Search results for

Goldman Sachs allocated the $750 million second priority term loan for Calpine Corp. late last week in conjunction with its $3.3 billion debt package. The entire bond and bank deal was increased from an initially planned $1.8 billion after receiving red hot reception in the debt markets. A banker familiar with the loan said over 100 investors came into the term loan from all corners of the market. The four-year loan and $500 million of four-year floating-rate notes were both priced at LIBOR plus 53/4%. Calpine also priced $1.15 billion of 81/2% fixed-rate senior secured notes due 2010 and $900 million of 83/4% senior secured notes due 2013.

Conseco's bank debt has been trading above the 96 range as the company winds up its bankruptcy proceedings. One trader explained that there is increased interest in the name as investors bet on the chance that the preferred convertible equity portion of the bank debt holders' recovery will be refinanced before holders have the option to convert to common stock. The company has about $1.5 billion of claims under its pre-petition credit facility. Bank of America is the administration agent on the deal.

Fleming Companies term loan "B" soared to the 94-96 range from the 88 level after the company announced that it has signed a definitive agreement to sell its wholesale grocery business to C&S Wholesale Grocers for an estimated purchase price of $400 million. But investors are holding onto the debt and some believe that the company could be headed toward a liquidation type of reorganization. "I don't think that Fleming is going to exist at the end of the day," noted one dealer. While the company continues to support the operations of its other business segment, its Core-Mark convenience business, Fleming has acknowledged that it has received "expressions of interest" from potential financial and strategic buyers for that business.

Global Imaging Systems, a provider of office technology solutions to middle-market businesses, recently completed a debt overhaul that included a $230 million credit facility and a $57.5 million convertible senior subordinated note issuance. The company directed a portion of the proceeds from the credit facility to redeem $100 million of 103/4% high-yield notes. Altogether the transactions allowed Global Imaging to take advantage of the favorable interest rate environment to replace high-priced debt, extend maturities and reduce debt, said Ray Schilling, senior v.p. and cfo. "Debt is [now] less a piece of the balance sheet," he noted.

Life Investment Management's debut cash flow collateralized loan obligation. The approximately $350 million deal, called NYLIM Flatiron CLO 2003-1, is said to be about 80% ramped up, according to a source. Calls to bankers at Goldman and a NYLIM portfolio manager were not returned. NYLIM is a subsidiary of New York Life Insurance Co., which has $160 billion in assets under management. The firm has more than $1.1 billion in loan assets, according to Standard & Poor's. The equity slice of the deal is $36.75 million.

HealthSouth bank debt shot up out of the high 70s into the 88-90 range after the company hosted a conference call last Monday to update its stakeholders on the state of its business. Traders said small pieces of the name changed hands within that context and one suggested that the bank debt could be worth par. "The market seems to be pretty bullish," said one dealer, regarding HealthSouth's debt.

The $475 million "B" loan backing the acquisition of school yearbook and class ring-maker Jostens had already gained about $1.2 billion in commitments as of late last week, according to bankers. The tranche is a part of a $650 million facility being used to partially finance the $1.2 billion acquisition. Credit Suisse First Boston and Deutsche Bank are the lead arrangers shopping the credit. Ring Acquisition Corp.--a newly formed company controlled and managed byCSFB Private Equity and its private equity fund DLJ Merchant Banking III LP--is acquiring Jostens from Investcorp, MidOcean Partners, First Union Leveraged Capital and Northwestern Mutual Life Insurance (LMW, 6/23).

Softer sales paired with anticipated higher debt levels have led Fitch Ratings to lower Levi Strauss & Co.'s secured bank facility rating to BB- from BB. The ratings outlook is negative. Levi Strauss had $368 million in bank debt outstanding as of May 25. The ratings reflect that while the company originally expected sales for fiscal 2003 to grow 2-5%, sales are now expected to be flat due to weak consumer spending, according to Fitch. Also, Levi Strauss' primary means of distribution, the department store channel, has been consistently weak in 2003 as consumers diversify their shopping patterns.

Marc Baum is the chief operating officer for The Seaport Group, a research and relationship-driven brokerage boutique dedicated to stressed and distressed bonds, bank debt, trade claims and equities. In the last year, the firm has used a series of hires to build up its efforts in dealing with off-the-run bank loans and large loan sales, trade claims and the equity of reorganized companies.

Loan market players are hoping the increase in merger and acquisition activity over past weeks will continue to intensify and stir up a significant amount of much needed new bank credits. But while some sense the M&A pot is brewing up all sorts of deals, others wonder if many of the big transactions will deliver significant loan supply. Some of the deals are hostile, so they have "less than a 50/50 chance of being completed," one investor noted.

Mirant Corp.'s bank debt continued to trade actively last week as the debt dropped and then bounced back some by week's end. The debt sank into the 60s with the maturity on its $1.125 billion revolver looming and the company still trying to complete its debt overhaul plan. But the bank debt did regain some ground late in the week as the company amended the package that will be given to lenders for their cooperation in the restructuring plan.

The $250 million "B" loan for Oriental Trading oversubscribed ahead of the bank meeting last Wednesday, with more than $260 million in hold-level commitments coming into the official launch and up to $350 million in tickets by press time, a banker said. Sole bookrunner BNP Paribas is shopping the $290 million recapitalization credit for the direct marketer of novelties, toys, party supplies and other related products. The deal will go toward refinancing holding company OTC Holdings' preferred stock, noted Anthony Choe, a director at Oriental Trading and a principal at the company's leading private equity sponsor, Brentwood Associates.