Search results for

The Carlyle Group is ramping up a new $400 million collateralized debt obligation in a market that has left managers on recent deals challenged by the current dearth of available attractive credits. "We are really pleased with the execution of the deal and now the real challenge is to find assets," said Linda Pace, portfolio manager at Carlyle. The fund's latest deal, Carlyle High Yield Partners IV, is a deal which will comprise 90% leveraged loans and 10% high yield bonds. Pace said the fund is looking to have 45% of the deal's assets ramped up in roughly the next two weeks before the deal's close.

More than $15 million of Centennial Cellular bank debt crept up to the 81 level last week despite mixed investor opinions on the name. Market players explained that the pricing on the wireless company's bank debt had been pushed down by a few dealers dumping the paper in the mid 70s almost a month ago. The name has since recovered some ground with a $25 million auction at 77 on March 22, another $5 million reported to have moved to retail in the 78-79 context early last week and other trades were reported in the 80-81 by the end of the week.

Radio-giant Cumulus Media has chosen J.P. Morgan and Bank of America to lead a $400 million facility to refinance its former Lehman Brothers-led $175 million credit. The banks were chosen in part because of their capacity to offer the larger credit, said Dan O'Donnell, v.p. of finance for Cumulus. The banks approached the company before the old credit's maturity and the re-structuring process began when it was clear the company would go forward with the acquisition of Aurora Communications and the broadcasting operations of DBBC, he added. The company's cfo, Marty Gausvik, also had a previous relationship with J.P. Morgan.

Fleet Bank and Bank of America are set to launch a $300 million credit for Team Health on April 9 backing the $147 million acquisition of Spectrum Healthcare. The credit, which includes a $150 million "B" term loan, also refinances $110 million in existing debt led by the two relationship banks. A decision was taken to finance the acquisition with bank debt, rather than bonds or equity due to perceived investor appetite for healthcare in the bank market.

Société Générale is offering 1/4% for commitments to the National Basketball Association's Charlotte Hornets' $40 million term loan. Fees on the $35 million pro rata are 3/4% for $20 million and 1/2% for $10 million. The deal partially backs the proposed move to New Orleans, following a request to the NBA to relocate the franchise that is almost certain to go through at this point, said bankers.

Massive buyside demand for the SunTrust Bank and BANK ONE led "B" term loan for Atlanta-based Printpack pushed pricing down from a starting point of LIBOR plus 31/ 4% to LIBOR plus 23/ 4% during syndication. "Almost $900 million came in on the targeted $200 million credit," said Trip Ceitter, treasurer of Printpack. "Initially we even considered going out at LIBOR plus 31/ 2%," he added. The seven-year "B" piece was upsized from $50 million to $250 million, while the pro rata was reduced from $200 million to $150 million. "The pro rata was full at $200 million, but we decided to move to the "B" as pricing had come down to similar levels [as the pro rata] and the maturity was longer," he explained.

KBC Bank has returned to the market with its $252 million Perryville Power construction loan for Mirant and Lousiana utility Cleco, and is looking for retail participants. A banker familiar with the deal said the original syndication was suspended last summer due to an issue over air permits, which have recently been received. About 15 banks are said to be looking at the loan, after 23 banks attended the meeting two weeks ago.

Kmart's bank debt traded out of retail with a $7 million auction at 68 last week as investors are more certain that company subsidiaries, which guarantee the bank debt, have sound value. The pricing on the name has fluctuated weekly since the company filed for bankruptcy in January. The name fell as low as 53 in mid-February and rose as high as 70-71 two weeks later.

Magnum Hunter Resources has launched the retail round of its $275 million loan backing its merger with Prize Energy. The company has wrapped a successful bond offering and managing agent round and this is the final piece to be completed. According to a banker familiar with the situation, four banks have come in at the senior managing agent level, in addition to leads Deutsche Bank, CIBC World Markets and BNP Paribas. Pricing on the three-year borrowing-base facility is LIBOR plus 21/ 4%, but the borrowing base transaction still carries too low a spread to be of interest to non-bank players, according to the banker.

John Wotowicz, managing director and head of European leveraged finance at Morgan Stanley, will move back to New York to assume "a very senior role in covering some of the firm's most important leveraged finance clients," according to a senior firm official, who would not be more specific. The reassignment of Wotowicz is the latest move in an effort by the company to rebuild its leveraged finance business. Morgan Stanley fell from fourth place in the U.S. high-yield underwriting league tables in 2000 to sixth place in 2001. So far this year, the firm is in eighth place, according to Bloomberg. Competitors say it became very cautious after it suffered some high profile losses in its trading group. The official says additional changes in the leveraged finance group will be announced in the next few weeks, but he would not give further details. "It's more of an incremental repositioning than a wholesale restructuring," he says.

Morgan Stanley has created a new management structure for its corporate bond research group, organizing analysts into teams across sectors and across the credit curve from high-yield to high-grade. The goal is to help investors make relative value comparisons across industries, and across the increasingly narrow divide between junk and high-grade credits, according to Bill Reiland, the firm's head of U.S. credit research. Morgan Stanley started to address the gap between high-yield and high-grade last year (BW, 8/19).

Orrick, Herrington & Sutcliffe has expanded its structured finance group by hiring Michael Miran in a "of counsel capacity," a position junior to partner. He will focus on insurance-related securitization, says Ed DeSear, partner, who heads a 30-person structured finance unit for the New York-based law firm and to whom Miran will report. In his new function, Miran will help structure securitizations utilizing insurance products and insurance-like structures. His main focus will be to provide credit enhancement, or bring lower-rated securities to a higher rating level by providing credit support to the structure. The position is a newly created one reflecting the expansion of the securitization practice within the firm, says Miran.