An auction last week resulted in a $45 million trade of Finova Group's bank debt at 81. Bank of Nova Scotia was reportedly the seller. A spokesman did not return calls. Bear Stearns was rumored to be the buyer, but dealers there declined to comment. According to market players, the credit was highly bid for at the auction. Dealers said levels were up from 79 two weeks ago and traded at 81 1/2 in the Street at $5 million. While traders say the credit is still viewed as attractive, once Finova hits a certain level, it becomes harder to trade. "There's still a little deal risk; once you get in the 80s, it's tough," said one, adding that investor Warren Buffett's interest in the name has been the sole drive behind the levels. The Phoenix, Ariz.-based company offers financial services to small and mid-sized companies.
Finova has a $1.6 billion credit facility that breaks down into two tranches. Pricing is 35 basis points over LIBOR for one-year term loan and LIBOR plus 6% for the revolver. Citibank and Commerzbank are the lead arrangers, according to Capital DATA Loanware.