Loans ease on volatility, outflows; Microsemi trades higher; calendar pushes into 2016

By Paul A. Harris

Portland, Ore., Dec. 18 – Bank loans eased against a backdrop of continuing capital markets volatility and on news of ongoing outflows, a trader said late Friday.

Loan funds have sustained more than $3.4 billion of outflows since the beginning of December, and the pace of outflows seems to be accelerating, the source remarked, adding that these factors appear to be pushing the forward calendar into the new year.

“You’re starting to get the junior members picking up the phone when you call the syndicate desks, so it looks like we have wrapped things up for the year,” said the trader.

Kraton Polymers LLC’s $1.35 billion six-year senior secured term loan B (Ba3/B+) could be one deal that moves into the year ahead, according to the trader, who was watching for it to allocate heading into Friday's close.

The deal terms didn't show up, the source added, noting that the $425 million junk bond deal, which also launched earlier in December, is already 2016 business.

The bank deal, via Credit Suisse, Nomura and Deutsche Bank, is coming at Libor plus 500 basis points, the high end of the Libor plus 475 bps to 500 bps talk. The original issue discount deepened to 92 from 98.

Microsemi Corp.’s term loan, which broke for trading on Thursday, traded up to 99 bid, 99½ offered on Friday, the trader said.

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