RailAmerica's new $375 million "B" term loan broke for trading last week and dealers estimated that roughly $20-30 million of the name traded in the 100 1/2 to 101 1/4 context. Investors are attracted to this name, which blew out in syndication, because of its consistent cash flow and asset value. One trader noted that the deal is three times over collateralized, . Buyers are most likely to be original lenders who did not get their fill of the paper after allocation, traders said.
UBS Warburg and Morgan Stanley led the new term loan that was flexed down from a pricing of 31/ 4% to 23/ 4%. The new facility also includes a $100 million revolver priced at 21/ 4% (LMW, 4/22). The name is not likely to trade higher than its current levels, said dealers noting the slim coupon.