The $145 million "B" loan being led by Bank of America and UBS Warburg for The Columbia House Company will likely be flexed or have some form of tweaking, according to bankers, who said the credit is presenting a tough sell. "It's a B2 credit and so the buyside is looking for a little extra to compensate for some added risk," explained a banker, who predicted a 1/4% or 1/2% flex. The "B" has a current spread of LIBOR plus 41/ 2%, which is 1/2% higher than the now subscribed Herbalife deal.
The loan, which also comprises a $30 million revolver, backs Blackstone Capital Partners' acquisition of a majority stake from AOL Time Warner and Sony for $450 million. Officials at UBS and B of A declined to comment.