotland (RBS.L).

There have been concerns about the C$34.8 billion deal closing amid the turbulence in the financing markets. BCE shares are significantly below the deal price of C$42.75 a share and closed down 60 Canadian cents at C$37.30.

Clark, speaking at the Reuters Global Finance Summit in New York, said TD Bank continues to support the transaction and said, "I'm confident that we'll be there with our money" at the close.

"We're...old fashioned," he said. "When we say 'We're going to do a deal,' we say, 'We'll do a deal.' You can't say, 'Well it was a good idea at the time, but I don't like it anymore'."

But he said it was unlikely the debt would be syndicated before the deal's close, adding it is tough to syndicate in these markets.

Clark said he did not see the deal as a "serious credit risk". If the bank has to hold BCE debt until it matures, it will, because it offers a high yield and the credit risk is low, he added.

Separately, a source familiar with the situation said on Wednesday the deal was on target to close as scheduled but it was unlikely the debt would be syndicated before closing, due to the market conditions.

BCE, which is being bought by a consortium that includes the Ontario Teachers' Pension Plan, private equity firms Providence, Madison Dearborn Partners and a private-equity arm of Merrill Lynch & Co Inc MER.N, said in July that buyers had finalized funding and it expected the deal to close by Dec. 11.

Providence told its investors early in October that it expected the deal to close and that the BCE business was performing well, a source familiar with the matter told Reuters in October. The comments were made during a presentation to the investors in its funds, known as "limited partners," the source said at the time.

For BCE, worries follow other private equity deal failures, including the proposed takeovers of audio equipment maker Harman International Industries Inc (HAR.N), equipment renter United Rentals Inc (URI.N) and student lender Sallie Mae, formally known as SLM Corp SLM.N.

Another deal, the proposed $6.5 billion buyout of chemicals firm Huntsman Corp (HUN.N) by Apollo Management LP's Hexion Specialty Chemicals unit, is currently in litigation and one of the points being argued about is the financing of the deal.

(For summit blog: summitnotebook.reuters.com/)) (For more on the Reuters Global Finance Summit, see [ID:nN10403323]) (Additional reporting by Lynne Olver; editing by John Wallace) ((megan.davies@thomsonreuters.com; +1 646 223 6112; Reuters Messaging: megan.davies.thomsonreuters.com@reuters.net))

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