Some investors are eyeing the break of the Neiman Marcus "B" term loan. When the loans launched in September, investors jumped into the deal with fervor, but some are skeptical of how it will do once it breaks because of the high leverage in the deal. One investor said the sheer size of the loan could hamper its trading ability but does expect it to break at par. Some investors speculated that the deal could allocate as early as last Friday or potentially this week. A Neiman Marcus spokeswoman could not be reached. A spokesman for Texas Pacific declined comment.
Following strong demand on the term loan and less demand for bonds, the term loan "B" for Neiman Marcus was increased to $1.975 billion by lead banks Credit Suisse First Boston and Deutsche Bank last week. To increase the loan, the banks moved funds from the bond deal into the bank deal. Pricing on the term loan was cut to LIBOR plus 2 1/2% from LIBOR plus 3%. The deal also includes a $600 million asset-based revolver, with pricing of LIBOR plus 1 3/4%, which did not change. The loans back Texas Pacific Group and Warburg Pincus' leverage buyout of the company.