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  • Loan Market Commentary 02/01/2010 0 comments
    Feb 1, 2010 5:20 PM
    The loan market is picking up from where it left off last week. The slowdown in buying continues, and with the demand gone there is nothing to support loan bids and they have begun to fall. Today things were down anywhere from an eighth to a quarter point on very light volumes. Being that this has been the case for the past few days the sentiment is shifting to the “why buy today when it will be cheaper tomorrow” mindset.  So, now the game has changed and people have moved to the sidelines until something inspires the market. New Issues remain to be a hot item and demand for that paper has not been deterred, as seen with the Spansion and Chemtura deals today. Spansion’s term loan broke for trading at 100.25 -100.75 after being issued at an OID of 98 and Chemtura’s term loan broke at 100.25 – 100.5 and was issued at an OID of 99. The LCDX 13 continues to be softer and has been under-performing the HYCDX 13. Today the LCDX 13 was down an eighth to 101 1/8 – 101 3/8. Demand in the index will likely increase as it descends back to par and becomes a more attractive buy. Also, the index would be a nice hedge against a sell-off, which looks to be a possibility. So, there are a few factors to watch out for, in regards to the LCDX.
     
    • Travel service company Travelport Inc on Monday announced a price range for its $1.78 billion London listing, valuing the company's equity at between $3.05 billion and $3.45 billion. Travelport is offering 382.54 million shares and 528.27 million shares at between 210 pence and 290 pence each ($3.36-$4.64), representing 51 percent to 58 percent of its enlarged share capital.
    • Yellow pages publisher R.H. Donnelley Corp said it had emerged from its Chapter 11 restructuring as Dex One Corp and would begin trading on the New York Stock Exchange under the ticker "DEXO" on Monday with 50 million shares of the new company outstanding.
    • Reader's Digest Association Inc said on Monday it would delay its emergence from bankruptcy after Britain's pension regulator said it would not approve the publisher's agreement with pension fund trustees regarding a British pension fund deficit. The British arm of Reader's Digest in January reached an agreement with the trustees of its and the UK Pension Protection Fund to resolve the company's deficit. The agreement was contingent on approval from the UK Pensions Regulator, which has indicated it will not approve the pension application.
    • Bolthouse Farms has reduced pricing on both its first- and second-lien term loans and changed tranche sizes, sources said. The $790 million deal now consists of a $500 million, six-year first-lien loan (reduced from the previous $550 million), a $175 million, 6.5-year second-lien loan (reduced from the previous $225 million), a $65 million, five-year revolving credit facility, and a new $50 million incremental tranche. Pricing on the first-lien was reduced to LIB+350 from LIB+400, while pricing on the second-lien was reduced to LIB+750 from LIB+800. The 2% Libor floor remains. The OID on the first-lien remains at 99, while the OID on the second-lien loan was tightened to 99 from 98.
    • The market for Cinram International's term loan fell and widened out on news the company's largest customer will no longer used the company as its exclusive provider. The loan fell to 67-72, down from the high 80s before the news, sources said. The company said Warner Home Video will end its agreement to use Cinram as its exclusive provider of DVD products and distribution services on July 31. The deal with Warner accounted for about 28% of Cinram's 2009 revenues, the company said.
    • Spansion Inc's $450 million, five-year senior secured term loan B is trading 100.25-100.75 after the facility broke for trading this afternoon, sources said. The loan was sold at 98. Pricing is LIB+550 and OID is in the 98 area. A 200bp closing fee is offered of which 50bp is payable on funding and the remaining 150bp payable on exit.
    • Chemtura Corp's new loan broke for trading in the 100.25-100.5 range. The facility was flexed down by 25 bps to LIB+400 and the OID was tightened from 99 to 99.5. The Libor floor is 2%. The Citi-led exit financing consists of a $300 million term loan and a $150 million revolving credit facility.
    • Dole Food is launching tomorrow an $850 million term loan to refinance debt. Price talk is not yet out there, but Deutsche Bank, Bank of America Merrill Lynch and Wells Fargo are leading the deal.
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