Alliance allocates; Reynolds re-jiggers, tightens talk; Soaring prices puzzle asset manager

By Paul A. Harris

St. Louis, Sept. 24 - Alliance Laundry Systems LLC's $285 million six-year term loan priced at Libor plus 450 basis points with a 1.75% Libor floor at 99 and allocated on Friday.

The deal shot up to 100 bid, 100½ offered in the secondary, a market source said.

Reynolds Group Holdings Ltd. shifted $500 million to its credit facility from its high-yield bond offer.

The bank deal is upsized to $2 billion from $1.5 billion. The bonds are downsized to $3 billion from $3.5 billion.

The LCDX 14 traded ½ a point higher on Friday, according to a trader who spotted it at 96¾ bid, 97 offered at the close.

The index is set to roll into its new LCDX 15 incarnation on Oct. 4, the trader mentioned.

Alliance Laundry details

The spread on Alliance Laundry's term loan came 25 bps tight to the Libor plus 475 bps spread talk, while the Libor floor is in line with talk.

The reoffer price came at the rich end of the 98 to 99 price talk.

The term loan includes 101 soft call protection for one year.

The company's $345 million senior secured credit facility also provides for a $60 million five-year revolver.

Bank of America is the lead bank on the deal.

Proceeds will be used to refinance existing debt.

Reynolds tightens talk

Talk was tighter on Reynolds' credit facility with the upsized $1.5 billion term loan at Libor plus 475 basis points, 25 bps lower than previous talk of 500 bps. The Libor floor moved down to 1.75% from 2%.

Price talk moved to 99 from 98.

The term loan D, which was upsized from $1 billion, features 101 soft call.

Commitments are due on Monday.

The facility also includes a $500 million term loan A, which remains talked at Libor plus 450 bps at 99. However, the Libor floor of the term A went to 1.75% from 2%.

The junk bond deal, which will come to market later, features secured and unsecured tranches, with sizes remaining to be determined.

Credit Suisse, HSBC and Australia and New Zealand Banking Group are the leading the debt financing, which will be used to fund the acquisition of Pactiv Corp.

Brickman sets price talk

Brickman Group Ltd. set price talk on its $500 million six-year covenant-light term loan.

Spread talk is Libor plus 575 basis points area with a 1.75% Libor floor. Price talk is in the 98 area.

The loan has call protection at 102 in year one and 101 in year two.

Commitments are due on Oct. 7.

The loan is part of a $550 million credit facility, which also includes a $50 million five-year revolver.

Barclays and Bank of America are the lead banks on the deal.

Proceeds will be used to fund a dividend payment and to refinance existing debt.

Euro-Pro brings add-on

Euro-Pro Holdings LLC is in the market with a $100 million add-on to its second-lien term loan.

JPMorgan is leading the deal, which is talked at Libor plus 850 to 900 basis points with a 2% Libor floor at a 98 area reoffer price.

Proceeds will be used to refinance debt and fund a dividend to management.

Terex announces amendment

Terex Corp. announced that it is looking to increase the flexibility under its bank credit facility via an amendment.

Credit Suisse is leading the deal.

The company is specifically looking to gain greater flexibility for various restrictive covenants in order to use proceeds from the sale of the Terex mining business that was concluded earlier this year to prepay, redeem or repurchase debt and make acquisitions.

Under the amendment, Terex said it would also prepay in full all $270 million of its term loans under the credit facility.

Soaring prices puzzle

Bank loans seem to be marching north of par, in lock step, market sources say.

When pressed to identify outperformers or underperformers, traders and others tend to turn out empty pockets.

"The vast majority of new loans have quickly traded to par-plus," an asset manager said on Friday.

"Our traders have commented that some of them have run up very close to 101 bid, which is different from anything we've seen for quite a while.

"At 101 bid, you have to start to wonder about your prepayment risk, which is why some buyside accounts are insisting on a soft call for a year, so that loan won't be taken out."

The technical forces bearing upon the bank loan market remain very positive, the manager said, recounting that Lipper-AMG reported a 12th consecutive weekly inflow on Thursday - $319 million, down from the previous week's record-breaking $480 million.

However, of the past 38 weeks, 35 have seen positive flows, the manager said.

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