Bank of America is leading a $275 million second-lien term loan for NES Rental Holdings that is anticipated to price in the LIBOR plus 500 range. "There are some tough underlying trends in that industry," one buysider said, commenting on the commercial rental equipment sector. NES was known as National Equipment Services until filing for bankruptcy in June 2003 due to a heavy debt burden and significant near-term maturities. The company emerged from Chapter 11 in February.
"The company is refinancing in large measure to get a stable capital structure where [the debt] is not forced to amortize heavily," the investor said. He had expected the company to do a traditional bank deal but said, "I guess given the strong demands for second liens in the market it makes sense for them." Standard & Poor's has assigned a B rating to the credit and a recovery rating of 3, indicating a 50-80% chance of recovery in the event of default. A B of A spokeswoman and Michael Milligan, NES' cfo, did not return calls.