Restaurant chain Buffets Holdings' $530 million term loan debuted in the secondary market at 100 1/2-3/4. The Credit Suisse-led deal backs the company's acquisition of Ryan's Restaurant Group for $876 million and will also pay down debt.
A buyside trader, who bought into the loan, said the company's acquisition of Ryan's will benefit the Minn.-based restaurant chain. "It is a stable, predictable business. The acquisition will create synergies," he said. The term loan has a LIBOR plus 3% coupon. Moody's Investors Service assigned a Ba3 to the term loan, which matures in 2013. It confirmed a B2 corporate family rating reflecting the company's improved scale and scope and potential cost savings from the acquisition. Constraining the ratings are its high financial leverage and the challenges of operating in the highly competitive family dining segment of the restaurant industry. Keith Wall, cfo, did not return calls.