More juice was added to the second lien of Microcell Telecommunications' bank facility last week, while the first lien oversubscribed. The spread on the C$250 million second lien was raised 1% to LIBOR plus 7%. One loan investor said Microcell was hurt by Wellman's refinancing, which also included a second lien. "When Wellman came out people said, 'Why would I think of buying this when I can buy the Wellman second lien?'" Wellman's $265 million second-lien term loan priced at LIBOR plus 63/4%. Microcell is rated CCC+/Caa1, while Wellman is rated B+/B3.
One buysider said he would pass on the deal. "Everyone's lost a lot of money on that one," he said, referring to past debt that what was distressed but has since come back.
Still, Thane Fotopoulos, director of investor relations for Microcell, said, "Things are progressing well on the bank deal." The first lien comprises a C$50 million revolver and C$150 million term loan, which are both priced at LIBOR plus 4%. J.P. Morgan and Credit Suisse First Boston lead the facility.