With few deals breaking in the secondary market last week, the mammoth $1.75 billion term loan for Fresenius Medical Care got a boost with a couple of hundred million dollars worth of paper trading on the break, a dealer said. It traded well despite a spread--LIBOR plus 1 3/8%--that is considered low. "It is the reality of the market," said a trader commenting on the popularity of the deal. "Yields are tightening up, but people still need to put money to work."
The loan is part of Fresenius' $4.75 billion credit facility, which also consists of a $1 billion revolver and a $2 billion term loan "A," which is trading at 100 1/8. Both are priced at LIBOR plus 1 3/8%. The term loan "A" launched at the end of June, but the term loan "B" was delayed due to regulatory issues. The deal backs the company's acquisition of Renal Care Corp., also a dialysis company, and will pay down $1.2 billion of existing debt (CIN, 2/06). A Fresenius spokesperson did not return calls by press time.