Ford Term Loan Drops Under Par
Ford Motor's $7 billion term loan was bid as low as 99 7/8 last week as sellers outnumbered buyers on the new financing. Dealers said the large size of the issue was one reason it fell under par. It also fell because some investors in the term loan also sold their positions to buy into Ford's revolving credit facility, which traded at a deep discount to the term debt, said a dealer. A Ford spokeswoman declined to comment on the trading of the company's debt.
Boston Gen Breaks, Second Lien Soars
Boston Generating's downsized $350 million second lien soared to 102 1/2-3/4 after it broke in the secondary market at 101-102. Its $1.13 billion first-lien term loan broke at 100 1/2-3/4. Credit Suisse and Goldman Sachs lead the deal, which refinances existing debt and pays a $1 billion dividend to its investor group (CIN, 12/11).
The second lien was originally $400 million, but $50 million was shifted to the term loan, which has a lower coupon. The credit line includes a $250 million synthetic letter of credit and a $70 million revolving credit facility. Pricing was slashed by 75 basis points on the first and second liens. The first lien priced at LIBOR plus 2 1/4%, while the second lien ended up at LIBOR plus 4 1/4%. Boston Gen is a wholly owned subsidiary of EBG Holdings. After it completes its debt restructuring, venture capital firm K-Road will own 9.9% of the power plant. Officials at EBG and K-Road did not return calls.
Luggage Credit Debuts
Samsonite Corp.'s $450 million term loan broke at 100 1/2-3/4 in the secondary market. Merrill Lynch, Goldman Sachs and Deutsche Bank lead the financing, which partly funds a $175 million special dividend to shareholders. The term loan is part of a $530 million credit line, which includes an $80 million revolver. A Samsonite spokeswoman did not return calls.