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Recent trends dominate despite
debt ceiling concerns
364-day
AA 3.5 2.5 5.0 20.3 5,000.0
A 9.83 7.00 12.50 50.50 2,094.00
BBB 21.7 10.0 30.0 166.7 558.3
Multi-year
AA 11.17 6.00 15.00 79.95 750
A+ NA NA NA NA NA
A 10.00 7.00 15.00 70.24 1,337.50
A- 18.33 15.00 25.00 141.67 1,166.67
BBB+ 17.50 15.00 20.00 140.00 1,550.00
BBB 21.25 15.00 30.00 135.63 1,162.50
BBB- 31.25 25.00 35.00 193.75 1,218.75
were light, with many investors looking to
remain invested but careful about picking
their spots. The result was a continued
buyers’ strike, causing the market to leak
slightly lower.
Volumes in the middle market loan space
were somewhat light but the same space
was insulated to a great extent from the
volatility in the broader market.
And the investment grade sector kept right
on ticking as banks continue to market large
bridge facilities at relatively thin spreads.
Leveraged
It was a tale of two markets in the pri-
mary leveraged loan market last week as
investors lapped up strong credits amid a
slowing pipeline.
With the drama unfolding in Washington
on the debt ceiling issue, the loan market
(LOAN MARKET cont’d on p. 2)
Thomson Reuters LPC uses the 3-5 latest transactions in each
ratings category. The credits represent syndications that were not
substantially under- or over-subscribed. Agent and syndications
fees are not included. Leveraged BSL Grid available at www.
Due to the lack of adequate deal fl ow, the multi-year revolver of some rating categories will not be posted until such time when there are suffi cient deals to report.
Non-sponsored middle market issuance topped $29 billion in 2Q11 pushing the total for the fi rst half to $49.5 billion, not far behind 1H07’s $56 billion. Unlike 2007, however, refi nancings continue to dominate, making up 70 percent of loan volume. Meanwhile, new money issuance remains at low levels. Lenders say that while they have seen some expansion in credit lines, there is still little core demand for loans in the non-sponsored market. Banks are not only struggling with the lack of new money, but are also concerned about the limited amounts of drawings that they are seeing under revolving credit lines, which make the bulk of lending in the non-sponsored pro-rata space. Without a meaningful increase in drawings and new money issuance, competi-tion for assets remains fi erce and non-sponsored lenders say that the market is as competitive as ever. Banks are hungry for assets and issuers continue to take advantage of this appetite to obtain better terms. Pricing has dropped dramatically and tenors are almost back to pre-crisis levels. The average tenor on large and traditional middle market non-sponsored revolvers was 4.5 and 3.9 years, respectively – very close to the 4.6 and four years seen back in 2006 and 2007.
High yield corporate bond volume has slowed signifi cantly in July, expected to barely top the double digit mark. In fact, July might end up as the fourth-lowest month of issuance in the past two years. The uncertainty surrounding sovereign debt concerns from both home and abroad have been the main driver of the slowing primary market. Last week, only $8.85 billion had priced over 21 deals. Volume last week was supported by the Reynolds Group, which priced its upsized $2.5 billion, two-part deal, the largest U.S. deal in the high yield market since Arch Coal priced its $2 billion offering in early June. Even so, the negative market tone was a result of continued uncertainty surrounding the U.S. debt talks and fear of a potential U.S. downgrade as Republicans and Democrats refuse to compromise on a budget plan. As a result, opportunistic issuers will most likely stay on the sidelines waiting for future stability in the market.
Price levels in the syndicated loan market remain weak as markets grapple with an uncertain macroeconomic picture. Since late April, average prices for riskier second-lien multi-quoted credits are down over 2.7 points to the 87 context as investors remain risk sensitive. The average bid for the overall market is also down 1.2 points since early May to the 96 context. Investors continue to face headwinds in a fragile economic recovery as sovereign debt problems threaten fi nancial markets. In Europe, despite the new bailout program unveiled recently, sovereign fears persist and are pressuring to include Spain and Italy. And while investors believe the U.S. will reach an eleventh hour deal to raise the nation’s debt ceiling, most economists believe the country’s AAA rating may be downgraded by at least one of the major rating agencies, according to a Thomson Reuters poll. A setback that threatens to derail already tepid economic growth.
The CLO market has shown a remarkable comeback in 2011. CLO issuance year to date is $7.6 billion, with another $2 billion in the pipeline. An even more bullish sign is that several CLOs raised this year exhibit debt-to-equity ratios that mirror leverage levels seen pre-crisis. Symphony, Carlyle and GSO Blackstone were all able to issue CLOs with leverage in the 11-13 times area. Spreads on new issue AAA rated tranches have also tightened, dropping from 160-170bp in January to the 120-130bp area in June and July. However, with recent negative headlines regarding the economy and sovereign debt issues, spreads in the secondary CLO market have widened out. Despite the CLO market’s vulnerability to macroeconomic events, many CLO managers are still predicting healthy issuance for the year. Demand for the CLO product across the capital stack is expected to remain strong, with banks and insurance companies reaching down to get higher yielding mezzanine CLO paper. Robust demand, of course, should translate to tighter pricing and higher leverage down the road but market participants are waiting it out for now to get some clarity on the fi nancial markets. Even so, activity in the new issue market has not come to a halt, with Octagon and Invesco waiting to print CLOs this summer.
GOLD SHEETS –August 1, 2011 6
THE WEEK’S BIGGEST WINNERS
Biggest Winners among widely quoted syndicated loans in secondary trading. All loans contain at least three bids.
Source: LSTA/LPC Mark-To-Market Pricing
Note: These are the averages of indicative bid prices provided by bank loan traders and expressed as a percentage of the par, or face, value. Coupon, or interest rate, is in
1/100s of a percentage point over Libor, the benchmark London Interbank Offered Rate. All ratings are for specifi c loans and not for the company itself except as noted
with an (a). These prices do not represent actual trades nor are they offers to trade; rather they are estimated values provided by dealers.
THE WEEK’S BIGGEST LOSERSBiggest Losers among widely quoted syndicated loans in secondary trading. All loans contain at least three bids.
Source: LSTA/LPC Mark-To-Market Pricing
Note: These are the averages of indicative bid prices provided by bank loan traders and expressed as a percentage of the par, or face, value. Coupon, or interest rate, is in
1/100s of a percentage point over Libor, the benchmark London Interbank Offered Rate. All ratings are for specifi c loans and not for the company itself except as noted
with an (a). These prices do not represent actual trades nor are they offers to trade; rather they are estimated values provided by dealers.
The yield differential between loans and bonds for the 30 liquid names included in the LPC Relative Value composite tightened by 24bp last week. The average loan
yield increased to LIB+383 while the average bond swap spread decreased to LIB+649, creating a differential of 265bp. In contrast, the LTM bond-loan differential
averaged 259bp.
The chart compares institutional term loans with high yield bonds of several issuers on a Libor-equivalent basis. Loan spreads are determined by their coupon
and secondary market price, and are calculated through a discounted cash fl ow model. Bond Libor-equivalent spreads are determined by taking the yield to worst,
subtracting a comparable Treasury yield and swapping the result to a fl oating-rate equivalent.
The borrowers used in this analysis have loans that are widely held in institutional portfolios. In addition, the sample is weighted to refl ect the overall market share
of each industry. Fifteen of the borrowers are shown below. Averages apply to all 30 issuers that make up the LPC Relative Value composite. See LoanConnector
Relative Value page for a list of all 30 issuers.
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RELATIVE VALUE MARKET
GOLD SHEETS – AUGUST 1, 2011 9
Amneal Pharmaceuticals Healthcare GE Capital/RBS Citizens 7/20 RFI 250 NA 5 325 NA
ArchBrook Laguna Holdings LLC Retail GE NA DIP 50 NA NA 375 NA
Ardent Health Services Healthcare BAML 7/14 ACQ 200 NA NA 500 NA
Aventine Renewable Energy Utilities Wells Fargo 7/21 GCP 50 NA 4 300-350 NA
BJ’s Wholesale Club Inc Retail DB/Citi/Barclays/Jefferies/GE/WF NA LBO 2575 NA NA NA NA
Blackboard Inc Technology BAML/DB/MS NA LBO 1150 NA NA NA NA
Bojangles Restaurants Eats Jefferies 7/26 LBO 215 NA 5 NA NA
California Pizza Kitchen Inc Eats Jefferies/GE Capital NA LBO 365 NA NA NA NA
Carrols LLC Eats NA NA GCP 85 NA NA NA NA
Chefs’ Warehouse Restaurants JPM/GE Capital NA RFI 80 NA NA 250 NA
CHI Overhead Doors GenManuf GE Capital/Wells Fargo 7/27 LBO 204 NA 5 NA NA
CKX Media NA NA LBO 595 NA NA NA
Clement Pappas FoodBeverage Jefferies/BMO 7/20 ACQ 280 NA NA NA NA
Diamond Foods Inc FoodBeverage BAML June ACQ 1000 NA 5 250 NA
Duckwall-ALCO Stores Retail Wells Fargo Capital Finance 7/21 RFI 120 NA 5 200 NA
Dynamics Research Corp Technology BAML/SunTrust Bank/PNC Bank NA ACQ 130 NA 5 400 50
Dynegy Inc Utilities Credit Suisse/Goldman Sachs/Barclays 7/11 ACQ 1700 NA 5 775 NA
EchoStar Corp Technology Deutsche Bank NA ACQ NA NA NA NA NA
Energy Transfer Equity LP OilGas Credit Suisse NA ACQ 3700 NA 364 NA NA
Fogo De Chao Eats JPM 7/26 GCP 205 NA 5 NA NA
General Cable Corp Cable JPM NA RFI 400 NA 5 150-200 NA
Go Daddy Technology BC/DB/RBC/KKR NA LBO NA NA NA NA NA
Henniges Automotive Automotive Credit Suisse/Macquarie/PNC 7/14 ACQ 155 NA 5 600 NA
Hertz Global Holdings Inc Automotive NA NA ACQ 650 NA NA NA NA
Immucor Inc Healthcare Citi/JPM NA LBO 1100 NA 5 NA NA
Insight Global Inc BusServices BNP Paribas 7/18 RFI 157 157 NA 500 NA
Insight Pharmaceuticals Healthcare GE Capital/RBC/SunTrust 7/21 ACQ 420 NA NA 500 NA
Ipreo Holdings BusServices RBC 7/7 LBO 170 115 NA NA NA
Kinetic Concepts Inc Healthcare BAML/CS/MS NA LBO 4950 NA NA NA NA
La Paloma Generating Utilities BAML 7/21 RFI 424 NA 5 NA NA
Lender Processing Services Technology JPM 7/28 RFI 1300 550 5 NA NA
Level 3 Communications Media BAML/Citi NA ACQ 1750 NA 7 425 NA
51%. Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $4,000. Pro Rata
= y. Min. hold = $5M.
Level Sr Rating P+ LIB+ Com
1 > or =A- 0 87.5 17.5
2 > or =BBB+ 0 100 22.5
3 > or =BBB 25 125 25
4 > or =BBB- 50 150 32.5
5 <BBB- 100 200 37.5
Pricing is as indicated initially, tied to co.’s senior unsecured LTD ratings by S&P and Moody’s thereafter. If split rated, higher rating applies. If split rated
by more than one level, level below higher rating applies.
NATIONWIDE HEALTH BBB-/Baa2 (Sr.) $800M TL 12 06/03/2011 P+50 Com 10 150.0/10.0 Corp. purposes
PROPERTIES INC (Unsec’d) 06/01/2012 LIB+150
Newport Beach, CA
$439.3M
SIC 6798
(Real estate
investment trusts)
REFI CREDIT
LEAD LENDERS: JPM Co - Admin. Agent/Lead Arranger, Credit Agricole SA - Arranger/Lead Arranger, Keybank NA - Arranger/Lead Arranger, Wells
ties LLC and JP Morgan Securities LLC acted as joint bookrunners and joint lead arrangers. Law Firms: Sherry Meyerhoff Hanson & Crance LLP and
Skadden Arps Slate Meagher & Flom LLP (for borrower). Pricing: Default rate = Applic. P+200 bps. Prime fl oor = one month LIBOR plus 100 bps.
No LIBOR fl oor. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.75:1; max. leverage ratio of 0.6:1. Min. net asset value of 85% of net asset
value as of closing. Max. secured debt ratio = 0.3:1. Max. unencumbered asset value ratio = 0.6:1. Indicated fi nancial covenant ratios required any
time acquisitions and dispositions by borrower are >$100M in any FQ. Indicated leverage ratio and unencumbered asset value ratio may be > 0.6:1 but
<= 0.65:1 for up to two consecutive FQs. Repayments: $800M install. on 06/01/2012. Prepayments: Debt Iss. Sweep = 100%. Equity Iss. Sweep =
LEAD LENDERS: Bank of America Merrill Lynch (9.14%) - Admin. Agent/Lead Arranger, Citibank (9.14%) - Syndications Agent/Lead Arranger, HSBC
(9.14%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Bank of Tokyo-Mitsubishi (7.43%), Deutsche Bank (7.43%), RBS (7.43%), Wells Fargo Bank (7.43%), Credit Suisse (5.71%), JP Morgan
Chase (5.71%), Sovereign Bank (5.71%), BBVA (4.29%), Societe Generale (4.29%), SMBC (4.29%), BONYM (2.86%), Bank of Nova Scotia (2.86%), US
Bank (2.86%), China Merchants Bank (1.43%), Intesa Sanpaolo (1.43%), NorthernTr (1.43%)
COMMENTS: Credit refi nances existing debt. Pricing: (See grid). Assignments: Pro Rata = y.
Level Sr Rating Com
1 > or =AA- 5
2 > or =A+ 6
3 > or =A 8
4 > or =A- 10
5 > or =BBB+ 15
6 <BBB+ 17.5
Pricing is tied to company’s CDS, with initial fl oor of 25bp and a cap of 125bp. Level 1 a fl oor of 20bp and a cap of 100bp applies; for Level 2 a fl oor of
22.5bp and a cap of 112.5bp applies; for Level 3 a fl oor of 25bp and a cap of 125bp applies; for Level 4 a fl oor of 50bp and a cap of 137.5bp applies; for
Level 5 a fl oor of 75bp and a cap of 162.5bp applies; and for Level 6 a fl oor of 100bp and a cap of 187.5bp applies.
AIRLINES CO (Unsec’d) 04/28/2016 LIB+225 SBLC 225 Capital expend.
Dallas, TX
$12.1B
SIC 4512
(Air transportation,
scheduled)
REFI CREDIT
LEAD LENDERS: JP Morgan (15%) - Admin. Agent/Lead Arranger, Citibank (15%) - Syndications Agent/Lead Arranger, Barclays Capital Group (10.63%)
- Co-agent, Deutsche Bank AG (10.63%) - Co-agent, Goldman Sachs & Co (10.63%) - Co-agent, Morgan Stanley (10.63%) - Co-agent
OTHERS IN DEAL: BNP Paribas (6.88%), Comerica Bank NA (6.88%), Societe Generale (6.88%), WellsFar&Co (6.88%)
COMMENTS: Credit refi nances co.’s previous credit agreement dated 09/29/09. JP Morgan Securities LLC and Citigroup Global Markets Inc. acted as
co-lead arrangers and joint bookrunners. Law Firm: Simpson Thacher & Bartlett LLP (for lender). Pricing: (See grid). Default rate = +200 bps. Prime
fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Option(s): $250M LC. Financial Covenant(s): Min. interest coverage ratio of 1.25:1. Indicated min.
interest coverage ratio may be reduced to 0.8:1 for two consecutive FQs, but co. must pay a quarterly fee of 25 bps to each bank for reduction. Prepay-
51%. Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata
= y. Elig. Assignees: commercial banks with total assets >$1B.
Level Sr Rating P+ LIB+ Com SBLC
1 > or =A 0 100 12.5 100
2 > or =A- 12.5 112.5 15 112.5
3 > or =BBB+ 25 125 17.5 125
4 > or =BBB 50 150 25 150
5 > or =BBB- 75 175 32.5 175
6 <BBB- 125 225 37.5 225
Pricing is as indicated initially, tied to co.’s senior unsecured LTD ratings by S&P and Moody’s thereafter. SBLC fee = LIBOR margin plus co. also pays an
undisclosed issuance fee. If split rated, higher rating applies. If Split Rated by more than one level, level below higher rating applies.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
INVESTMENT GRADE DEALS cont’d
GOLD SHEETS – AUGUST 1, 2011 13* - ALL- IN SPREAD, DRAWN / UNDRAWN
(Deal cont’d on next page)
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
M&A DEALS cont’d
BOJANGLES $215M LBO
RESTAURANTS INC (PACKAGE)
Charlotte, NC
SIC 5812
(Eating places)
PARTIAL
SPONSOR(S): Advent International Corp.
LEAD LENDERS: Jefferies Finance LLC - Arranger/Lead Arranger
COMMENTS: Credit backs the company’s buyout by Advent International. Credit comes with a roughly 45% equity check, which would value the deal at
approximately $390M. Jefferies is leading the deal. Assignments: Pro Rata = n.
LEAD LENDERS: Credit Suisse AG - Admin. Agent/Lead Arranger, Citibank - Syndications Agent/Lead Arranger, Bank of America Merrill Lynch - Co-
arranger, Bank of Tokyo-Mitsubishi Group - Co-arranger, Credit Agricole SA - Co-arranger, Deutsche Bank AG - Co-arranger, Mizuho Bank - Co-arranger,
Morgan Stanley - Co-arranger, Royal Bank of Scotland Plc [US] - Co-arranger, Sumitomo Mitsui Banking Corp - Co-arranger, SunTrust Bank - Co-arranger,
Wells Fargo Bank - Co-arranger
COMMENTS: Credit fi nances the company’s $29.1B takeover of Medco Health Solutions,for $71.36 per share. The facility will be replaced by a permanent
bond and loan fi nancing consisting of a $1.5B RC and $4B TLA in August. Co. is asking for $1B tickets with $700M allocated to this facility and $300M
allocated to the $5.5B pro-rata agreement. Assignments: Pro Rata = y.
PROLOGIS INC BBB-/Baa2 (Sr.) $1.778B Acquis. line
Denver, CO (PACKAGE)
$909M
SIC 6798, 6531, 6512
(Real estate
investment trusts)
REFI CREDIT ADDITIONAL BORROWER(S): Credit is arranged for Prologis LP and certain affi liate borrowers.
COMMENTS: Credit is arranged to fi nance the merger between ProLogis and AMB Property Corp. Credit refi nances existing credit agreements dated
07/16/07 between AMB Property LP and Bank of America, an agreement dated 11/10/10 between AMP Property LP and JP Morgan Chase Bank NA,
and an agreement dated 10/06/05 between Old Prologis and Bank of America. Credit may be increased up to $2.75B (or its equivalent) and may be
extended for one additional year. Merrill Lynch Pierce Fenner & Smith Inc., JP Morgan Securities LLC, RBS Securities Inc. and Sumitomo Mitsui Bank-
ing Corp. acted as global lead arrangers and global bookrunners. Law Firms: Mayer Brown LLP, Weidema van Tol, Anderson Mori & Tomotsune and
Morrison & Foerster LLP (for borrower). Haynes & Boone (for lender). Pricing: (See grid). Default rate = +200 bps. Prime fl oor = one month LIBOR.
No LIBOR fl oor. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.5:1; min. debt service coverage ratio of 1.5:1; max. loan to value ratio of 0.6:1.
Tangible Net Worth = $10B. Indicated loan to value ratio may be >0.6:1 but <=0.65:1 after any material acquisition. Prepayments: Amount Reduction
OTHERS IN DEAL: Goldman Sachs & Co. (8.84%), RBC (8.84%), Wells Fargo Bank (8.84%), Citicorp NA (6.63%), Deutsche Bank (6.63%), MorganStnlyS-
rFund (6.63%), HSBC (3.68%), Calyon Corporate & Invest (2.95%), Credit Suisse (2.95%), ING Bank (2.95%), Scotiabank Europe Plc (2.95%), CompassBk
(1.47%), NorthernTr, PNCBk
COMMENTS: Facility labelled as euro tranche. Facility is also available in US dollars, pounds sterling and yen. Option(s): $73.2M LC and $146.3M swingline.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 1152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
BBB-/Baa2 $285.273M RC 48 06/03/2011 P+40 Ann 30 170.0/30.0 Acquis. line
(At Close Sr.) (Part 2/3) 06/03/2015 LIB+140 SBLC 152.5
(Unsec’d) ExtenFee 20
GUARANTOR(S): ProLogis Inc. Credit is also guaranteed by Prologis LP.
LEAD LENDERS: Bank of America Merrill Lynch (14.38%) - Admin. Agent/Lead Arranger, JP Morgan (14.38%) - Syndications Agent/Lead Arranger, Royal
Bank of Scotland Plc [RBS] (14.38%) - Syndications Agent/Lead Arranger, Sumitomo Mitsui Banking Corp (10.66%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Citibank Japan Ltd (10.66%), Deutsche Bank (10.66%), Morgan Stanley MUFG Loan (10.66%), Bank of Nova Scotia (3.55%), Calyon
Corporate & Invest (3.55%), Credit Suisse (3.55%), ING Bank (3.55%), Goldman Sachs & Co., HSBC, NorthernTr, PNCBk
COMMENTS: Facility labelled as yen tranche. Facility is also available in US dollars, Euros and pounds sterling. Option(s): $26.8M LC.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
BBB-/Baa2 $790M RC 48 06/03/2011 P+40 Ann 30 170.0/30.0 Acquis. line
(At Close Sr.) (Part 3/3) 06/03/2015 LIB+140 SBLC 152.5
(Unsec’d) ExtenFee 20
GUARANTOR(S): ProLogis Inc. Credit is also guaranteed by Prologis LP.
LEAD LENDERS: Bank of America Merrill Lynch (5.49%) - Admin. Agent/Lead Arranger, Sumitomo Mitsui Banking Corp (6.33%) - Syndications Agent,
JP Morgan (5.49%) - Syndications Agent/Lead Arranger, Royal Bank of Scotland Plc [RBS] (5.49%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Goldman Sachs & Co. (8.23%), RBC (8.23%), Wells Fargo Bank (8.23%), Citicorp NA (6.33%), Deutsche Bank (6.33%), US Bank (6.33%),
Union Bank NA (6.33%), Morgan Stanley Bank (4.43%), HSBC (3.16%), PNCBk (3.16%), Bank of Nova Scotia (2.53%), Calyon Corporate & Invest (2.53%),
Credit Suisse (2.53%), ING Bank (2.53%), NorthernTr (2.53%), CompassBk (1.9%), MorganStnlySrFund (1.9%)
COMMENTS: Facility labelled as US tranche. Facility is also available in Euros, pounds sterling, yen and Canadian dollars. Option(s): $150M LC and
$100M swingline.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
REFI CREDIT GUARANTOR(S): Co.’s subsidiaries acted as guarantors.
LEAD LENDERS: PNC Bank (24%) - Admin. Agent/Lead Arranger, US Bank NA (20%) - Documentation Agent, Wells Fargo & Co (24%) - Syndications Agent
OTHERS IN DEAL: RBS Citizens (11%), RaymndJamesCorp (11%), Citicorp (10%)
COMMENTS: Credit refi nances co.’s previous RC dated 10/18/10. PNC Capital Markets LLC acted as lead arranger. Law Firms: Greenberg Traurig LLP
(for borrower). SNR Denton (for lender). Pricing: (See grid). Default rate = +400 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor.
Indicated cancellation fee applies thru year one. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.5:1; max. loan to value ratio of 0.6:1. Max.
consolidated unsecured debt to unencumbered real property value ratio = 0.6:1. Min. unencumbered real property adjusted NOI to consolidated interest
expense on consolidated unsecured debt ratio = 2:1. Min. % of total residential units in the qualifying unencumbered projects that are physically occupied
by tenants = 85%. Min. consolidated tangible net worth = $500M plus 85% of proceeds from any equity issuances. Prepayments: Amount Reduction
COMMENTS: Credit refi nances co.’s previous credit agreement dated 08/30/07. Indicated maturity may be extended to 03/15/16, if by 05/01/14, the
domestic borrower’s 2014 senior subordinated notes have (i) had their maturity extended to a date >= 6 months after 03/15/16, (ii) been repaid in cash in
full or (iii) been refi nanced by new unsecured senior or senior subordinated notes having maturity >= 6 months after 03/15/16. Credit may be increased
up to $1.15B. Credit comes in conjunction with $375M 144A senior subordinated notes due 05/01/21 at 6.5%. JP Morgan Securities LLC acted as sole lead
arranger and sole book manager. Law Firms: Gibson Dunn & Crutcher LLP and Shearman & Sterling LLP (for borrower). Vinson & Elkins LLP (for lender).
Pricing: (See grid). Default Rate = +200 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Financial Covenant(s): Min. interest cover-
age ratio of 3:1; max. debt to EBITDA ratio of 3.75:1. Max. Capex (initial) = $110M. Max. Capex (fi nal) = $150M. Capex carryover = 100%. Debt to EBITDA =
consolidated debt to consolidated EBITDA. Prepayments: Assets Sales Sweep = 100%. Indicated asset sales sweep not required if proceeds <= $5M or
if proceeds are reinvested within one year. Indicated prepayments apply to TL facilities. Amount Reduction = 100%. Guarantor Release = 100%. Margin
(At Close Sr.) (Part 1/3) 05/01/2014 LIB+200 Com 37.5
B+/B1 (Sec’d) SBLC 212.5
(At Close Sub.)
B1 (At Close CP)
LEAD LENDERS: JP Morgan (9%) - Admin. Agent/Lead Arranger, Bank of America (8.5%) - Co-agent, Commerzbank AG (8.5%) - Co-agent, DnB NOR
Bank ASA (8.5%) - Co-agent, Sovereign Bank (8.5%) - Co-agent, Wells Fargo & Co (8.5%) - Co-agent
OTHERS IN DEAL: BBVA Compass (6.5%), Bank of Tokyo-Mitsubishi (6.5%), Citigroup (6.5%), HSBCBankUSA (6.5%), Sumitomo Mitsui Banking C (6.5%),
Barclays Bank Plc (4%), US Bank (4%), BB&T Cap (2%), ComericaBk (2%), Morgan Stanley (2%), NorthernTr (2%)
COMMENTS: Facility is also available in Euros and pounds sterling. Option(s): $600M LC and $30M swingline. LC can be Financial or Performance LC.
LC is also available in alternate currency. Euro sublimit = $350M. Pounds sterling sublimit = $75M. Collateral: Unknown.
Level Debt/CF P+ LIB+ Com SBLC
1 > or =3 175 275 50 287.5
2 > or =2.25 <3 150 250 50 262.5
3 > or =1.5 <2.25 125 225 37.5 237.5
4 <1.5 100 200 37.5 212.5
Pricing is as indicated initially, tied to co.’s consolidated debt to consolidated EBITDA ratio thereafter. Indicated SBLC fee applies for Financial LC. Co.
pays Performance LC as follows: 177.5 bps for Level 1, 162.5 bps for Level 2, 147.5 bps for Level 3 and 132.5 bps for Level 4. Financial and Performance
LC fee includes a 12.5 bps issuance fee.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
(Deal cont’d on next page)
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
PROPERTIES LP (Sec’d) 12/14/2011 LIB+400 SBLC 412.5 Capital expend.
Columbus, OH ExtenFee 30 Corp. purposes
SIC 6798
(Real estate
investment trusts)
REFI CREDIT
GUARANTOR(S): Glimcher Realty Trust. Co.’s subsidiaries also acted as guarantors.
LEAD LENDERS: Keybank NA (14%) - Admin. Agent/Lead Arranger, Bank of America Merrill Lynch (14%) - Syndications Agent/Lead Arranger, US Bank
NA (14%) - Co-agent, Wells Fargo Bank (14%) - Co-agent, Huntington Bank (12%) - Co-agent, Charter One Bank NA - Co-agent
OTHERS IN DEAL: PNCBk (12%), Goldman Sachs Bank USA (8%), Aareal Bank (6%), Eurohypo-Deutsche Bk (6%)
COMMENTS: Credit amends & restates company’s $470M agreement dated 12/14/2006. Credit may be increased up to $300M and extended for two
additional one-year periods. Keybanc Capital Markets Inc. and Merrill Lynch Pierce Fenner & Smith Inc. acted as joint lead arrangers. Pricing: (See grid).
Default rate = +400 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Option(s): $50M LC and $35M swingline. Financial Covenant(s):
Min. fi xed charge coverage ratio of 1.35:1; min. interest coverage ratio of 1.75:1; max. loan to value ratio decreasing from 0.65:1 to 0.62:1. Net Worth =
$800M + build up. Min. consolidated net worth = $800M plus 75% of equity contributions or sales of treasury stock received by co. Collateral: Real Estate.
restricted. Required Lenders = 66.67%. Term Changes = 100%. Collateral Release = 100%. Assignments: Company consent required, Agent consent
required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata = y. Min. hold by Keybank NA = 10% of total commitment.
Level Loa/Value P+ LIB+ SBLC
1 >0.6 325 425 437.5
2 >0.55 < or =0.6 300 400 412.5
3 >0.5 < or =0.55 250 350 362.5
4 < or =0.5 225 325 337.5
Pricing is as indicated initially, tied to co.’s consolidated outstanding debt to total asset value ratio thereafter. SBLC fee = LIBOR margin plus a 12.5 bps
issuance fee (min. of $1.5K).
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
LEVERAGED DEALS cont’d
Non-M&A loans with LIBOR spreads ≥ 275 bps. DRESSER-RAND
CONT’D
GOLD SHEETS – AUGUST 1, 2011 17
(NEWS cont’d on page 18)
Despite the uptick in volatility seen in the
broader markets, the U.S. leveraged loan market
witnessed continued strength in the form of a
handful of downward price fl exes last week as a
majority of loans currently in market were able
to slash spreads during syndication.
“There’s still plenty of demand for good qual-
ity credits out there,” noted one market player.
Despite its B2 corporate family rating, sporting
goods seller Academy Sports & Outdoors was
able to cut pricing on its $840 million covenant-
lite loan to back its leveraged buyout by Kohlberg,
Kravis & Roberts. A good underlying business
profi le and positive same store sales through the
downturn helped investors get comfortable with
the deal. A large equity check from the sponsor
also helped.
Nevertheless, Morgan Stanley played it some-
what safe when it released initial price talk on the
deal. Originally, the deal was talked at LIB+475-
500 with a 1.5 percent Libor fl oor and a 98.5 OID
for a relatively wide yield of more than 7 percent
given a three-year maturity. That compares to
an average yield of around 6.3 percent in 2Q11
for similarly rated credits, according to data
compiled by Thomson Reuters LPC.
“Some issuers have been starting out (syndica-
tions) with wider pricing but then tighten pretty
quickly once they begin getting traction,” noted
another market player. “Banks don’t want to get
caught having to go the other way.”
Ultimately, Academy Sports took the spread
down to LIB+450 with a 1.5 percent Libor fl oor
and a 99 OID for a yield to a three-year maturity
of around 6.37 percent, a yield more in line with
the recent average.
Despite the cut, the loan performed admirably
in the secondary market, trading up a full point
to 100-100.25 on the break last Wednesday.
“A lot of the higher-quality names originally
came out with massive discounts so it looks like
they’re tightening dramatically. But in reality
they’re still trading wide to the secondary mar-
ket,” noted a portfolio manager.
Further helping to bolster demand for new is-
sues, the institutional loan pipeline has dwindled
amid the usual summer lull. Last week, the
forward calendar dropped from more than $26
billion to $18 billion as a handful of existing
syndications closed and few new ones appeared
Academy Sports fl exes down amid continued loan demandto take their place.
“A lot of deals have been pushed until after
Labor Day,” the portfolio manager said. “So
whatever deals there are aren’t facing too much
competition for investor attention.”
Helped by its Ba2 rating profi le, OM Group
last week cut pricing on its cross-border $900
million loan backing its acquisition of Germany’s
Vacuumschmelze GmbH & Co. The interest
margin on the $350 million term loan B was
reduced to LIB+425 from initial price talk of
LIB+475-500. In addition, the margin on the
$250 million (equivalent) euro term loan B was
cut to EUR+475 from EUR+500.
And Capsugel shaved 50bp off the coupon on
its $920 million covenant-lite loan and tightened
its OID by another 50bp. The B1/BB- rated facility
priced at LIB+400 with a 1.25 percent Libor fl oor
and a 99.5 OID for a yield of around 5.4 percent.
And when the loan broke for trading last
Wednesday, it was quoted 100.25-100.75.
“There’s still a lot of cash in the system right
now,” the portfolio manager said. “So guys are
going into these deals pretty aggressively.”
THE WEEK IN NEWS
Immucor preps $700M LBO fi nancing
for launch
Immucor Inc is preparing to launch a $700
million credit facility Tuesday via JP Morgan
and Citigroup to back its $1.97 billion buyout
by TPG Capital, according to sources familiar
with the transaction.
The fi nancing includes a $100 million, fi ve-year
revolver and a $600 million, seven-year senior
secured term loan. Earlier, Immucor tapped a
$400 million senior unsecured bridge facility
to assist in the $1.1 billion fi nancing package.
Immucor manufactures and sells reagents and
systems used by hospitals, reference laboratories
and donor centers to detect and identify certain
properties of the cell and serum components of
blood prior to transfusion. – C.T.
Leveraged fi nance co-heads leave
Nomura
Julie Persily and Steven Seltzer, co-heads of
Nomura Securities’ leveraged fi nance group,
have both left the fi rm, sources said.
Persily and Seltzer were named co-heads of
the business in July 2010.
Before Nomura, Persily was at Citigroup where
she was co-head of leveraged fi nance. Seltzer
joined Nomura from North Sea Partners. – C.F.
Sealed Air unseals price talk;
outlines TLB structure
Sealed Air Corp unveiled price talk Tuesday
on the $1.45 billion pro rata portion of its $4.5
billion acquisition fi nancing led by Citigroup.
The deal, which backs Sealed Air’s $4.9 billion
acquisition of Diversey Inc, consists of a $700
million, fi ve-year revolving credit facility and a
$920 million, fi ve-year term loan A, of which $80
million will be a Canadian dollar denominated
equivalent, sources said.
Price talk on the pro rata portion is LIB+250
with no Libor fl oor or OID.
Commitments are due August 10.
Alongside the pro rata portion, Citi, at a later
date, will syndicate a $1.3 billion seven-year
term loan B.
As previously reported, Sealed Air expects to
have $3.8 billion fully funded at closing and will
leave the combined companies with pro forma
net leverage of 4.4 times.
Sealed Air manufactures bubble wrap and
other protective materials for food and industrial
packaging. – C.T.
Level 3 launches $650M TLB for
launch
Bank of America Merrill Lynch and Citi
launched Thursday a $650 million term loan
B for Level 3 Communications, sources said.
In an SEC fi ling from April, Level 3 had said it
would raise the $650 million TLB alongside a
$1.1 billion senior unsecured bridge loan. At the
time, the company had also said that the TLB
would be covenant-lite and would be talked at
LIB+400 with a 1.5 percent Libor fl oor and a
99 OID. The bridge loan would be priced at 14
percent, the fi ling said.
Proceeds are to back Level 3’S acquisition of
Global Crossing for about $1.9 billion. – S.M./C.T.
LPS sets price talk on TLB
Lender Processing Services (LPS) set price talk
of LIB+325-350 with a 1 percent Libor fl oor and
a 99.5 OID on its TLB, sources said. The deal,
which was launched Thursday by JP Morgan,
includes a $400 million revolver, a $350 million,
fi ve-year TLA and a $550 million, seven-year
TLB. Proceeds are to refi nance debt.
In 2008, LPS raised a $510 million TLB, a $700
million TLA and a $140 million revolver as part
of its spin-off from Fidelity National Informa-
tion Services.
LPS is a provider of integrated technology
and services to the mortgage and real estate
industries. – S.M.
– by Caleb Frazier
GOLD SHEETS –August 1, 2011 18
THE WEEK IN NEWS
Dynegy bumps pricing to fi ll book despite threat of lawsuitU.S. independent power producer Dynegy Inc,
after failing to fi ll the book on its $1.7 billion
refi nancing deal by the July 22 commitment
deadline, last week raised pricing and revised
tranching to better match investor demand for
the paper, sources said.
The company’s covenant-lite refi nancing is
split between two facilities, the “GasCo” and
“CoalCo” loans. Price talk on the “GasCo” loan
was bumped up by 125bp, and the loan is now
expected to be sold at a wider discount. Ad-
ditionally, $200 million was shifted from the
“GasCo” loan to the “CoalCo” facility.
The now $1.1 billion “GasCo” and $600 million
“CoalCo” facilities are priced in line with each
other. Both offer lenders a spread of LIB+775
with a 1.5 percent Libor fl oor (unchanged) and
an OID of 98.
“This deal is priced to sell,” said one portfolio
manager, of the revised pricing. “I don’t think
they’ll have any problems selling.”
Following the changes, sources said Dynegy
had received several sizable tickets at the new
talk.
However, at launch, the proposed $400 million
“CoalCo” loan, the smaller but initially more
richly priced of the two, was selling more suc-
cessfully than the proposed $1.3 billion “GasCo”
loan that received a tepid response from inves-
tors, sources said.
That same day, two lawsuits were fi led against
the company, further complicating the syndica-
tion process that marks the fi rst step in Dynegy’s
restructuring efforts.
The restructuring is led by the company’s two
largest shareholders, investor Carl Icahn and
hedge fund Seneca Capital.
Proceeds from the two new credit facilities will
be used to refi nance debt at Dynegy Holdings
Inc (DHI). However, under the terms of the credit
facilities, Dynegy’s gas and coal assets have
been ring-fenced, moving them away from the
– by Leela Parker, Clinton Townsend
DB markets $1.88 billion Silgan refi
Deutsche Bank is in the market with a $1.88
billion refi nancing for Silgan Holdings, sources
said. The facility comprises an $800 million, fi ve-
year revolver and multi-tranched term loan A.
The TLA is split between a $520 million
tranche, a 335 million euro piece, and a C$81
million tranche. All three tranches have six-year
maturities.
The $520 million has been upsized from $400
million.
Pricing is tied to a leveraged base grid and
opens at LIB+175.
The facility was expected to close last week.
In April, Silgan lined up a $4.5 billion debt
fi nancing package also via BofA Merrill Lynch
to back its acquisition of Graham Packaging.
It included an $800 million fi ve-year multicur-
rency revolver, a $900 million six-year TLA, a
$2.3 billion, seven-year TLB and a $500 million
senior unsecured bridge loan.
The loan was cancelled when Silgan was outbid
by Reynolds Group Holdings. – M.S.
La Paloma offers price talk on
$424M refi
La Paloma, which launched via Bank of America
Merrill Lynch on July 21, offered price talk on its
$409.2 million refi nancing facility, according to
sources familiar with the deal.
The deal includes a $15 million fi ve-year revolv-
ing credit facility and a $299.2 million six-year
fi rst-lien term loan guided at LIB+525-550 with
a 96-97 OID. Also included is a $110 million
seven-year term loan guided at LIB+875 with
a 97 OID. Both fi rst and second-lien tranches
have a 1.5 percent Libor fl oor.
Proceeds are to refinance existing debt,
prefund a debt service reserve, fund 2011-2013
major maintenance and cash collateralize $30.2
million of LCs.
La Paloma Generating owns and operates a
natural gas-fi red power generation facility in
Kern County, California. – C.T.
Fogo De Chao sets price talk on
$205M facility
Fogo De Chao set price talk Tuesday on its $205
million credit facility at a bank meeting with JP
Morgan, sources said. The new facility consists
of a $10 million fi ve-year revolving credit facil-
ity and a $195 million seven-year term loan B.
Price talk on the TLB was guided at LIB+475-
500 with a 1.25 percent Libor fl oor and a 99 OID.
Proceeds from the facility will fi nance the
acquisition of shares from current shareholders.
Brazilian private equity fi rm GP Investments cur-
rently owns about 35 percent of Fogo De Chao.
Fogo De Chao is a churrascaria restaurant
chain in the U.S. and Brazil. – C.T.
MSC Software sets price talk on
dividend recap
MSC Software Corp set price talk Thursday at
LIB+500 with a 1.5 percent Libor fl oor on its $215
million six-year fi rst-lien term loan, according to
sources familiar with the deal.
An OID has yet to be determined. However,
lenders will enjoy a 101 soft call for one year.
Proceeds from the Bank of America Merrill
Lynch-led loan will fund a dividend to spon-
sors Symphony Technology Group and Elliott
Management Corp, who bought MSC in 2009
for $360 million.
MSC Software manufactures design related
software which helps engineers create virtual
prototypes. – C.T.
CHI Overhead Doors sets price talk on
buyout loan
Price talk is out on CHI Overhead Doors’ buyout
loan, sources said.
The $127.5 million, six-year fi rst-lien term loan
is talked at LIB+525 with a 1.5 percent Libor
fl oor and a 99 OID. The $51 million, 6.5-year
second-lien term loan is talked at LIB+925 with
a 1.5 percent Libor fl oor and a 98 OID.
As reported earlier, the deal was launched
Wednesday by GE Capital and Wells Fargo. The
rest of the credit is fi lled out by a $25 million,
fi ve-year revolver.
Proceeds are to back CHI’s sale to Friedman,
Fleischer & Lowe from JLL Partners.
CHI Overhead Doors is a garage door company
and a manufacturer of residential sectional
garage doors, as well as commercial sectional
and rolling steel. – S.M.
— cont’d from p. 17
debt laden DHI to create two new entities with
no existing debt or liabilities.
Ring-fencing ensures that the assets securing
the “GasCo” and “CoalCo” facilities are bank-
ruptcy remote in the event of a DHI bankruptcy.
In other words, only the new lenders to these
facilities have a claim against the assets.
LibertyView Capital and PSEG, holders of
lease obligations guaranteed by DHI, argue in
two separate lawsuits that the creation of the
bankruptcy remote entities increases the risk of
default and violates DHI’s guarantee of the lease
obligations in the event of a default.
“From a plain reading of the covenants these
lawsuits are a bit of a stretch,” said Chris Chaice,
analyst at Covenant Review, an independent
credit research fi rm.
A Delaware court was expected to rule by this
past Friday on whether Dynegy’s proposed debt
restructuring should be put on hold, Reuters
reported last week, citing a Dynegy spokesman.
GOLD SHEETS – AUGUST 1, 2011 19
THE WEEK IN NEWS
(NEWS cont’d on page 22)
Rock Ohio Caesars sets price talk on
$125M TL
Price talk on Rock Ohio Caesars’ $125 million,
six-year fi rst-lien term loan is LIB+650 with a
1.5 percent Libor fl oor and a 98 OID, sources
said. The loan is non-callable for two years and
thereafter callable at 102, 101. The deal was
launched Wednesday by Credit Suisse, Deutsche
Bank and Citadel.
Rock Ohio Caesars is a joint venture between
Caesars Entertainment Corp and Rock Gaming.
The new facility consists of a $25 million fi ve-
year revolving credit facility, the $125 million
six-year fi rst-lien term loan, and a $125 million
six-year delayed-draw term loan.
Rock Ohio Caesars will also have $50 million
of incremental capacity in either the revolving
credit facility or the term loan.
Alongside the incremental capacity, Rock
Ohio Caesars will also have the ability to issue
an additional $300 million in loans, coined the
“Project Tranche,” which will allow for up to 50
percent of the issue amount to be pari passu
with the fi rst-lien term loan.
Price talk has yet to be determined. However,
the loan will be non-callable for two years, then
callable at 102, 101 in subsequent years.
Proceeds from the new credit facility will back
the development and operation of two casinos
in Ohio. – S.M.
SNL Financial launches $215M loan
Credit Suisse launched Wednesday a $215
million loan backing SNL Financial’s buyout by
New Mountain Capital, sources said. The deal
includes a $30 million revolver and a $175 million
covenant-lite term loan.
New Mountain Capital is acquiring a majority
stake in SNL.
SNL Financial is a provider of fi nancial informa-
tion on more than 4,000 public companies and
50,000 private companies. – S.M.
Bojangles sets price talk on
$215M LBO facility
Bojangles Restaurants set price talk Tuesday
on its $215 million credit facility backing its
buyout by Advent International, according to
sources familiar with the deal.
The $190 million, six-year term loan was guided
at LIB+625 with a 1.25 percent Libor fl oor and
a 99 OID.
Alongside the TL is a $25 million, fi ve-year
revolving credit facility.
Sole lead, Jefferies, is asking commitments
by August 8.
Advent is said to have committed a 45 percent
equity check for the transaction which would
value the deal at roughly $390 million.
Bojangles is a franchised chain of fried chicken
restaurants throughout the United States. – C.T.
Ally Commercial hires middle market
veteran Acosta
Ally Commercial Finance LLC announced
that Luis Acosta has joined the middle market
lender as senior managing director. Acosta will
report to George Triebenbacher, president of
Structured Finance.
Acosta has more than 25 years of debt invest-
ing experience, principally engaged in middle
market sponsor fi nance. He has held various
business development, transaction execution
and leadership roles, working extensively with
private equity fi rms and intermediaries.
Previously, Acosta was head of Business
Development for the Capital Solutions Group
at PineBridge Investments. He has also served
as co-head of Sponsor Finance at Silver Point
Capital. In addition, Acosta spent 14 years at GE
Capital (including Heller Financial) in various
capacities, including transaction execution, port-
folio management and business development.
Ally Commercial Finance provides fi nancing,
including asset-based loans and enterprise value
to meet the needs of equity sponsors and middle
market companies. Ally CF lends to manufactur-
ers, distributors, retailers, and service companies