Eastman Kodak Company's term loan "B" broke in the secondary market at 100 3/8 and then dropped to as low as 99 7/8. The breaking of the loan was partly overshadowed by the market panic over Refco. "The market has been weaker. Everything is trading closer to par," said a trader. The pricing on the term loan also put off investors, traders said. Kodak's $1 billion term loan and $500 million delayed-draw term loan are priced at LIBOR plus 1 3/4%. A trader said higher coupons are expected for high-yield credits. "It is the sentiment in the secondary market that people want to see higher prices," he said. A Kodak spokesman declined to comment.
Kodak's poor third-quarter results have added to concern over the company's performance. It posted a $1.03 billion net loss, compared with a $458 million profit a year ago. The loss is mostly becasue of a $900 million charge against net deferred tax assets in the U.S. The company's debt has increased $1.24 billion, reflecting more than $1.5 billion in acquisitions. The new term loans will be used to repay existing company debt related to the acquisition of Creo, which was completed in June (CIN, 9/05). Moody's Investors Service assigned a Ba2 rating to both the company's term loan "B" and its delayed-draw term loan "B." The rating reflects the decline in Kodak's consumer film business and the risks of moving from the traditional print business to digital services.