Investors anticipating a Panavision recap that would replace bank debt with senior secured notes, got burned last week, as the planned $250 million note offering was shelved late on Thursday when bond investors refused to bite. One banker said the bank debt was trading at a big discount, but then traded up as opportunistic buyers predicted the proposed subordinated debt would repay paper. Trading in the mid-90s earlier last week, the name fell at least 10 points on news of the failed deal, a banker commented. "The market is selective, and the envelope was pushed," a banker said of the proposed bonds and new credit. A spokesman for Panavision said market conditions made the note offering impossible at this time. He declined comment on whether the offering would ever go through.
J.P. Morgan and Citibank launched syndication of the $430 million refinancing package for the camera maker in the hope of reducing senior leverage and terming out debt, the spokesman said. In addition to the notes, which carried a second lien status, a $150 million six-year "B" term loan and $30 million five-year revolver would replace the existing $340 million of bank debt. The refinancing of the credit facility was contingent on the note offering. Bankers were not complimentary and said the deal was simply not attractive full stop. Officials at J.P. Morgan and Citibank did not return calls. The names of buyers of the paper and amounts traded could not be determined.