LCDX trades up; procedural delays slow trading of CIT loan; Venetian Macao starts amendment

By Paul A. Harris

St. Louis, July 14 - The LCDX index was up nearly ½ point on Tuesday, closing at 87.20 bid, 87.50 offered, versus 86.75 bid, 87.05 offered on Monday, a bank loan trader said.

On-the-run cash loans were up ¼ to ½ point, another trader said.

Market players continued to focus on CIT Group. However while the bonds were up and the credit default swaps improved, loan levels are not easy to come by, sources said.

One trader said that banks are awaiting approvals to offer their portions of the CIT loan. Hence the paper has not yet hit the market.

Meanwhile the primary market remained becalmed in the summer doldurms.

No new deals were announced.

However Venetian Macao-Resort-Hotel launched an amendment via Goldman Sachs.

Venetian Macao looks to amend

Venetian Macao has launched an amendment to its credit agreement.

It would allow for up to $1 billion of additional first-lien debt and up to $500 million of additional second-lien debt.

In addition the amendment would allow for an initial public offering of shares.

The company is also seeking covenant relief.

In exchange, lenders would receive a 50 basis points fee, and a 50 bps increase in the coupon, which would take it to Libor plus 275 bps.

Goldman Sachs & Co. is leading the deal.

CIT: a search for loan levels

Against the backdrop of better prices for CIT bonds, and improved CDS, players are becoming interested in the company's term loan, a trader said on Tuesday.

However the banks don't seem to be unloading it yet.

For these banks, the process for selling it is longer than a one-day or two-day process, the source explained.

They need approval before that paper starts to hit the market.

On Monday $10 million of the CIT loan paper was offered in a BWIC auction, said the trader, who kept a close eye on the event.

It might have just been a pricing exercise, the source surmised.

"Afterward we couldn't tell whether or not it traded."

Summer doldrums

Midsummer has thinned the ranks on trading and syndicate desks, sources said Tuesday.

One trader spoke of a desk that was only partially staffed, and would remain that way until August.

Apart from CIT and the financial space, secondary activity remained muted on Tuesday, although perhaps not quite as muted as was the case on Monday.

Cablevision Systems Corp.'s loan was at 95 1/8 bid, 95 5/8 offered, up from 95 bid on Monday, a market source said.

Meanwhile the HCA Inc. loan was at 92¾ bid. However the source could not specify what move, if any, that level represents.

A club-style primary

Apart from the Venetian Macao amendment, syndicate sources turned out empty pockets when asked for primary market news on Tuesday.

One syndicate banker said that at the end of last week two deals were believed to be in the market.

The Nuveen Investments Inc. six-year second-lien term loan, a 12½% fixed-rate piece of paper which looks a lot like a junk bond - with junk-style call features and change of control - is roundly reported to be doing well.

It has been upsized to $500 million from $350 million, market sources said Monday.

Deutsche Bank is leading the deal.

Pricing information could come out on Wednesday, according to an informed source.

Pricing information is also expected soon on the Chester Downs and Marina LLC $230 million seven-year secured term loan (B3/B) via Citigroup, Bank of America, JPMorgan and Jefferies.

Apart from those deals, the primary market is pretty slow, the banker said.

This source suspects that some of the smaller deals that had occupied the forward calendar in recent weeks have ultimately been transacted club-style - that is, taken down by a very small group of investors, or even a single investor, without the broader market learning the final terms.

Drew Marine launched a $55 million deal in June, the banker recalled, adding that it was structured as a $10 million revolver and a $45 million term loan B.

It was offered at Libor plus 650 bps, discounted to 97.00, the source said.

However there was no further news that the deal had cleared the market.

"It could have been taken down by a few people, and you'll never hear anything about it," the banker remarked.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.