Centerplate allocates, trades up; LCDX finishes higher; loan funds see $108 million inflows

By Paul A. Harris

St. Louis, Sept. 9 - The LCDX 14 bank loan index ended the Thursday session at 96 3/8 bid, up 1/8 point on the day, according to a mutual fund manager in the Midwest.

Meanwhile the cash picture in the leveraged loan market remained positive.

Bank loan mutual funds saw $108 million of inflows for week to Wednesday, according to Lipper-AMG, a hedge fund manager said.

Better than cash

The market continues to move from strength to strength, with recently priced loans holding in around par - most, if not all of them significantly above their OIDs, sources said.

Gentiva Health Services Inc.'s $500 million six-year term loan B was at 99½ bid, par offered, with only bids visible, on Thursday afternoon, the fund manager said.

The deal, which came at a Libor plus 500 basis points spread, with a 1.75% Libor floor, priced at 96 in mid-August.

Elsewhere, Savvis Inc.'s $550 million term loan was at par bid, par ½ offered, on Thursday, the investor added.

Savvis also came with a Libor plus 500 basis points spread, and a 1.75% Libor floor, pricing at 97 at the end of July.

With such dramatic price appreciation, isn't there enticement to sell such deals? Prospect News asked this investor.

"These loans are better than cash," the buy-sider insisted, adding that with the spread plus the Libor floor, the coupon on each one is 6.75%.

"You have to own something," the investor added.

Centerplate allocates, breaks higher

The torrid pace set in the primary market during the Tuesday and Wednesday sessions cooled somewhat on Thursday, with the Rosh Hashanah holidays thinning the ranks of market participants.

Centerplate Inc.'s $194 million Libor plus 850 bps term loan B priced at 97, and broke to 98 bid, 98½ offered.

The deal priced on top of the revised OID talk. Initial price talk was 98.

The spread came on top of upwardly revised spread talk; the spread initially was talked at 625 bps to 675 bps.

The loan has a 2% Libor floor, and 102 call protection in year one, declining to 101 in year two. The call protection was also added in the restructuring.

The company's $314 million credit facility (B3/B+) also includes a $70 million revolver and a $50 million term loan A.

Macquarie, UBS and BMO Capital Markets were the lead banks on the deal.

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

Oshkosh sets pricing

Elsewhere, Oshkosh Corp. set pricing on its $1.2 billion pro-rata credit facility (Ba3/BB-).

The deal features up to a $550 million revolver and a $650 million term loan A.

The spread is pegged to a leverage-based grid which opens at Libor plus 300 bps at 2.75 times to 3.75 times leverage.

Maximum total leverage is 4.5 times. Maximum senior secured leverage is 3.25 times. Minimum interest coverage is 2.5 times.

There is a 50 bps undrawn fee on the revolver.

The loan has a 2.5% quarterly amortization, with a bullet maturity.

There is a $400 million increase option.

Bank of America and JPMorgan are leading the deal, which will be marketed to banks.

Proceeds will be used to refinance existing bank debt.

Fresenius amend-to-extend

Meanwhile Fresenius Medical Care USA set pricing for its amendment to extend its $1 billion revolver and its $1.3 billion term loan A on a leverage-based grid beginning at Libor plus 150 bps.

That spread is based on leverage of 2 to 2.5 times.

Bank of America Merrill Lynch and Deutsche Bank are the lead arrangers.

The grid features a spread step-up to 162.5 bps should leverage increase to greater-than 2.5 times. It features a step-down to Libor plus 137.5 bps if leverage falls to 2 times or less.

The revolver comes with a 50 bps undrawn fee.

The U.S. bank meeting took place on Wednesday. A bank meeting took place in Germany on Sept. 3.

Aspen Dental firms tranching

Looking to the week ahead, Aspen Dental firmed the tranching on its $230 million credit facility.

The deal features a $35 million revolver, a $150 million first-out term loan and a $45 million last-out term loan.

A bank meeting is set for Monday.

UBS and Jefferies & Co. are managing the deal.

Proceeds will be used to help fund the buyout of the company by Leonard Green & Partners LP.

Total leverage will be around 4 times.

© 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.