Leveraged loans soften, as market measures Goldman Sachs news; new deal calendar builds

By Paul A. Harris

St. Louis, April 19 - The leveraged loan market softened somewhat, as players parsed the implications of the Securities and Exchange Commission civil lawsuit against Goldman Sachs, alleging fraud.

The main questions, Monday, were: 1) Will it impact prices in the loan market, and 2) Will the situation generate changes in the way that the government oversees the industry.

"It causes people to put down their pencils, and try to figure things out," said a bank loan trader who marked cash loans down 1/8 to ¼ point heading into the mid-afternoon, in a very quiet secondary market.

The LCDX 14 loan index was 100 1/16 bid, 100 3/16 offered, after having opened at 100 1/8 bid, the trader added.

Most recent deals holding in

Most of the recently priced loans were holding in, or perhaps a touch softer, relative to last Friday's prices, the trader said.

The new Reynolds and Reynolds Libor plus 350 bps seven-year term loan, which priced last week at 99.25, shot to 100 bid, 100.25 offered, on Friday, and was flat on Monday, the source said.

The new CF Industries Holdings Inc. loan, which priced last week at 99.50, was unchanged on Monday after having traded Friday at 101.25 bid, 101.50 offered.

The five-year revolver was upsized to $500 million from $300 million last week.

"They initially went out with $300 million, and had an accordion up to $500 million" the trader recounted.

"They actually used the entire accordion due to over-subscription.

"And people still were cut back."

Proceeds are being used to fund the acquisition of Terra Industries Inc., which was completed on Thursday.

Meanwhile, the American General Finance Corp. $3 billion five-year senior secured term loan, which priced last week at 98.50, was at 100.50 bid, 101 offered on Monday, after trading as high as 101 3/8 bid, 101¾ offered last Friday.

Atrium meeting for Tuesday

In the primary market the forward calendar grew by dint of several deal announcements.

Atrium Cos., Inc. will hold a Tuesday bank meeting for its new $185 million six-year term loan.

The Dallas-based vinyl and aluminum window company, which filed for bankruptcy protection in January, will use the proceeds to repay existing debt and exit Chapter 11.

UBS is the lead arranger.

The loan will be secured by a first priority lien on all non-ABL assets.

National Vision meeting Thursday

National Vision, Inc. will hold a Thursday bank meeting in order to launch its new $220 million six-year term loan.

JP Morgan is the lead arranger.

The Lawrenceville, Ga.-based provider of optical products and services will use the proceeds to fund a dividend and to refinance debt.

Del Taco for Friday

Elsewhere, Del Taco LLC will launch its $190 million credit facility at a bank meeting scheduled for 9:30 a.m. ET on Friday.

Tranching on the deal is comprised of a $40 million revolver and a $150 million term loan, the source said.

Price talk on the term loan has been circulating in the Libor plus 450 basis points area with a 2% Libor floor and an original issue discount of 98 to 99.

Wells Fargo is the left lead bank on the deal.

Proceeds will be used to refinance existing debt.

Del Taco is a Lake Forest, Calif.-based operator and franchiser of restaurants.

© 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.