NBTY allocates, trades higher; PQ Corp tightens talk; McGraw-Hill accelerates timing

By Paul A. Harris

Portland, Ore., April 26 – The “hot market” signals are lighting up in the leveraged loan space, a sellside source said, shortly after Tuesday’s close.

Spreads are flexing tighter, discounts are being cut, and timing is being accelerated, the source said, pointing to recent transactions from NBTY Inc., PQ Corp. and McGraw-Hill Global Education Holdings LLC, all of which generated news on Tuesday.

Issuers that are in the leverage markets with simultaneous loan and bond financings are realizing considerable benefits from the synergies, the source observed.

NBTY priced $1.33 billion and £350 million of covenant-light term loans B (B1/B+) on Tuesday, according to a market source.

The dollar-denominated paper traded to par bid, 100 3/8 offered on the break.

PQ further tightened spread talk on $1.2 billion equivalent of 6.5-year senior secured covenant-light term loans (B2/B+), a market source said on Tuesday.

New talk has the package – $900 million of dollar-denominated paper and $300 million equivalent of euro-denominated paper – coming at 475 bps spreads to Libor and Euribor.

That shaves 25 bps from earlier talk of 500 bps, which was itself a revision from still earlier talk of 550 bps.

McGraw-Hill Global Education moved up the deadline for its $1,305,000,000 six-year first-lien covenant-light term loan (Ba3/BB-), a market source said on Tuesday.

Commitments are now due at noon ET on Wednesday. The prior deadline had the books remaining open until Thursday.

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