The term loan "B" for Burlington Coat Factory traded above par for the first time since it broke last April, according to a dealer. The $900 million term loan was trading around parpar 1/4. One trader joked that the cold weather caused the debt to trade up, but noted its bonds had been running up and the term loan was probably following. It's 10 1/2% '14 notes were trading around 102.250 last Thursday up from 98.875 Feb. 1, according to Markit.
Bank of America and Bear Stearns launched the $1.575 billion deal backing Bain Capital's $2.06 billion acquisition of the company in March 2006 (CIN, 3/24). The deal initially comprised an $800 million revolver, a $775 million term loan and $500 million of high-yield bonds. The term loan is priced at LIBOR plus 2%, while the revolver is set at LIBOR plus 1 1/2%. To take advantage of the more favorable rate on the loans, $125 million was shifted to the term loan from the bond component (4/21). The term loan broke at par but fell to 99 7/8 due to tight pricing. Poor coat sales and a covenant-lite structure caused the paper to drop as low as 96 (6/26). Calls to a spokeswoman were not returned.