Mattress widens, adds covenant; PGT sets final pricing; bank loan market firm, unchanged

By Paul A. Harris

Portland, Ore., Feb. 1 – Bank loans were firm but basically unchanged as February got underway in the leveraged loan market, a trader said.

At present the new issue market is a story of deals that are oversubscribed, which tend to be the deals that come with the strongest credit ratings, versus the lower-rated deals that are being subjected to investor pushback and price discovery, the source remarked.

Mattress Firm Holding Corp. widened the spread and deepened the discount relative to talk on its $730 million incremental first-lien term loan due Oct. 20, 2021 (Ba3/B+).

The spread widened to 500 bps from earlier talk of 450 bps to 475 bps. As before, the spread will float atop a 1% Libor floor.

The deal is now set to price at 97, a revision from earlier talk of 98.5 to 99.

The 101 soft call protection increases to 12 months from six months.

Meanwhile, PGT Inc. set final pricing on its downsized $270 million term loan B (B2/B+).

The deal priced with a 575 bps spread to Libor, atop upwardly revised talk; earlier talk was 500 bps to 525 bps. The Libor floor is unchanged at 1%.

The reoffer price took the discount down to 97. Earlier OID talk was 98.5.

The maturity was decreased to six years from seven years.

The 101 soft call protection was extended to 12 months from six months.

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