The market, hungry for a solid credit, is awaiting Suiza Foods' break into the secondary market. The deal is still waiting for final documentation to be completed, but it has been touted as one of the strongest deals of the year as the "B" tranche was well oversubscribed by investors. "It will trade well over par," one trader predicted. Yet a few dealers are cautiously optimistic about levels and they expect the term loan to trade higher than the pro rata. "The pro rata struggled more in syndications," a trader noted, adding that appetite for pro rata deals isn't as strong.
Last week Dean Foods, which agreed in April to be acquired by Suiza, said it expects fourth-quarter earnings to fall well below previous estimates. Some participants in the deal said the announcement came as a surprise and are wondering how levels will be affected when Suiza trades out of the box.