Price talk has flexed down 25 basis points to LIBOR plus 1 1/2% on Fresenius Medical Care's $250 million "D" loan. As first reported on LMW's Web site last week, if the lead arrangers can sell the loan at this rate it will be one of the tightest leveraged loan spreads ever. "We see a lot of demand. There are a lot of banks that would like the paper as well," a banker said, explaining the rationale for the flex. Fresenius' "C" loan is currently priced at LIBOR plus 2 1/4%.
The refinancing is being led by Credit Suisse First Boston, Bank of America and Dresdner Bank and also includes a $75 million revolver and $75 million "A" loan. The revolver and "A" loan are both talked at LIBOR plus 1 3/4%. Mark Fawcett, Fresenius' treasurer, and Heinz Schmidt, Fresenius' director of investor relations, declined comment. Express Scripts set a new low earlier this year, pricing its bank deal at LIBOR plus 1 1/2%, a banker said. Express is performing very well in the secondary market and now trades north of par, the banker added.
Pricing also flexed down to LIBOR plus 1 3/4% last week on Emmis Communications Corp.'s $650 million term loan, led by B of A. Five or six investors may have dropped out after the flex, a loan investor noted. The company is refinancing existing debt, which was priced at LIBOR plus 2 1/4%, and set out to cut down to LIBOR plus 2%, he added. The deal also includes a $350 million revolver. Emmis officials and a B of A spokesman did not return calls.