Owens-Illinois' carve-out term loan began trading this week with dealers flipping more than $10 million in the 99 7/8 to 100 1/4 range and more traditional par players buying in. Although the paper is not funded yet because it is technically still revolver paper, traders said it was still moving on "when-issued" expectations for the term loan. The $10 million that traded is part of a $500 million revolver the company will carve-out as a term loan to make the paper more attractive to institutional buyers. The move was designed to redistribute exposure to the company by moving the paper out of the hands of pro rata lenders and into those of hungry institutional investors without syndicating a restructured deal. The banks holding a lot of the paper encouraged this move to make the name more liquid in the secondary market. (LMW, 4/1).
The new slice is priced the same as the company's existing $62.5 million term loan at LIBOR plus 2 1/2%. The credit now comprises a $2.5 billion revolver and a $562.5 million term loan. Calls to Jeffrey Denker, company treasurer, were referred to a spokesperson, who did not return calls.