Helm sets talk; index finishes flat on Friday; investor parses 44 straight weeks of inflows

By Paul A. Harris

Portland, Ore., May 6 - The LCDX index finished the Friday session flat at 100.375 bid, and loans in the secondary were largely unchanged, according to a market source.

Helm Financial Corp. talked its $120 million Libor plus 550 basis points term loan at 99.

Meanwhile a bank loan mutual fund manager, parsing the 44th consecutive weekly inflow to the bank loan mutual funds, a $690 million flow for the week to May 4, blames the relentless tide of cash into the asset class on the policies of Federal Reserve chairman Ben Bernanke.

Upsized Springleaf allocates

Springleaf Financial Funding Co.'s upsized $3.75 billion Libor plus 425 basis points six-year senior secured term loan (B2/B+) priced at 99.5 on Friday.

The deal, which was upsized from $3 billion, features a 1.25% Libor floor. There is hard call protection of 102 in year one and 101 in year two.

Bank of America Merrill Lynch is the lead arranger on the deal.

Proceeds will be used to refinance the company's existing term loan that was obtained last year at pricing of Libor plus 550 bps with a 1.75% Libor floor and sold at an original issue discount of 981/2.

The funds being raised through the upsizing will be used for general corporate purposes.

Aeroflex prices at 99.5

Elsewhere Aeroflex Inc. priced its $725 million Libor plus 300 basis points seven-year term loan B at 99.5.

The Libor spread is 25 basis points inside the original Libor plus 325 bps to 350 bps spread talk.

The deal includes a 1.25% Libor floor and 101 soft call protection for one year.

The company's $800 million credit facility (B1/BB-) also includes a $75 million five-year revolver.

J.P. Morgan Securities LLC, Goldman Sachs & Co., Morgan Stanley & Co. Inc. and Credit Suisse Securities (USA) LLC were the lead banks on the deal.

Proceeds will be used to refinance existing debt.

Potter prices $150 million

Potters Industries Inc.'s term loans freed for trading.

The $150 million Libor plus 450 basis points six-year first-lien loan (Ba3/B) traded to par ½ bid, 101¼ offered, after pricing at 99.

The loan priced on top of tightened spread talk and price talk. Earlier talk had the deal coming at Libor plus 475 bps at 98.5.

The first-lien term loan has a 1.5% Libor floor and 101 soft call protection for one year.

Meanwhile the $112 million Libor plus 850 bps 6.5-year second-lien loan (Caa1/CCC+) traded to par ½ bid, 101½ offered, after pricing at 98.5.

The second-lien deal also came on top of tightened spread talk and price talk. Earlier talk had it pricing with an 875 bps Libor spread at 98.

The second-lien term loan has a 1.75% Libor floor and call protection of 104 in year one, 103 in year two, 102 in year three and 101 in year four.

The company's $302 million credit facility also provides for a $40 million five-year revolver (Ba3/B).

J.P. Morgan Securities LLC ran the books.

The deal is in connection with the company's spinoff from PQ Corp., a Malvern, Pa.-based producer of specialty chemicals and catalysts.

Proceeds will be used to pay down borrowings under PQ's credit facility.

Helm sets talk

Helm Financial talked its $120 million Libor plus 550 basis points term loan at 99.

The loan features a 1.25% Libor floor.

The $170 million credit facility also includes a $50 million revolver

Credit Suisse Securities (USA) LLC and Guggenheim are leading the deal.

Proceeds will be used to refinance existing debt.

Leverage is 3.3 times.

Blame it on Ben

For the 44th consecutive week the bank loan mutual funds saw positive cash flows, market sources say.

The funds saw $609 million of inflows for the week to Wednesday, according to a weekly report from Lipper-AMG.

"Blame it Ben Bernanke," advised a bank loan portfolio manager from a mutual fund, referring to the Federal Reserve Board chairman.

Quantitative easing on the part the Fed has made investing in some asset classes easier than others, the manager explained.

For many investors, bank loans represent the sweet spot.

Loans, as opposed to high-grade corporate bonds, provide protection from inflation because the coupon floats with Libor, the investor said, adding that institutional investors seem increasingly apprehensive about eventual inflation.

"A lot of people can't own high-yield bonds, due to the risk. And some of those investors have concerns about municipal bonds.

"If you eliminate Treasuries, high-grade corporate bonds and municipal bonds, and you're not ready to get back into the stock market, you look to loans, which is why we're seeing these phenomenal inflows," the manager said.

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