Bankers were said to be warning accounts that allocations on the debt backing Thomas H. Lee Partners $1.05 billion acquisition of Michael Foods were likely to be miniscule. One investor said the deal, led by Bank of America, Deutsche Bank and UBS, is likely to be flipped around when it breaks due to the small allocations. In addition, the banks were rumored to be cutting pricing on the various tranches.
One banker said pricing on the $135 million senior unsecured floating-rate loan is being cut from talk of LIBOR plus 41/4% to LIBOR plus 33/4%. The B2-rated tranche was carved out of the "B" loan. Pricing on the B1-rated $495 million "B" loan is also being reverse flexed 25 basis points to LIBOR plus 21/2%, said the source. Officials at the banks either declined comment or did not return calls.