Universal Fiber hikes talk on second-lien loan; chemical names softer; outflows on Monday

By Paul A. Harris

Portland, Ore., Sept. 29 – Cash loans finished the Tuesday session up a quarter of a point, after having dropped three-quarters of a point on Monday, according to a loan trader who reported seeing more stability than had been the case at the opening of the week.

However there were distinct pockets of weakness, the source added.

Chemicals names were softer on the day, on news of the sector continuing to see challenges in the market place.

The loan paper of Chemours Co. was down a point at 87 bid, the trader said, adding that it traded in the high 88s on Monday.

Tronox Inc. loan paper was also getting beaten up, the source added, spotting it at 86½ bid, 87½ offered.

However Valeant Pharmaceuticals International Inc. loans, which traded as low as 97 bid on Monday, retraced some lost ground.

The LCDX22 bank loan index finished Tuesday unchanged at par bid, 101 offered, according to a hedge fund manager.

The cash flows of the dedicated bank loan funds were negative on Monday, a source said.

The funds sustained $65 million of outflows, $21 million of which came out of bank loan exchange-traded funds, on Monday, the source added.

And Universal Fiber Systems LLC lifted spread talk on its $40 million second-lien term loan (Caa1/CCC+) to Libor plus 925 basis points from earlier talk of Libor plus 850 to 875 bps, according to a market source.

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