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12/09/2009 Loan Market Wrap

The loan market felt better today, volumes picked up a little bit as well. Most of the trading however was driven by news. There were a lot of names quoted better today, but that is due mostly to year-end clean-up by many of the trading desks. Investors are still fixated with the new issue market as the forward calendar continues to grow. In the primary market, Pinnacle Foods’ new loan syndicated today and was a hot item today. The company’s term loan shot up to 101.375/101.625 as investors scrambled to get involved. The loan sold at an OID of 99. This is a very good indication of how strong the demand is for new issue paper; it says a lot when a covenant-lite term loan is priced above par. Remember last year when no one would touch a covenant-lite term loan with a ten foot pole; now people are desperate to buy. We are still waiting to hear how well the BWIC’s announced yesterday went. Remember the last BWIC that hit the market was only 80% subscribed, and that one was composed of mostly on the run credits. In the synthetic market, both the LCDX13 and HYCDX12 were flat on the day at 98.62/98.85 and 95.125/95.3125.
  • Neiman Marcus’ TLB rose about 50bp to 87-87.75 after the company reported better-than-expected 1Q10 results, sources said. This morning, the company posted EBITDA of $130 million, a 6.7% decline from the year-earlier period. Sales in the quarter were $896 million, a 12% decline from the year-earlier period.
  • Clear Channel Communications’TLB has firmed this week following news reports the company is looking to sell $2.5 billion in high yield debt. The loan is currently wrapped around 80, up from the mid 70s at the beginning of the week, sources said. Earlier this week, The Wall Street Journal reported the company is looking to raise up to $2.5 billion in new bonds, a financing that could help prevent it from violating covenants on its secured debt.
  • American Axle & Manufacturing’s $400 million notes are talked in the 9.5% to 9.75% range, according to IFR, a Thomson Reuters service. Pricing is expected tomorrow. The company is selling $400 million senior secured first-lien notes due 2016 to repay bank debt.
  • Pinnacle Foods’ new $850 million covenant-lite term loan is trading in the 100.375-100.625 range after the facility broke for trading this afternoon, sources said. The loan was sold at 99. The spread on the new loan is LIB+500 with a 2.5% Libor floor. The term loan, along with a $25 million revolver, backs the company's acquisition of Birds Eye Foods Inc.