The market for The NutraSweet Company's "B" loan is down roughly seven to nine points since the end of March, according to LoanX, and market players are expecting weaker numbers from the aspartame producer. The company recently received an amendment from its bank group to adjust its financial covenants to fit more appropriately with the company's plans, explained Adam Suttin, a partner with J.W. Childs Associates, which purchased NutraSweet in 2000. He noted that NutraSweet was not in default; rather the amendment was a pre-emptive measure. Suttin declined to be specific on which covenants were affected.
The market for the "B" loan was 91 93 last week, falling from the 99 1/2 100 1/4 range, where it was quoted at the end of March, according to LoanX. Traders said the name rarely, if ever, changes hands. The bank debt originally comprised a $310 million senior secured credit and a $50 million second lien term loan. The credit facility, led by Deutsche Bank, has been reduced by about two-thirds since the acquisition, noted Suttin. Some of the largest loan investors are said to own NutraSweet's bank debt.
At the end of last year, Moody's Investors Service released a report noting that lower pricing has begun to impact NutraSweet's results. Although Moody's cites concerns with the company's lack of diversity in product and customer base, it did state that NutraSweet's cash flow generation was strong and the leverage was 1.4 times at the end of December. Moody's rates the senior secured credit facility at Ba3 and the second lien loan at B1.