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Loan Market Commentary 02/25/2010

The market was depressed today on news that both S&P and Moody's warned of a possible downgrade for Greece. Jobless claims came in worse than expected, 496K verses an expected 460K. Bernanke is going to be rehashing yesterdays talk in front of the Senate today, so their is going to be more talk of lower rates and free money as our economy continues to struggle to stand on its own two feet. On a positive note, the $32 billion 7 year Treasury auction went well. Glad to see that people are still hungry for US debt even as fears over Greece escalate

But, the fear did spread into the loan world and things were heavy today, but on light volumes. It was noted that the loan market firmed up a bit in the afternoon and was about unchanged for the day. People in the HY space remain better sellers and that has been weighing on loans. We had Cinemark, Celenese, Revlon, Cablevision, and Rail America all report earnings today and all were mostly positive. Cinemark absolutely blew away estimates. Anchor Glass new term loan broke for trading today at 99 1/2 - 100 after being issued at 99. The LCDX 13 was weaker today and got as low as 101 -101 1/4 by mid morning, however it has since firmed up to 101 1/8 - 101 3/8.

Pricing on Intergraph Corp's existing $420 million first-lien term loan and $200 million second-lien term loan might be bumped up by an additional 25bp to LIB+425 and LIB+825, respectively, in light of opposition from a block of lenders to the company's proposed amendment, sources said

Price talk is LIB+400 on Revlon Consumer Products Corp's (RCPC) $800 million term loan, with a 99 OID and a 2% Libor floor, sources said.

Bank loan mutual funds saw $227.96 million in inflows the week ended February 24, according to Lipper FMI. Last week, $160.92 million flowed in the bank loan mutual funds.