Viasystems Group's bank loan traded up into the 100-1001/2 range with the news that the company will go after about $200 million in new senior subordinated notes and use the proceeds to pay down the company's bank debt. John Hastings, v.p. of investor relations for Viasystems, said that all the proceeds from the new deal would be directed to pay down the company's bank loan tranches according to maturity. Goldman Sachs is reportedly leading the bond deal.
Traders believed that the new note issue would be completed despite Moody's Investors Service's relatively low rating of Caa2, which was assigned to the notes. The "B" loan has a spread of 51/4% and the company will be about three times levered at the bank debt level, noted one trader. Viasystem's "B" loan began to trade up about a month ago as the buzz of a new second-lien deal hit the market. At that time, the "B" loan traded up from the 877/8-891/3 range, according to LoanX, into the 961/2-981/2 context (LMW, 11/17). The new notes will be subordinate to the senior secured bank loan.