Pegasus Media & Communications' loans inched higher in active trading last week with hedge funds and bond investors said to be taking out some of the senior secured lenders such as CLOs. The $300 million "D" loan was being quoted at 98 1/2-99 1/2, a couple of points higher over the course of the week. The incremental term loan is also being bid slightly higher at 95-97 1/2, a trader added.
Bank of America leads the debt. One source said the "D" loan is priced at LIBOR plus 7% while the incremental loan is priced at LIBOR plus 3 1/2%, which is probably why there is a difference in the quote despite the debt being pari passu. Market participants maintain the senior lenders will receive par, but there are questions over the length of the bankruptcy process. As a result, some investors that mark their portfolios may need to sell their exposure.
The list of lenders to the company at the time of an amendment last year encompasses a large segment of the institutional market. American Money Management Corp., Trimaran Advisors, ING Capital Advisors, Sankaty Advisors, American Express Asset Management, Fidelity Investments, Franklin Investments, Guggenheim Investment Management, Highland Capital Management, T. Rowe Price Associates, Orix Finance Corp.,Merrill Lynch Investment Managers, Stanfield Capital Partners, ING Investments, AIG Global Investment Group,Oaktree Capital Management and Ableco Finance are all listed. It could not be determined how many of those lenders still hold the credit.
Last month, Pegasus filed for bankruptcy to resolve certain outstanding issues, including the long-unresolved uncertainties respecting its rights to deliver DIRECTV programming and services. A Pegasus official declined comment.