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Loan Market Commentary 03/18/2010

Overnight, worries about Greece resurfaced after the officials warned that they will have to turn to the IMF for aid if the EU doesn’t agree on a plan by next week. Investors are clearly frustrated with all the talk that has been going on and indices were down in the EU and Asia. As for the US, futures pointed to a lower open however, the CPI and jobless number were largely unchanged and in-line with expectations and the equities opened up positive. There was not much volume today and things chopped higher. Talk about a hike in the discount rate before the next fed meeting hit headlines, but did little to the market as this, for most, has already been discussed as a possibility. In all, it was a pretty boring day.
This morning the loan market was active and volumes were decent in the secondary. The investors are still very much focused on the primary and that trend is going to continue as deals continue to get done. In the afternoon the market went quiet once the tournament started. Loans were mostly unchanged today with only a hand full of loans trading. Only 273 out of the 1081 loans in the S&P/LSTA Leverage loan Index moved today, and of those loans, 200 were up around an eighth. The LCDX13 was unchanged at 104 – 104 ¼. With the primary market taking up much of people’s bandwidth, the secondary market is going to be quiet for a while and the market will remain flattish and much of the trading will be news driven.
  • Bank presentations have been scheduled to take place early next week in London and New York for the consent process backing UK chemicals company Ineos Group's refinancing plans. The bonds are expected to be launched by mid-April
New Issue
  • Terms were revealed on Integrys Energy Group Inc's $1 billion, three-year revolving credit facility ahead of its bank meeting in Chicago today. The deal is divided into a $635 million tranche borrowed via Integrys, a $250 million tranche via Peoples Gas Light & Coke (PGL) and a $115 million revolver via Wisconsin Public Service Corp (NYSEARCA:WPS). Bank of America Merrill Lynch and JP Morgan are the leads on the Integrys tranche, Bank of Tokyo-Mitsubishi UFJ and Wells Fargo are leads on PGL's tranche, and Keybank and US Bank are leads on WPS tranche. Pricing is LIB+200 with a 30bp undrawn fee for Integrys based on its Baa1/BBB senior unsecured ratings, LIB+175 with a 22.5bp undrawn for PGL based on its A3/BBB+ ratings, and LIB+150 with a 17.5bp undrawn for WPS based on its A2/A- ratings.
  • Independent oil refiner Coffeyville Resources will raise $500 million in two-part senior secured notes. The deal includes $250 million in first-lien notes due 2015 and $250 million in second-lien notes due 2017. The first-lien notes are non-callable for two years, while the second-lien notes are non-callable for three years. Proceeds are to repay the company's first-lien term loan and for general corporate purposes. Their term loan rose an eighth on the news to 100 5/8 – 100 7/8. Standard & Poor's Ratings Services assigned 'BB-' ratings to Coffeyville Resources LLC's new senior secured term notes based on the preliminary terms and conditions of the offering memorandum.
  • NEW Customer Service's $300 million unsecured term loan due 2017 priced at LIB+750 with a 2% Libor floor and an OID of 98. The issue was downsized from an originally expected $400 million. The unsecured loan runs alongside a $700 million first-lien term loan, talked at LIB+425 with a 1.75% Libor floor and a 99 OID. The seven-year unsecured term loan will be non-call for two years, and then at 103, 101 and par. Bank of America Merrill Lynch, Barclays and Deutsche Bank launched the $1.1 billion loan for NEW Customer Service last week.
  • M&T Bank has upsized a $125 million deal for Martek Biosciences to $175 million. The deal includes a $100 million revolving credit facility and a $75 million term loan. The Libor floor on the deal was decreased to 1.25% from 1.5%, while the grid-based commitment fee was also lowered and now ranges from 12.5bp to 25bp. Pricing on the revolver ranges from LIB+200 to LIB+300 and opens at LIB+300. Pricing on the term loan ranges from LIB+237.5 to LIB+337.5 and opens at LIB+337.5. Proceeds are to back the company's acquisition of Amerifit Brands from Charterhouse Group. Leverage is under one times.
  • Moody's Investors Service has today undertaken a series of rating actions related to Ineos Group Holdings plc ("Ineos" or the company) and its various debt instruments in conjunction with assigning a positive outlook.
    • Corporate Family Rating (NYSE:CFR) upgraded by one notch to Caa1
    • The ratings on the first lien senior secured bank facilities were upgraded by two notches to B2
    • The ratings on the EUR 650 m 2015 2d lien senior secured loans were upgraded by one notch to Caa2