Search results for

Bear Stearns and Merrill Lynch were betting that Penn National Gaming's earnings call last Wednesday would spark an uptick in commitments on the company's $600 million "B" piece. Last week, pricing was flexed up from LIBOR plus 31/ 2% to LIBOR plus 4%, while the pro rata spread increased from 3% to 31/ 4% over LIBOR, according to a banker familiar with the deal. The "B" had been half filled before the pricing boosts and the banker stated that momentum had picked up since the changes. Both big and small tickets have rolled into the loan since Penn National's retail launch, however the banker would not comment on updated levels.

Banc of America Securities has hired Dave Fergione, the former head of high-grade, fixed-income at BNP Paribas in New York to the new position of managing director, corporate bond trading, based in the firm's Charlotte, N.C., headquarters. Fergione's move marks his second stint with Banc of America. He left BNP at the end of last year (BW, 12/23) in what he characterized as a mutual decision during an interview last Monday.

Bank of America's fully underwritten $235 million deal for National Bedding Company has closed after some tranche shifts, including an increase to $140 million on the previously $100 million "B" piece. A banker familiar with the deal said that the five-and-a-half-year "B" had been oversubscribed at the initial level and there were no plans to increase the size of the credit. The "A" loan was reduced from $75 million to $35 million, he added, while the revolver stayed at $60 million. The five-year senior secured pro rata priced at LIBOR plus 3%, while the "B" priced at LIBOR plus 33/ 4%. National Bedding's leverage figures are 3.3 times senior and 3.4 times total, the banker added.

Burns Philp & Co. is relying heavily on debt to finance its bid for the Australian and New Zealand consumer-branded packaged food company, Goodman Fielder, according to Moody's Investors Service. Burns is looking for a A$100 million revolver, a A$1.3 billion "A" term loan, a US$375 million "B" piece and a US$150 million senior subordinated notes issue to fund the A$2.4 billion (US$1.4 billion) unsolicited cash offer for Goodman (LMW, 2/10). Noting the increased leverage as a result of the acquisition, Moody's has assigned a B1 rating to the new credit facility and a B3 rating to the subordinated notes.

Calpine Corp.'s bank debt last week moved up a couple of points, trading as high as 91-92, after the company announced that restructured agreements with its turbine manufacturers will allow the company to avoid $3.4 billion in future capital expenditure commitments. The restructuring will enable Calpine to deal with its capital expenditure issues, as well as reduce its off-balance sheet commitments, noted one buysider. Following the company's earnings announcement on Thursday, the market for Calpine's paper settled in the 90-91 context.

International Transmission Co.'s $325 million credit was oversubscribed last week and pricing and tranche changes were not being ruled out by lead CIBC World Markets. A banker familiar with the deal would not divulge any planned changes to the deal, which backs Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners' $610 million all cash buyout of International Transmission from parent DTE Energy. The fully underwritten credit includes a $185 million term loan and a $15 million revolver at the operating company level, with pricing in the LIBOR plus 21/ 2% range. There is also a $125 million loan at the holding company level priced between LIBOR plus 31/ 2-4%. A CIBC official and Trimaran spokeswoman declined to comment, while a KKR official could not be reached by press time.

CommScope has completed a new $100 million revolver amid a tough market for the company's cable product business. The deal was not oversubscribed, said Jerald Leonhardt, executive v.p. and cfo, but he stated that the company did not want more than the $100 million amount. He noted that the company's previous $250 million revolver had been in excess of what CommScope had needed. He said about 20 investors signed onto the last deal, while five signed onto the new credit. "We were very price sensitive," he said, adding that the lead bank, Wachovia Securities, was responsive to the company's interest rate concerns. The deal has a spread of 21/ 2% over LIBOR.

WEEKLY UPDATE

Activity in the Australian ABS market is picking up, with two deals priced in the past week, and another two due shortly. Last Friday Westpac and SG priced the debut issue for Greater Building Society (GBS). GBS originates A$700m of mortgage loans a year in New South Wales.

Two Australian real estate investment trusts, Mirvac Group and Macquarie ProLogis, raised fresh capital this week, bringing to five the number of such deals so far this year. The latest issues from Australia confirm that the Asia Pacific region continues to outperform the European and US markets in terms of new issuance.

Mitsubishi Tokyo Financial Group (MTFG), Japan's biggest banking group by market capitalisation, has embarked on a global share offer to sell up to ¥412.5bn ($3.45bn) of stock. Most of the transaction will comprise new shares and the entire proceeds will go to MTFG's balance sheet. Excluding issues from government or quasi-privatised companies, the placement is the largest new share offering from Japan to date. It is also the first time in 13 years that any of Japan's largest banks have made a capital increase of new ordinary equity.

While MTFG is on the road to raise as much as ¥412.5bn ($3.45bn), Japan's three other big banking groups are seeking alternative funding sources. Sumitomo Mitsui Financial Group and Mizuho Holdings are trying to sell preference shares to customers, close shareholders or would-be partners. UFJ late last year hived off ¥1tr of dud loans. SMFG was the first to announce efforts to raise fresh capital. In mid-January, Goldman Sachs announced it was buying ¥150.3bn ($1.27bn) of new convertible preference shares in the bank.