Seat Pagine Gialle’s new EUR3.2 billion loan traded actively out-of-the-box, but at levels that were points higher than many market players expected. The company’s “B/C” term loan traded in the 99-99 1/2 range last week compared to an anticipated 97-98 range. The loan’s pro rata piece changed hands in the 98 1/2-99 context. One trader estimated that about EUR100million has traded since the break with lenders across the spectrum participating in the activity.
“It’s very well managed by the top four chapsÉThere’s been an awful lot of support for this name,” said the trader. Those four chaps are The Royal Bank of Scotland, BNP Paribas, Barclays and Credit Suisse First Boston, which lead the new deal. Still, some market players believed that there were there were quite a few other sellers standing on the sidelines. These sellers could look to sell in the new year, which could ultimately cause a softening in the levels, they said.
El Paso Corp.’s bank debt levels held firm in the 98 1/2-99 range last week after the company announced its long-term plan and decision to sell off its interest in GulfTerra Energy Partners. The name is believed to have traded in that context. But Standard & Poor’s lowered the company’s corporate credit rating after the plan was announced from B+ to B, noting that “heightened risks during the transition period necessitate a lower credit rating.” Moody’s Investors Service confirmed El Paso’s ratings, but retained its negative outlook. Still, the market viewed the company’s plans positively despite the downgrade, noted one dealer.
El Paso’s long-term business plans include reducing the company’s debt by about $15 billion by the end of 2005, completing $3.3 billion to $3.9 billion in asset sales and a streamlining of operations. El Paso will also sell its 50% interest in the general partner GulfTerra, about 14 million GulfTerra common units, and certain processing assets as a part of the merger of GulfTerra and Enterprise Products Partners. These sales are expected to generate $1 billion that will be directed to El Paso’s debt restructuring program. Company officials could not be reached by press time and a spokesperson did not return calls.