SunCal Companies' $85 million second-lien term loan broke in the secondary market, but did not trade, according to dealers. The second lien broke at 100 1/8. The company's $160 million first-lien loan, priced at LIBOR plus 3 1/4%, also broke at 100 1/8 and traded at that level. Pricing on the second lien could not be determined.
SunCal is a Californian real estate developer. A trader said the name is unpopular because of the large amount of real estate financings in the market. "There has been a ton of real estate done. There is too much of it," he said.
Standard & Poor's rated the first-lien loan BB- and the second lien B+. The outlook is stable. James Fielding, an analyst at S&P, said SunCal is the largest private land developer in California and has a long operating history in the market. He said that the Californian real estate market is competitive, but is profitable for those companies that are well capitalized.
The financing will be used to repay $62 million of existing debt, pay a $144 million equity dividend and $3 million will be used for development expenditures, according to Fielding. Officials at SunCal did not return calls.