After investors balked at a 50 basis point cut on the $1.275 billion term loan "B" of Allied Waste Industries, JPMorgan lowered the cut 25 basis points, much to the relief of investors. There is a pricing cut back down to LIBOR plus 1 1/2% if total leverage goes below 4.25 times.
One portfolio manager who was particularly disturbed by what this deal could mean for the market and suggested a 25 basis point cut, was still not overly enthused by the deal (CIN, 4/3). "At 175, it's better, but it still looks very thin on a historical basis and I'm still not convinced for CLOs that it is economic for 3-B credits to be priced at that." A call to Peter Hathaway, executive v.p. and cfo, was not returned by press time. A JPMorgan spokesman declined comment.