Dresser Inc.'s term loans "A" and "B" each topped off over par last week on increased investor appetite for the credit. The "A" tranche hit 101 3/4 and the "B" hit 101 1/2 as more than $100 million of the credit has traded. According to a dealer, the credit "hits the right sweet spots" in the market. "It's in the energy sector. It's rated Ba3 with a positive outlook," he said. Dresser is an oil and gas-equipment services company.
Calls to the company were referred to a spokesman, who said, "The result in the market reflects our good first quarter results and the generally good macro-economic conditions for companies of our type." Another market watcher explained that in a slowing economy, there's a particular appetite for credits with a strong rating.
Earlier this year, Dresser's $820 million credit was blown out to $1.5 billion, as bankers noted the strength of the deal prompted the pro rata to do as well as the "B" in the market. (LMW, 3/25). The company has an $820 million credit facility, which breaks down into three tranches and expires in 2007. Credit Suisse First Boston and Morgan Stanley are the lead arrangers, according to Capital DATA Loanware. Pricing ranges from 265 basis points over LIBOR to LIBOR plus 4 1/2 %.