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Recent trends dominate despite
debt ceiling concerns
364-day
AA 3.5 2.5 5.0 20.3 5,000.0
A 9.83 7.00 12.50 50.50 2,094.00
BBB 21.7 10.0 30.0 166.7 558.3
Multi-year
AA 11.17 6.00 15.00 79.95 750
A+ NA NA NA NA NA
A 10.00 7.00 15.00 70.24 1,337.50
A- 18.33 15.00 25.00 141.67 1,166.67
BBB+ 17.50 15.00 20.00 140.00 1,550.00
BBB 21.25 15.00 30.00 135.63 1,162.50
BBB- 31.25 25.00 35.00 193.75 1,218.75
were light, with many investors looking to
remain invested but careful about picking
their spots. The result was a continued
buyers’ strike, causing the market to leak
slightly lower.
Volumes in the middle market loan space
were somewhat light but the same space
was insulated to a great extent from the
volatility in the broader market.
And the investment grade sector kept right
on ticking as banks continue to market large
bridge facilities at relatively thin spreads.
Leveraged
It was a tale of two markets in the pri-
mary leveraged loan market last week as
investors lapped up strong credits amid a
slowing pipeline.
With the drama unfolding in Washington
on the debt ceiling issue, the loan market
(LOAN MARKET cont’d on p. 2)
Thomson Reuters LPC uses the 3-5 latest transactions in each
ratings category. The credits represent syndications that were not
substantially under- or over-subscribed. Agent and syndications
fees are not included. Leveraged BSL Grid available at www.
loanconnector.com
BSL GRID Avg. Min. Max. Avg. Fully Avg.Applic. Undrawn Undrawn Undrawn Drawn FacRating (LIB spread Size + Ann ($Mils.) + Usage)
Due to the lack of adequate deal fl ow, the multi-year revolver of some rating categories will not be posted until such time when there are suffi cient deals to report.
Despite some growing nerves going
into the end of the week as the impasse
over the debt ceiling continued, the re-
sponse in the loan market was muted.
Throughout the week, the institutional
loan market showed continued strength
as most issuers were able to cut the
spreads on their loans during syndica-
tion. And while accounts were said to
be doing some lightening up throughout
the course of the week, sellside pres-
sure in the secondary market remained
relatively light.
If anything could be said of last week’s
events, it was that the recent trends that
have come to dominate the loan market
recently continued to dominate.
Investors favored better-quality names,
piling into loans with good ratings and
decent coupons while leaving lower-quality
names to go begging. Trading volumes
Copyright notice: Any copying, redistribution (including electronic forwarding) or republication of Thomson Reuters LPC publications, or their content is strictly prohibited. Copyright © 2011
GOLD SHEETS....................................................................Vol XXV, No. 29 A Thomson Reuters LPC Publication August 1, 2011
5 THINGS TO KNOW
• Immucor is preparing to launch a $700M credit
facility Tuesday via JP Morgan and Citigroup
to back its $1.97B buyout by TPG Capital.
• The CLO market has shown a remarkable
comeback in 2011. CLO issuance year to date
is $7.6B, with another $2B in the pipeline.
• Price levels in the syndicated loan market remain
weak as markets grapple with an uncertain
macroeconomic picture. Since April, average
prices for riskier second-lien multi-quoted
credits are down over 2.7 points to the 87
context.
• Non-sponsored middle market issuance topped
$29B in 2Q11 pushing the total for the fi rst half
to $49.5B, not far behind 1H07’s $56B.
WHAT TO WATCH
DDetailed. Accurate. Transparent.
LPC COLLATERALTHE FIRST STEP INCLO ANALYSIS
LPC COLLATERAL provides
a competitive edge to
CLO investors, managers
and traders.
For more information e-mail
lpc.info@reuters.com or visit
www.loanpricing.com
1 Despite the uptick in volatility seen in the
broader markets, the U.S. leveraged loan
market witnessed continued strength in
the form of a handful of downward price
fl exes. p. 17
2Thomson Reuters LPC’s Loan Market
Scoreboard provides a snapshot of key
statistics in the leveraged loan and high
yield bond markets. p. 3
3 U.S. independent power producer
Dynegy Inc, after failing to fi ll the book
on its $1.7B refi nancing deal by the July
22 commitment deadline, last week
raised pricing and revised tranching to
better match investor demand. p. 18
4 Deutsche Bank is in the market with a
$1.88B refi nancing for Silgan Holdings.
The facility comprises an $800M million,
fi ve-year revolver and multi-tranched
TLA. p. 18
5As the August 2 deadline for raising
the U.S. debt ceiling looms, market
participants wonder what the ultimate
impact of a downgrade could have in the
investment grade market. p. 19
GOLD SHEETS –August 1, 2011 2
INSIDE
Copyright notice: Any copying, redistribution
(including electronic forwarding) or republication of
Thomson Reuters LPC publications, or their content is strictly prohibited.
Copyright © 2011
LOAN MARKET SCORECARD ........................................ 3ANALYTIC SNAPSHOT ................................................... 5LCDS, IGR MARKET BASED PRICING ............................7RELATIVE VALUE ANALYSIS .......................................... 8FORWARD CALENDAR .................................................. 9LEAGUE TABLE ..............................................................10DEALS..........................................................................11-16THE WEEK IN NEWS ................................................ 17-24ASIA NEWS ....................................................................20EUROPE NEWS ..............................................................21
LT Sec’ Bond
Borrower Rating Loan LCDS Swap CDS
Aramark Corp B+ 241 274 523 395
Biomet Inc B+ 323 262 563 339
Burlington Coat Factory
Warehouse Corp B- 471 316 778 663
Cablevision Systems Corp BB 177 156 312 332
Hertz Corporation B+ 277 182 495 358
Huntsman International LLC B+ 244 205 395 354
Mediacom LLC BB- 297 427 575 627
Michaels Stores Inc B- 456 289 759 533
SuperValu Inc B+ 154 201 538 668
TRW Automotive Inc BB+ 111 197 257 220
Source: Source: Thomson Reuters Eikon
See www.loanconnector.com. for more names and methodology.
CROSS MARKET COMPS GRID
LOAN MARKET REVIEW
Fig. 1: Downward and upward price fl exes balance out in July
So
urc
e: T
ho
mso
n R
eu
ters
LP
C
H
HH
H
H
H
H
H
H
H
H
H
H
H HHHH
H
H
H
B
BB
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
Ashl
and
Evan
s An
alyt
ical
Tere
x
Qua
d/G
raph
ics
Acad
emy
Spor
ts
SunC
oke
Auto
parts
Auto
parts
(2n
d lie
n)
US
Secu
rity
Asso
c.
Cap
suge
l
Prim
edia
DEI
Hol
ding
s
SMAR
T M
odul
ar
INC
Res
earc
h
inVe
ntiv
Hea
lth
Cro
wn
Med
ia
Nor
it H
oldi
ngs
SRA
Inte
rnat
iona
l
Cum
ulus
(2nd
lien
)
Nan
a
Dyn
egy
Gas
Co
0%
2%
4%
6%
8%
10%
12%
H Final
B Original
Down UP
Yiel
d (3
−yea
r)
was largely immune to concerns about
sovereign default or a downgrade. Many
loan market investors noted that the
macroeconomic concerns engulfi ng the
U.S. are a much bigger issue for equity
investors than they are for loan or bond
market participants.
“Loan issuers don’t need a signifi cant
growth of GDP. They need an absence of
a recession,” said one investor from a large
buyside shop.
Many loan investors echoed that senti-
ment, noting that new money deals were
seeing signifi cant commitments, while
opportunistic refi nancing or dividend loans
were undergoing price tweaks. Investors
heaped praised on the continued supply
of high quality names such as Capsugel
and Autoparts Holdings.
In a clear sign of bifurcation in the market,
many refi nancing deals struggled to get
done as launched, with the most prominent
tweaks faced by Dynegy. The issuer moved
funds from its GasCo loan to the CoalCo
tranche and bumped up pricing by 125bp
on the GasCo piece.
Meanwhile, even though the number of
issuers undergoing upward and downward
price fl exes was more or less the same
in July, acquisition and LBO deals were
favored for downward price revisions (Fig.
1). Investors remain hungry for new money
deals and have been booking assets such
as Academy Sports’ $840 million covenant-
lite term loan, in spite of the deal being
highly levered. Other issuers that were
able to fl ex down were OM Group and U.S.
Security Associates.
And, despite investors’ “fl ight to quality,”
sponsors and issuers are still confi dent of
an open debt capital market, with recent
announcements for deals such as Kinetic
Concepts’ LBO loan providing comfort that
private equity fi rms are incentivized to put
money to work even amid an uncertain
economic picture.
Middle Market
A pair of buyout loans, a dividend deal
and a refi nancing hit the middle market last
week, and a handful of lenders announced
new hires.
CHI Overheard Doors launched a $203.5
million bank loan backing its sale to Fried-
man, Fleischer & Lowe from JLL Partners.
The deal is led by GE Capital and Wells
Fargo. The $127.5 million, six-year fi rst-lien
term loan is talked at LIB+525 with a 1.5
percent Libor fl oor and a 99 OID. The $51
million, 6.5-year second-lien term loan is
talked at LIB+925 with a 1.5 percent Libor
fl oor and a 98 OID. A $25 million, fi ve-year
revolver fi lls out the credit.
On Wednesday, Credit Suisse launched a
$215 million loan backing New Mountain
Capital’s acquisition of a majority stake in
SNL Financial. The deal includes a $30 mil-
lion revolver and a $175 million covenant-lite
term loan. Price talk on the loan is LIB+600
with a 1.25 percent fl oor and a 99 OID.
The loan also has 101 soft call protection
for one year.
On Thursday, Jefferies launched a $160
million refi nancing loan for Steak ‘N Shake.
The facility includes a $20 million, three-
year revolver and a $140 million, four-year
term loan. Pro forma leverage is being
marketed at 3.2 times. Proceeds from the
new facility will refi nance existing debt
and fund the return of capital to its parent
Biglari Holdings.
And MSC Software Corp set price talk on
its $215 million fi rst-year term loan. The loan
is talked at LIB+500 with a 1.5 percent Libor
fl oor. The OID is to be determined. However,
lenders will enjoy a 101 soft call for one
year. Proceeds from the Bank of America
Merrill Lynch-led loan will fund a dividend
to sponsors Symphony Technology Group
and Elliott Management Corp.
Elsewhere, FirstMerit Bank, Monroe
Capital, NewStar Financial each announced
new hires as they expand their respective
platforms.
Secondary
High beta fl ow names declined toward
the end of last week as the deadline for an
agreement to raise the debt ceiling drew
— cont’d from p. 1
GOLD SHEETS – AUGUST 1, 2011 3
(LOAN MARKET cont’d on page 4)
LOAN MARKET REVIEW
Fig. 2: Average bid in SMi100 declines amid thin volumes
So
urc
e:
LS
TA
/T
ho
mso
n R
eu
ters
LP
C M
TM
Pri
cin
g
6/23/2010 8/27/2010 11/1/2010 1/6/2011 3/14/2011 5/17/2011 7/21/201192
93
94
95
96
97
98
Avg.
bid
(%of
par
)
close and uncertainty began to weigh.
Friday morning, a handful of fl ow names
opened down 25bp to 50bp as the impasse
continued. Meanwhile, new issues contin-
ued to hold up as better credits remained
in favor.
The average bid in the overall market
ended Thursday at 96.21, down from 96.25
the week before, according to LSTA/Thom-
son Reuters LPC MTM Pricing (Fig. 2). The
average bid in the SMi100 (the 100 most
widely held loans) ended Thursday at 96.95,
down from 96.99 the week before.
Chrysler’s TLB was trading 97-97.5 Friday
morning, down from 97.5-98 at the begin-
ning of the week. Harrah’s Entertainment’s
loan was trading 90-90.5 Friday morning,
down 25bp from the day before and a point
on the week.
Meanwhile, newer loans were holding
up better. Ashland’s TLB was ticked down
12.5bp Friday morning to 100.125-100.375
after holding at 100.25 throughout the
week.
OM Group’s new $350 million U.S. TLB
was 99.875-100.125 Friday morning after
breaking in that same context the day
before.
Reynolds Group’s new $2 billion term
loan was off slightly at 99-99.375 Friday
morning after breaking for trading in the
99.25-99.75 range Wednesday.
Academy Sports new $840 million term
loan was down about 50bp from its break
price earlier in the week at 99.5-100 Friday
morning.
Meanwhile, Capsugel’s new loan broke for
trading Wednesday afternoon in the 100.25-
100.75 range. Terex Corp’s new $460 million
term loan was trading 100.25-100.5 after
also breaking for trading Wednesday.
And bids for a $22 million cash loan BWIC
were due Thursday. The portfolio consists
of 21 tranches of mostly off-the run names.
Investment Grade
Despite growing concerns about the U.S.
debt ceiling, the investment grade loan
market continued to see a growing pipeline
for bridge loans backing M&A transactions.
In recent weeks, knowledge of at least four
potential bridge loans backing the acqui-
sitions of Medco Health Solutions, Nalco,
Temple-Inland and Southern Union have
been announced in the U.S. investment
grade loan market. And more are expected
to follow, according to bankers (see pg. X).
Express Scripts is currently in the market
with a $14 billion bridge loan via Credit
Suisse and Citigroup. Joining the bridge is a
$5.5 billion pro rata tranche that is expected
to subsequently become its permanent
fi nancing to back its merger with Medco
Health. The issuer is offering upfront fees
of roughly 40bp on its $14 billion bridge
loan and around 50bp on the $5.5 pro rata
tranches for commitments of $1 billion.
The company is currently in discussion
with the fi rst-tier of banks and is asking
for tickets of $1 billion, with $700 million
LOAN MARKET SCORECARD
For the week endedLEVERAGED PIPELINE ($Bils.) 2011 High 2011 Low 7/14/11 7/21/11 7/28/11
Leveraged pipeline $63.00 $16.00 $42.80 $50.30 $40.46 Instituitonal pipeline $45.00 $8.80 $25.62 $26.55 $18.55 Institutional new deals this week $9.75 $1.49 $1.68 Institutional closed deals this week $4.69 $0.47 $9.49
3Q11 To Date
YIELDS (LEVERAGED) 1Q11 2Q11 7/14/2011 7/21/11 7/28/11
Avg. Spread (bps) 409 436 516 516 509 Avg. Libor fl oor (%) 1.34% 1.33% 1.36% 1.37% 1.36%Avg. OID 99.34 99.13 98.61 98.61 98.63Avg. Yield (3yr term to repay) 5.67% 6.01% 7.04% 7.05% 6.97%
For the quarter ended For the week ended
FUND FLOWS 1Q11 2Q11 7/13/2011 7/20/11 7/27/11
(Lipper FMI)($Mils.) Bank loans +14,655 +9,311 +209 +2.4 +42.9HY bonds +6,398 -4,378 +1,301 +287.3 +303.8
SECONDARY 3/31/2011 6/30/2011 7/14/2011 7/21/11 7/28/11
Average Bid Levels SMi100 97.39 96.91 96.97 96.99 96.95Overall Market 96.42 96.48 96.45 96.25 96.21Euro Lev 40 97.04 96.04 95.55 95.21 94.94Middle Market 94.9 95.63 95.53 95.53 95.50Second Lien 89.09 87.52 87.04 86.89 87.48Covenant Lite 95.61 96.05 96.03 96.08 96.24LBOs 95.64 94.97 94.96 94.50 94.45Ba1/Ba2 98.4 97.93 97.96 97.97 97.96Ba3 98.67 98.5 98.48 98.41 98.38B1 98.65 98.73 98.82 98.86 98.50B2/B3 96.39 95.71 95.46 95.29 95.06 Source: Thomson Reuters LPC, Lipper FMI, LSTA/LPC MTM pricing
GOLD SHEETS –August 1, 2011 4
LOAN MARKET REVIEW
Fig. 3: Final week in July a big one for HY bonds
So
urc
e: T
ho
mso
n R
eu
ters
Wk
1/10
Wk
1/17
Wk
1/24
Wk
1/31
Wk
2/7
Wk
2/14
Wk
2/21
Wk
2/28
Wk
3/7
Wk
3/14
Wk
3/21
Wk
3/28
Wk
4/4
Wk
4/11
Wk
4/18
Wk
4/25
Wk
5/2
Wk
5/9
Wk
5/16
Wk
5/23
Wk
5/30
Wk
6/6
Wk
6/13
Wk
6/20
Wk
6/27
Wk
7/5
Wk
7/11
Wk
7/18
Wk
7/25
$0
$2
$4
$6
$8
$10
$12
$14
$16
Wee
kly
bond
vol
ume
($B
ils.)
allocated to the bridge loan and $300
million for the pro rata tranches. The pro
rata tranches constitute the loan portion of
the permanent fi nancing that, along with
a bond issuance, is expected to replace
the bridge. It includes a $4 billion funded
fi ve-year term loan A and a $1.5 billion fi ve-
year revolving credit. The fi rst-tier banks
are Bank of America Merrill Lynch, Bank of
Tokyo Mitsubishi, Credit Agricole, Deutsche
Bank, Mizuho, Morgan Stanley, Sumitomo
Mitsui, SunTrust, RBS and Wells Fargo,
sources said. Credit Suisse and Citigroup
are leading the fi nancing.
At current ratings of Baa3/BBB+, the
Express Scripts bridge pays LIB+175. Pric-
ing on the term loan A is also expected to
open at LIB+175.
Bankers are also waiting for International
Paper (IP)’s $1 billion 364-day bridge. And
Deutsche Bank is in the market with a $1.88
billion refi nancing for Silgan Holdings. The
facility comprises a $800 million fi ve-year
revolver and multi-tranched term loan A.
Bonds
Although last week began with a small
high yield pipeline, July will not end as the
lowest month of issuance since June 2010.
The week of July 25 will wind up pricing the
largest amount of weekly volume in the U.S.
high yield corporate bond market since May
16 (Fig. 3). In fact, last week’s volume of
$10.51 billion is almost twice as large as all
the other weeks in July combined.
Despite the continued uncertainty sur-
rounding the U.S. debt talks and fear of a
potential downgrade as Republicans and
Democrats refuse to compromise on a
budget plan, issuers are rushing into the
market ahead of the debt deadline. It is
important to note that the better quality,
well liked and well known high yield credits
were driving volume last week.
Double-B rated credits accounted for 60
percent of issuance last week. Tuesday was
by far the biggest volume day of the week
and year at $7.88 billion as a result of the
Reynolds Group and HCA bringing their
large two-part deals to market.
The Reynolds Group was the largest
deal to enter the high yield market since
Arch Coal priced its $2 billion offering in
early June. The deal performed well in the
secondary market, initially climbing over
2 points. Later Tuesday, infl uenced by the
Reynolds Group’s success, HCA pulled the
trigger and priced a quick print, $5 billion
dollar deal that was upsized from an origi-
nally planned $1 billion.
The book for the HCA deal was overheard
at around $10 billion, thus justifying the sub-
stantial upsize. HCA’s deal comes in as the
sixth-largest high yield deal on record and
made up nearly half of last week’s volume.
(Caleb Frazier, Leela Parker, Smita Madhur and Michael Langellotti contributed to this report.)
— cont’d from p. 3
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GOLD SHEETS – AUGUST 1, 2011 5
ANALYTIC SNAPSHOT
High yield bond volume slows in July
So
urc
e: T
ho
mso
n R
eu
ters
Jan−
10
Feb−
10
Mar
−10
Apr
−10
May
−10
Jun−
10
Jul−
10
Aug
−10
Sep
−10
Oct
−10
Nov
−10
Dec
−10
Jan−
11
Feb−
11
Mar
−11
Apr
−11
May
−11
Jun−
11
Jul−
11
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
VolumePipeline
Mon
thly
bon
d vo
lum
e($
Bils
.)
Middle market non-sponsored
tenors almost back to pre-crisis levels
So
urc
e:
Th
om
son
Re
ute
rs L
PC
2003 2004 2005 2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10 1Q11 2Q1120
25
30
35
40
45
50
55
60
Large MM
Trad. MM
Teno
r (m
onth
s)
AAA spreads for new issue CLOs
stablilize in 120-130bp area
So
urc
e: T
ho
mso
n R
eu
ters
LP
C
0.0x
3.0x
6.0x
9.0x
12.0x
15.0x
100
110
120
130
140
150
160
170
Fra
ser S
ulliva
n
Are
s M
gm
t
Oak H
ill Ad
v.
KK
R
CS
AM
Bla
ckR
ock
Sym
ph
ony
ING
LC
MA
po
llo
GS
O B
lacksto
ne
Carly
le
Babso
nP
ineB
ridge
Blu
eM
oun
tain
CIF
C D
eerfie
ldIn
vesco
Pru
den
tial
Octa
gon C
redit
Ivy H
ill (MM
)
Levera
ge
AA
A S
pre
ad (
bps)
Debt to Equity AAA spread
Riskier loans show biggest pullback given
macro concerns
So
urc
e:
LS
TA
/T
ho
mso
n R
eu
ters
LP
C M
TM
Pri
cin
g
1/3/2011 2/10/2011 3/22/2011 5/2/2011 6/10/2011 7/21/201182
83
84
85
86
87
88
89
90
2nd
lien
aver
age
bids
(% o
f par
)
Non-sponsored middle market issuance topped $29 billion in 2Q11 pushing the total for the fi rst half to $49.5 billion, not far behind 1H07’s $56 billion. Unlike 2007, however, refi nancings continue to dominate, making up 70 percent of loan volume. Meanwhile, new money issuance remains at low levels. Lenders say that while they have seen some expansion in credit lines, there is still little core demand for loans in the non-sponsored market. Banks are not only struggling with the lack of new money, but are also concerned about the limited amounts of drawings that they are seeing under revolving credit lines, which make the bulk of lending in the non-sponsored pro-rata space. Without a meaningful increase in drawings and new money issuance, competi-tion for assets remains fi erce and non-sponsored lenders say that the market is as competitive as ever. Banks are hungry for assets and issuers continue to take advantage of this appetite to obtain better terms. Pricing has dropped dramatically and tenors are almost back to pre-crisis levels. The average tenor on large and traditional middle market non-sponsored revolvers was 4.5 and 3.9 years, respectively – very close to the 4.6 and four years seen back in 2006 and 2007.
High yield corporate bond volume has slowed signifi cantly in July, expected to barely top the double digit mark. In fact, July might end up as the fourth-lowest month of issuance in the past two years. The uncertainty surrounding sovereign debt concerns from both home and abroad have been the main driver of the slowing primary market. Last week, only $8.85 billion had priced over 21 deals. Volume last week was supported by the Reynolds Group, which priced its upsized $2.5 billion, two-part deal, the largest U.S. deal in the high yield market since Arch Coal priced its $2 billion offering in early June. Even so, the negative market tone was a result of continued uncertainty surrounding the U.S. debt talks and fear of a potential U.S. downgrade as Republicans and Democrats refuse to compromise on a budget plan. As a result, opportunistic issuers will most likely stay on the sidelines waiting for future stability in the market.
Price levels in the syndicated loan market remain weak as markets grapple with an uncertain macroeconomic picture. Since late April, average prices for riskier second-lien multi-quoted credits are down over 2.7 points to the 87 context as investors remain risk sensitive. The average bid for the overall market is also down 1.2 points since early May to the 96 context. Investors continue to face headwinds in a fragile economic recovery as sovereign debt problems threaten fi nancial markets. In Europe, despite the new bailout program unveiled recently, sovereign fears persist and are pressuring to include Spain and Italy. And while investors believe the U.S. will reach an eleventh hour deal to raise the nation’s debt ceiling, most economists believe the country’s AAA rating may be downgraded by at least one of the major rating agencies, according to a Thomson Reuters poll. A setback that threatens to derail already tepid economic growth.
The CLO market has shown a remarkable comeback in 2011. CLO issuance year to date is $7.6 billion, with another $2 billion in the pipeline. An even more bullish sign is that several CLOs raised this year exhibit debt-to-equity ratios that mirror leverage levels seen pre-crisis. Symphony, Carlyle and GSO Blackstone were all able to issue CLOs with leverage in the 11-13 times area. Spreads on new issue AAA rated tranches have also tightened, dropping from 160-170bp in January to the 120-130bp area in June and July. However, with recent negative headlines regarding the economy and sovereign debt issues, spreads in the secondary CLO market have widened out. Despite the CLO market’s vulnerability to macroeconomic events, many CLO managers are still predicting healthy issuance for the year. Demand for the CLO product across the capital stack is expected to remain strong, with banks and insurance companies reaching down to get higher yielding mezzanine CLO paper. Robust demand, of course, should translate to tighter pricing and higher leverage down the road but market participants are waiting it out for now to get some clarity on the fi nancial markets. Even so, activity in the new issue market has not come to a halt, with Octagon and Invesco waiting to print CLOs this summer.
GOLD SHEETS –August 1, 2011 6
THE WEEK’S BIGGEST WINNERS
Biggest Winners among widely quoted syndicated loans in secondary trading. All loans contain at least three bids.
Source: LSTA/LPC Mark-To-Market Pricing
Note: These are the averages of indicative bid prices provided by bank loan traders and expressed as a percentage of the par, or face, value. Coupon, or interest rate, is in
1/100s of a percentage point over Libor, the benchmark London Interbank Offered Rate. All ratings are for specifi c loans and not for the company itself except as noted
with an (a). These prices do not represent actual trades nor are they offers to trade; rather they are estimated values provided by dealers.
THE WEEK’S BIGGEST LOSERSBiggest Losers among widely quoted syndicated loans in secondary trading. All loans contain at least three bids.
Source: LSTA/LPC Mark-To-Market Pricing
Note: These are the averages of indicative bid prices provided by bank loan traders and expressed as a percentage of the par, or face, value. Coupon, or interest rate, is in
1/100s of a percentage point over Libor, the benchmark London Interbank Offered Rate. All ratings are for specifi c loans and not for the company itself except as noted
with an (a). These prices do not represent actual trades nor are they offers to trade; rather they are estimated values provided by dealers.
Pricing as of Friday, July 29
SECONDARY NEWS
Pricing as of Friday, July 29
Average WeeklyNon Institutional Par Losers Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)CCS Income Trust RC B2/B L+300 11/5/2013 90.75 -0.75Astoria Generating LC WR/NR L+225 2/1/2011 96.25 -0.63Aramark Corp LC Ba3/BB L+325 7/1/2016 99.00 -0.50Las Vegas Sands Delay Draw TL N.R.*/BB L+275 11/23/2016 96.43 -0.45Hub International LTD Delay Draw TL B2/B L+250 6/13/2014 97.25 -0.37
Average WeeklyInstitutional Par Losers Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Astoria Generating 2nd Lien TL N.R.*/CCC- L+375 8/1/2013 92.08 -3.67Telepizza SA TLB N.R.*/N.R.* E+225 12/11/2014 90.25 -2.36PHS Group Plc TLB N.R.*/N.R.* L+250 11/27/2015 91.65 -1.55Flint Group (Aster) TLB N.R.*/N.R.* E+225 12/31/2016 95.60 -0.90Gentiva Health Services Inc TLB Ba2/BB- L+350 8/17/2016 98.38 -0.78
Average WeeklyNon Institutional Distressed Losers Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Coach America Delay Draw TL N.R.*/N.R.* NA NA 79.00 -1.00Clear Channel Communications RC Caa1/CCC+ L+340 7/30/2014 87.56 -0.35ProSiebenSat 1 Media AG RC (EURO) N.R.*/N.R.* E+200 6/28/2015 86.67 -0.33Realogy Corp RC B1/B- L+425 4/10/2016 86.75 -0.25Central Parking Corp LC Ba3/CCC L+250 3/29/2014 85.00 -0.17
Average WeeklyInstitutional Distressed Losers Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Yell Group Plc (TPI) TLA N.R.*/N.R.* L+350 4/1/2014 35.50 -2.38Panrico SA TL (Euro) N.R.*/N.R.* E+453 NA 23.17 -2.08Viridian Group Plc TL N.R.*/N.R.* L+375 4/20/2013 84.17 -1.75Viridian Group Plc TL N.R.*/N.R.* L+375 4/20/2013 84.17 -1.75Yellow Brick Road TL (Euro) N.R.*/N.R.* NA NA 34.00 -1.67TXU Corp TLB B2/CCC L+450 10/10/2017 74.88 -1.67
**Par = Average Bid≥ 90 ***Distressed = Average Bid < 90 *Not rated
Average WeeklyNon Institutional Par Winners Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Realogy Corp Delay Draw TL B1/B- L+225 9/30/2013 94.25 +1.46Las Vegas Sands RC WR/BB L+150 5/1/2012 96.58 +0.58Travelport Inc Delay Draw TL Ba3/B L+225 5/23/2014 96.07 +0.45Flextronics International Ltd Delay Draw TL N.R.*/N.R.* L+225 10/1/2014 98.83 +0.38Flextronics International Ltd Delay Draw TL N.R.*/N.R.* L+225 10/1/2014 98.83 +0.38
Average WeeklyInstitutional Par Winners Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Wind Telecomunicazione Spa TLA2 N.R.*/N.R.* E+400 11/2/2016 94.42 +1.54Wind Telecomunicazione Spa TLA2 N.R.*/N.R.* E+400 11/2/2016 94.42 +1.54Realogy Corp TLB B1/B- L+300 9/30/2013 94.25 +1.46Lender Processing Services Inc TLB Baa3/BBB L+250 6/16/2014 99.00 +1.33Abbot Group TLB N.R.*/CCC L+350 4/27/2016 91.17 +1.04
Average WeeklyNon Institutional Distressed Winners Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Tribune Co Incremental TL WR/NR L+250 4/19/2014 66.96 +0.92Lee Enterprises RC N.R.*/N.R.* L+150 1/31/2012 82.88 +0.88Capmark Financial Group Inc RC N.R.*/N.R.* L+67.5 3/23/2011 59.50 +0.80TXU Corp RC N.R.*/N.R.* L+350 10/10/2013 89.00 +0.67Capmark Financial Group Inc RC N.R.*/N.R.* L+67.5 3/23/2011 58.15 +0.56
Average WeeklyInstitutional Distressed Winners Loan rating bid changeName Tranche Moody’s/S&P Coupon Maturity (pct. pts.) (pct. pts.)Tribune Co TLB WR/NR L+300 5/17/2014 69.02 +1.11Culligan International TLB Caa2/CCC+ L+225 10/16/2012 75.75 +0.63Capmark Financial Group Inc TL N.R.*/N.R.* L+67.5 3/23/2011 58.32 +0.54American Gaming Systems TLB Caa2/B- L+300 5/1/2013 82.67 +0.50Capmark Financial Group Inc TL N.R.*/N.R.* L+67.5 3/23/2011 57.61 +0.46
**Par = Average Bid ≥ 90 ***Distressed = Average Bid < 90 *Not rated
GOLD SHEETS – AUGUST 1, 2011 7
BIGGEST WEEKLY LCDS MOVERS: LCDX16 NAMES As of Thursday, July 28
5 yr LCDS change Loan Spread* Loan Spread Basis
Name LCDS (LIB+) Change Basis Change
Reynolds Group Holdings Ltd 474 82 340 -1 134 82
Sabre Holdings Corporation 298 68 495 5 -196 63
Las Vegas Sands LLC 283 -61 259 4 23 -65
Toys ‘R’ Us Inc 308 54 448 2 -141 52
Dex Media West LLC 1,443 45 988 34 455 11
Univar Inc. 358 33 351 3 8 30
J. Crew Group, Inc. 465 25 452 6 14 19
Travelport LLC 330 23 346 -8 -16 32
Berry Plastics Corporation 292 19 348 1 -55 19
United AirLines Inc 465 18 315 -4 150 21
Avaya Inc. 624 17 368 5 256 11
Carestream Health, Inc. 499 17 529 11 -30 5
Laureate Education, Inc. 608 15 420 10 188 5
Wynn Las Vegas LLC 411 15 305 1 106 14
Allison Transmission 504 15 325 6 179 9
WEEKLY LCDS INDUSTRY SNAPSHOT: LCDX16 NAMES Avg. 5 yr LCDS Avg. Loan* Loan Spread Avg. Basis Industry LCDS Change Spread (LIB+) Change Basis Change Count
Automobiles & Components 213 2 244 2 -31 1 4
Capital Goods 548 5 554 3 -6 2 3
Commercial Services & Supplies 585 11 474 7 110 4 7
Consumer Services 333 -5 338 2 -5 -7 7
Food & Staples Retailing 275 4 246 2 29 2 3
Food, Beverage & Tobacco 299 -1 242 1 57 -2 4
Health Care Equipment & Services 261 3 327 3 -66 0 8
Materials 249 12 247 1 2 12 11
Media 501 2 556 5 -56 -3 10
Pharmaceuticals, Biotechnology & Life Sciences 248 -3 306 1 -58 -4 1
Real Estate 516 5 324 -3 192 8 3
Retailing 374 16 466 3 -92 13 5
Semiconductors & Semiconductor Equipment 427 0 175 0 252 0 1
Software & Services 335 8 389 0 -54 8 3
Technology Hardware & Equipment 434 8 285 3 149 4 3
Transportation 404 16 386 2 18 14 6
Utilities 417 2 231 1 186 1 3
*Assuming a rolling four-year term to maturity.For more information, write to Loancds@reuters.com or contact your Reuters representative.
MARKET BASED PRICING SNAPSHOT
(Investment grade revolvers where drawn spread is tied to CDS/CDX)
CDS MARKET
Source: Thomson Reuters Eikon
Prior Prior
CDS/CDX CDS/CDX Deal Deal
Borrower name S&P Moody’s Drawn spread is tied to: Floor Cap (7/29/11) (near close) Deal Close Undrawn (Undrawn) (Drawn)
HJ Heinz Co BBB Baa2 One year CDS NA NA 19.91 14.2 6/30/2011 50 37.5 MBP
Air Products & Chemicals Inc A A2 Four year CDS 35 100 49.81 47.3 6/30/2011 NA 37.5 225
Altria Group Inc BBB Baa1 Details undisclosed NA NA NA NA 6/30/2011 37.5 15 MBP
Altria Group Inc BBB Baa1 Details undisclosed NA NA NA NA 6/30/2011 50 15 MBP
Paccar Inc A+ A1 50% of CDX 65 No cap 95.84 98.5 6/23/2011 4 NA MBP
Paccar Inc A+ A1 50% of CDX 65 No cap 95.84 98.5 6/23/2011 10 NA MBP
Baxter International Inc A+ A3 Co’s CDS (details undisclosed) 25 100 NA NA 6/17/2011 8 10 45
PepsiCo Inc A- A1 Details undisclosed NA NA NA NA 6/14/2011 2.5 4 MBP
PepsiCo Inc A- A1 Details undisclosed NA NA NA NA 6/14/2011 5 4 MBP
Illinois Tool Works Inc A+ A1 Details undisclosed NA NA NA NA 6/10/2011 10 10 MBP
Illinois Tool Works Inc A+ A1 Details undisclosed NA NA NA NA 6/10/2011 12.5 12.5 MBP
Novartis AG AA- Aa2 One year CDS 10 75 10.22 9.2 6/10/2011 5 5 MBP
Wal-Mart Stores Inc AA Aa2 One year CDS 10 75 13.86 13.9 6/9/2011 1.5 2.5 MBP
Wal-Mart Stores Inc AA Aa2 One year CDS 10 75 13.86 13.9 6/9/2011 NA 10 MBP
Wal-Mart Stores Inc AA Aa2 One year CDS 10 75 13.86 13.9 6/9/2011 4 10 MBP
Charles Schwab Corp A A2 Details undisclosed NA NA NA NA 6/8/2011 15 15 MBP
Automatic Data Processing NR NR Details undisclosed NA NA NA NA 6/7/2011 1.75 5 MBP
Automatic Data Processing NR NR Details undisclosed NA NA NA NA 6/7/2011 4 8 MBP
* Note: data shown in basis points
Source: Thomson Reuters LPC, Markit on Source: Thomson Reuters Eikon
GOLD SHEETS –August 1, 2011 8
Disc./L
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(bps)
0
200
400
600
800
1,000Loans Bonds
RELATIVE VALUE OF LEVERAGED LOANS VS. HIGH YIELD BONDS
Spread/ Discounted
Bank loan rating/ Coupon LIB-equiv.
Borrower Bond rating Tranche Maturity (bps/%) Spread (bps)
Avaya Inc B+ TLb Oct-14 275 382 CCC+/Caa2 Sr. Unsec. Nov-15 9.75% 767BE Aerospace Inc BBB-/Ba1 TLb Jul-14 275 262 BB+/Ba3 Sr. Unsec. Jul-18 8.5% 417Casella Waste Systems Inc BB/Ba2 TLb Apr-14 500 500 B-/Caa1 Sr. Sub. Feb-19 9.75% 714Cenveo Inc BB/Ba2 TLb Dec-16 475.0 463 B-/Caa1 Sr. Notes Aug-16 10.5% 881Charter Communications BB+/ Ba2 TLb Mar-14 225 230 /B1 Sr. Unsec. Sep-14 10.875% 619Compucom Systems Inc BB/Ba2 TLb Jul-14 300 425 B/B3 Sr. Sub. Oct-15 12.5% 936Constellation Brands BB/Ba3 TLb Jun-15 275 269 B+/B2 Sr. Sub. May-17 7.25% 319DineEquity Inc CCC+/B2 TLb Sep-17 450 450 CCC+/B3 Sr. Notes Oct-18 9.5% 528Emergency Medical Services B+/B1 TLB May-18 375 384 Caa1 Sr. Notes Jun-19 8.13% 539First Data Corp B+/B1 TLb Sep-14 275 504 CCC+/Caa2 Sr. Unsec. Sep-15 9.875% 798Graham Packaging B+ / B1 TLc Apr-14 425 421 CCC+/Caa1 Sr. Sub. Oct-14 9.875% 799Huntsman International LLC B+/Ba2 TLb Mar-17 250 308 B-/B3 Sr. Sub. Mar-20 8.625 391Isle of Capri Casinos BB-/Ba3 TLb Mar-16 350 339 B-/B3 Sr. Notes Mar-19 7.75% 468Laureate Education B/B1 TLb Aug-14 325 455 CCC+/Caa1 Sr. Sub. Aug-17 11.75% 773Lender Processing Services BBB/Baa3 TLb Jul-14 250 340 BB+/Ba2 Sr. Unsec. Jul-16 8.125% 610 Average of term loans 334 383Average of high yield bonds 9% 649
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The yield differential between loans and bonds for the 30 liquid names included in the LPC Relative Value composite tightened by 24bp last week. The average loan
yield increased to LIB+383 while the average bond swap spread decreased to LIB+649, creating a differential of 265bp. In contrast, the LTM bond-loan differential
averaged 259bp.
The chart compares institutional term loans with high yield bonds of several issuers on a Libor-equivalent basis. Loan spreads are determined by their coupon
and secondary market price, and are calculated through a discounted cash fl ow model. Bond Libor-equivalent spreads are determined by taking the yield to worst,
subtracting a comparable Treasury yield and swapping the result to a fl oating-rate equivalent.
The borrowers used in this analysis have loans that are widely held in institutional portfolios. In addition, the sample is weighted to refl ect the overall market share
of each industry. Fifteen of the borrowers are shown below. Averages apply to all 30 issuers that make up the LPC Relative Value composite. See LoanConnector
Relative Value page for a list of all 30 issuers.
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RELATIVE VALUE MARKET
GOLD SHEETS – AUGUST 1, 2011 9
Amneal Pharmaceuticals Healthcare GE Capital/RBS Citizens 7/20 RFI 250 NA 5 325 NA
ArchBrook Laguna Holdings LLC Retail GE NA DIP 50 NA NA 375 NA
Ardent Health Services Healthcare BAML 7/14 ACQ 200 NA NA 500 NA
Aventine Renewable Energy Utilities Wells Fargo 7/21 GCP 50 NA 4 300-350 NA
BJ’s Wholesale Club Inc Retail DB/Citi/Barclays/Jefferies/GE/WF NA LBO 2575 NA NA NA NA
Blackboard Inc Technology BAML/DB/MS NA LBO 1150 NA NA NA NA
Bojangles Restaurants Eats Jefferies 7/26 LBO 215 NA 5 NA NA
California Pizza Kitchen Inc Eats Jefferies/GE Capital NA LBO 365 NA NA NA NA
Carrols LLC Eats NA NA GCP 85 NA NA NA NA
Chefs’ Warehouse Restaurants JPM/GE Capital NA RFI 80 NA NA 250 NA
CHI Overhead Doors GenManuf GE Capital/Wells Fargo 7/27 LBO 204 NA 5 NA NA
CKX Media NA NA LBO 595 NA NA NA
Clement Pappas FoodBeverage Jefferies/BMO 7/20 ACQ 280 NA NA NA NA
Diamond Foods Inc FoodBeverage BAML June ACQ 1000 NA 5 250 NA
Duckwall-ALCO Stores Retail Wells Fargo Capital Finance 7/21 RFI 120 NA 5 200 NA
Dynamics Research Corp Technology BAML/SunTrust Bank/PNC Bank NA ACQ 130 NA 5 400 50
Dynegy Inc Utilities Credit Suisse/Goldman Sachs/Barclays 7/11 ACQ 1700 NA 5 775 NA
EchoStar Corp Technology Deutsche Bank NA ACQ NA NA NA NA NA
Energy Transfer Equity LP OilGas Credit Suisse NA ACQ 3700 NA 364 NA NA
Fogo De Chao Eats JPM 7/26 GCP 205 NA 5 NA NA
General Cable Corp Cable JPM NA RFI 400 NA 5 150-200 NA
Go Daddy Technology BC/DB/RBC/KKR NA LBO NA NA NA NA NA
Henniges Automotive Automotive Credit Suisse/Macquarie/PNC 7/14 ACQ 155 NA 5 600 NA
Hertz Global Holdings Inc Automotive NA NA ACQ 650 NA NA NA NA
Immucor Inc Healthcare Citi/JPM NA LBO 1100 NA 5 NA NA
Insight Global Inc BusServices BNP Paribas 7/18 RFI 157 157 NA 500 NA
Insight Pharmaceuticals Healthcare GE Capital/RBC/SunTrust 7/21 ACQ 420 NA NA 500 NA
Ipreo Holdings BusServices RBC 7/7 LBO 170 115 NA NA NA
Kinetic Concepts Inc Healthcare BAML/CS/MS NA LBO 4950 NA NA NA NA
La Paloma Generating Utilities BAML 7/21 RFI 424 NA 5 NA NA
Lender Processing Services Technology JPM 7/28 RFI 1300 550 5 NA NA
Level 3 Communications Media BAML/Citi NA ACQ 1750 NA 7 425 NA
Lion Copolymer GenManuf HSBC/Wells Fargo 7/14 DivRecap 400 350 5 500 NA
Los Angeles Dodgers Holding Co Leisure JPM NA DIP 150 NA 1 700 NA
Masergy Communications Inc Telecom GE Capital 6/29 LBO 110 NA NA 450 NA
MCCI Medical Group Healthcare GE Capital/SunTrust 7/7 DivRecap 155 NA 5 500 NA
Meritas LLC BusServices Credit Suisse 7/6 RFI 200 NA NA 600 NA
Metropolitan Health Healthcare GE Capital 8/3 ACQ 355 NA 5 NA NA
Microsemi Corp Technology Morgan Stanley NA ACQ 425 NA NA NA NA
Nana Development Corp BusServices GoldmanSachs 6/7 RFI 435 NA 5 NA NA
Ocwen Financial Financials Barclays 7/19 ACQ 575 575 NA 575 NA
OM Group BusServices BAML/PNC/BNP 7/7 ACQ 900 600 NA 375 NA
OpenText Corp Technology Ba2/BB+ Barclays/RBC NA RFI 600 NA NA NA NA
Phillips Plastics Corp GenManuf GE Capital/BNP Paribas 7/20 ACQ 245 NA NA 500 NA
Pike Electric Corp Utilities Regions Bank 7/13 RFI 200 NA NA 250 NA
Pringles ConsProducts BAML NA RFI 1050 675 5 NA NA
Rock Ohio Caesars Gaming Credit Suisse/Deutsche Bank/Citadel 7/27 GCP 275 NA 5 NA NA
Royalty Pharma Healthcare BAML/GS/Citi 7/14 DivRecap 3600 NA 5.25 275 NA
Sealed Air Corp ConsProducts Citi 7/25 ACQ 4420 1300 5 250 NA
Smart Modular Technologies Technology B+/B2 JPM/UBS 6/23 LBO 350 NA 5 NA NA
SNL Financial Financials Credit Suisse 7/27 LBO 205 NA NA NA NA
Solera Holdings BusServices Goldman/BAML NA ACQ 350 NA NA NA NA
Stackpole International Automotive B2/B+ RBC 7/12 LBO 165 NA 5 475-500 NA
Steak ‘N Shake Restaurants Jefferies 7/28 RFI 160 NA 3 NA NA
U.S. Coal Corporation Mining Credit Suisse 7/18 NA 105 NA 6 600 NA
Water Pik Inc ConsProducts GE Capital 7/19 DivRecap 197 NA NA 500-525 NA
YRC Worldwide Shipping JPM NA RFI 400 NA NA 700 NA
Total TLs
TOTAL LEVERAGED $40,457,000,000 $4,322
NON-LEVERAGED
3M Co ConsProducts AA- JPM June RFI 1500 NA 5 NA NA
Airgas Inc OilGas BAML/Wells Fargo 6/23 RFI 750 NA 5 125 20
Banco Itau Financials BNP/HSBC/Mizuho 6/30 RFI 500 NA 3 120 NA
Bank of America Leasing Financials BAML March NA 90 NA 8 250 NA
BP Wind Energy Utilities A2/A NA July GCP 385 NA NA NA NA
Dentsply International Healthcare Morgan Stanley June ACQ 1750 NA 5 NA NA
Express Scripts Healthcare Baa3/BBB+ Credit Suisse/Citi July ACQ 14000 NA NA 175 NA
Georgia-Pacifi c LLC Paper NA 7/27 RFI 3000 NA NA NA NA
International Paper Paper UBS July ACQ 2200 NA NA NA NA
Jefferies Group Inc Financials BBB JPM/Natixis 5/26 ACQ 1000 NA 3 175 NA
Joy Global Inc Mining JPM/GS/BAML July ACQ 1500 NA 1 NA NA
Lonza Group Healthcare JPM 7/21 ACQ 2250 600 5 NA NA
NCR Corp BusServices JPM/RBC/BAML/MS July ACQ 1400 700 NA 125-150 NA
Praxair Inc OilGas BAML/Citi/HSBC July RFI 1750 NA 5 NA NA
Trafi gura AG OilGas BNP Paribas 6/24 GCP 1100 NA 1 115 35
Walgreens Co Retail BAML/Wells Fargo 6/23 RFI 500 NA 4 NA NA
TOTAL NON-LEVERAGED $33,675,000,000
TOTAL IN PIPELINE $74,132,000,000
Pro
Ann./ Forma
Lead Launch Resp. Deal TLs Tenor LIBOR Com. Tot./
Borrower Industry Rating Banks Date Date Purp. Amt. (B, C, D) in Yrs. Spread Fee Sr. Lev.
($Mils.) ($Mils.) (bps) (bps)
Deals in market as of July 28, 2011Added last week: $21.22 billion Bold = New from July 21
— compiled by Jon Methven
Tenor and pricing for pro rata tranches only. See LoanConnector for further deal information and additional forward calendars,
SYNDICATED LOAN FORWARD CALENDAR
GOLD SHEETS –August 1, 2011 10
Thomson Reuters LPC compiles league tables in four ways to catalogue different aspects of syndications volume:
Full-Credit
Full-credit leagues award full credit of a transaction to each agent/co-agent in the lending group.
Number of Deals
Number of deals leagues rank bank holding companies by the number of transactions led or co-led.
Agent-Only
Agent-only leagues award full credit to each lender with an admin., syn. or doc. agent title, up to fi ve banks. For deals $10 billion or more,
full credit awarded to up to fi ve lenders, provided they meet certain criteria.
Bookrunner
This table awards credit to bank(s) with a Bookrunner or Lead Arranger title on the loan documentation.
U.S. League Table Parameters
• Loans must be to U.S. borrowers (Thomson Reuters LPC’s Global League Tables rank worldwide lending).
• Commercial & industrial loans only (real estate and private placements are excluded).
• Loans greater than $10 billion and with more than fi ve agents receive weighted pro rata credit for Agent-only league tables.
For more information concerning league tables contact at (646) 223-6890.
THOMSON REUTERS LPC’S LEAGUE TABLES
Thomson Reuters LPC
GOLD SHEETS
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Ann = Annual
AIS* = All-in Spread (Drawn/Undrawn)
Cancel = Cancellation
CAN$ = Canadian Dollars
CBO = Competitive Bid Option
COF = Cost of Funds
Commit. = Commitment
CP = Commercial Paper
DIP = Debtor-in-Possession
DM = Deutschemarks
FF = Federal Funds
Ffr = French Francs
FQ = Fiscal Quarter
FY = Fiscal Year
GBR = Gold Base Rate
Guid.= Guidance Line (Uncommitted)
HK$ = Hong Kong Dollars
HLT = Highly Leveraged Transaction
is = Implied Senior
LIB = LIBOR (London
Interbank Offered Rate)
Lt = Lire
MMR = Money Market Rate
NA = Not Available/Not Applicable
P = Prime
PIK = Pay in Kind
SBLC = Standby Letter of Credit
Sfr= Swiss Francs
si = Senior Implied
TreasSpr = Treasury
TrLC = Trade Letter of Credit
Upfr. = Upfront
Util. Fee = Utilization Fee
Types of Loans
BL = Bridge Loan
LC = Letter of Credit
RC = Revolving Credit
TL = Term Loan
PARTIAL = No Pricing Info
Abbreviations
LEAGUE TABLE
2011 YTD U.S. New Money Bookrunner Volume
Bookrunner # of Market
Rank Bank Holding Company Volume Deals Share
1 Bank of America Merrill Lynch $51,021,082,391 240 22%
2 JP Morgan 37,727,848,041 154 16
3 Barclays Bank Plc 19,196,480,666 54 8
4 Morgan Stanley 17,653,750,000 32 7
5 Citi 16,598,608,247 50 7
6 Wells Fargo & Co 13,319,073,721 119 6
7 Credit Suisse 13,290,232,418 52 6
8 PNC Bank 5,620,669,428 50 2
9 General Electric Capital Corp 5,551,512,500 68 2
10 SunTrust Bank 4,965,225,000 50 2
11 Goldman Sachs & Co 4,853,665,000 20 2
12 Deutsche Bank 3,922,787,302 30 2
13 BNP Paribas SA 3,894,650,000 27 2
14 RBC Capital Markets 3,624,990,200 24 2
15 RBS 3,486,242,872 30 1
16 BMO Capital Markets 3,425,145,000 40 1
17 U.S. Bancorp 2,848,195,000 41 1
18 Mitsubishi UFJ Financial Group 2,788,397,250 17 1
19 Jefferies Finance LLC 2,254,500,000 13 1
20 UBS AG 2,245,300,000 14 1
21 KeyBank 1,951,375,000 24 1
22 Scotia Capital 1,866,460,000 14 1
23 Rabobank 1,705,200,000 12 1
24 Credit Agricole Corporate and Investment Bank S.A. 1,667,500,000 9 1
25 Societe Generale 943,960,000 10 1
Source: Thomson Reuters LPC
GOLD SHEETS – AUGUST 1, 2011 11* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
INVESTMENT GRADE DEALS
EXPRESS SCRIPTS INC BBB+/Baa3 (Sr.) $5.5B Corp. purposes
St. Louis, MO (PACKAGE)
$45B
SIC 5912, 8011, 6719
(Drug stores and
proprietary stores)
PARTIAL
REFI CREDIT
LEAD LENDERS: Citigroup - Arranger/Lead Arranger, Credit Suisse AG - Arranger/Lead Arranger
COMMENTS: Credit will replace the company’s $14B bridge loan which backs the takeover of Metro Health Solutions. Co. is asking for $1B tickets with
$700M allocated to the BL and $300M to this agreement. Assignments: Pro Rata = y.
$1.5B RC 60 08/05/2011 NA/NA Corp. purposes
(Part 1/2) 08/05/2016
$4B TL A 60 08/05/2011 LIB+175 175.0/NA Corp. purposes
(Part 2/2) 08/05/2016
FEDEX CORP BBB/Baa2 (Sr.) $1B RC 60 04/26/2011 P+25 Com 25 125.0/25.0 Corp. purposes
Memphis, TN A-2/P-2 (CP) (Unsec’d) 04/26/2016 LIB+125 CP backup
$39B Capital expend.
SIC 4513, 4215
(Air courier
services)
REFI CREDIT GUARANTOR(S): Credit is guaranteed by certain of co.’s subsidiaries.
LEAD LENDERS: JPMorgan Chase Bank (8.5%) - Admin. Agent/Lead Arranger, BNP Paribas SA (4.5%) - Documentation Agent, SunTrust Bank (4.5%)
- Documentation Agent, Citibank (8.5%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: BOA (6.5%), Bank of Nova Scotia (6.5%), Goldman Sachs Bank USA (6.5%), Morgan Stanley Bank (4.5%), Deutsche Bank (4%), RegBk
(4%), Mizuho Corporate Bank USA (3.5%), Wells Fargo Bank (3.5%), BONYM (2.5%), Bank of Tokyo-Mitsubishi (2.5%), Commerzbank AG (2.5%), Fifth
Third Bank (2.5%), HSBCBankUSA (2.5%), Ind Comm Bk of China (2.5%), Keybank N.A. (2.5%), PNC Bank NA (2.5%), SMBC (2.5%), US Bank (2.5%),
ComericaBk (2%), First Tennessee Bank NA (2%), KBC (2%), Standard Chartered Bank (2%), State Street Bank (2%)
COMMENTS: Credit refi nances co.’s previous $1B credit agreement dated 07/22/09. JP Morgan Securities LLC and Citigroup Global Markets Inc. acted
as joint lead arrangers and joint bookrunners. Law Firm: Simpson Thacher & Bartlett LLP (for lender). Pricing: (See grid). Default rate = +200 bps.
Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Financial Covenant(s): Max. leverage ratio of 0.7:1. Prepayments: Amount Reduction
= 100%. Guarantor Release = 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are not materially restricted. Required Lenders =
51%. Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $4,000. Pro Rata
= y. Min. hold = $5M.
Level Sr Rating P+ LIB+ Com
1 > or =A- 0 87.5 17.5
2 > or =BBB+ 0 100 22.5
3 > or =BBB 25 125 25
4 > or =BBB- 50 150 32.5
5 <BBB- 100 200 37.5
Pricing is as indicated initially, tied to co.’s senior unsecured LTD ratings by S&P and Moody’s thereafter. If split rated, higher rating applies. If split rated
by more than one level, level below higher rating applies.
NATIONWIDE HEALTH BBB-/Baa2 (Sr.) $800M TL 12 06/03/2011 P+50 Com 10 150.0/10.0 Corp. purposes
PROPERTIES INC (Unsec’d) 06/01/2012 LIB+150
Newport Beach, CA
$439.3M
SIC 6798
(Real estate
investment trusts)
REFI CREDIT
LEAD LENDERS: JPM Co - Admin. Agent/Lead Arranger, Credit Agricole SA - Arranger/Lead Arranger, Keybank NA - Arranger/Lead Arranger, Wells
Fargo & Co - Arranger/Lead Arranger
COMMENTS: Credit replaces co.’s previous $700M RC dated 10/20/05. Credit Agricole Corporate & Investment Bank, Keybank NA, Wells Fargo Securi-
ties LLC and JP Morgan Securities LLC acted as joint bookrunners and joint lead arrangers. Law Firms: Sherry Meyerhoff Hanson & Crance LLP and
Skadden Arps Slate Meagher & Flom LLP (for borrower). Pricing: Default rate = Applic. P+200 bps. Prime fl oor = one month LIBOR plus 100 bps.
No LIBOR fl oor. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.75:1; max. leverage ratio of 0.6:1. Min. net asset value of 85% of net asset
value as of closing. Max. secured debt ratio = 0.3:1. Max. unencumbered asset value ratio = 0.6:1. Indicated fi nancial covenant ratios required any
time acquisitions and dispositions by borrower are >$100M in any FQ. Indicated leverage ratio and unencumbered asset value ratio may be > 0.6:1 but
<= 0.65:1 for up to two consecutive FQs. Repayments: $800M install. on 06/01/2012. Prepayments: Debt Iss. Sweep = 100%. Equity Iss. Sweep =
100%. Amount Reduction = 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are not materially restricted. Required Lenders =
51%. Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata
= n. Elig. Assignees = commercial banks with total assets >$1B and combined capital and surplus >= $250M; life insurance cos. with admitted assets
>=$1B; nationally or internationally recognized investment banking cos. or other fi nancial institutions. Avg. life = 1 yrs.
GOLD SHEETS –August 1, 2011 12
PRAXAIR INC A/A2 (Sr.) $1.75B RC 60 07/28/2011 Com 8 NA/8.0 Corp. purposes
Danbury, CT A-1/P-1 (CP) 07/28/2016
$10.1B
SIC 2813, 3479, 3569
(Industrial gases)
PARTIAL
REFI CREDIT
LEAD LENDERS: Bank of America Merrill Lynch (9.14%) - Admin. Agent/Lead Arranger, Citibank (9.14%) - Syndications Agent/Lead Arranger, HSBC
(9.14%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Bank of Tokyo-Mitsubishi (7.43%), Deutsche Bank (7.43%), RBS (7.43%), Wells Fargo Bank (7.43%), Credit Suisse (5.71%), JP Morgan
Chase (5.71%), Sovereign Bank (5.71%), BBVA (4.29%), Societe Generale (4.29%), SMBC (4.29%), BONYM (2.86%), Bank of Nova Scotia (2.86%), US
Bank (2.86%), China Merchants Bank (1.43%), Intesa Sanpaolo (1.43%), NorthernTr (1.43%)
COMMENTS: Credit refi nances existing debt. Pricing: (See grid). Assignments: Pro Rata = y.
Level Sr Rating Com
1 > or =AA- 5
2 > or =A+ 6
3 > or =A 8
4 > or =A- 10
5 > or =BBB+ 15
6 <BBB+ 17.5
Pricing is tied to company’s CDS, with initial fl oor of 25bp and a cap of 125bp. Level 1 a fl oor of 20bp and a cap of 100bp applies; for Level 2 a fl oor of
22.5bp and a cap of 112.5bp applies; for Level 3 a fl oor of 25bp and a cap of 125bp applies; for Level 4 a fl oor of 50bp and a cap of 137.5bp applies; for
Level 5 a fl oor of 75bp and a cap of 162.5bp applies; and for Level 6 a fl oor of 100bp and a cap of 187.5bp applies.
SOUTHWEST BBB-/Baa3 (Sr.) $800M RC 60 04/28/2011 P+125 Com 37.5 225.0/37.5 Corp. purposes
AIRLINES CO (Unsec’d) 04/28/2016 LIB+225 SBLC 225 Capital expend.
Dallas, TX
$12.1B
SIC 4512
(Air transportation,
scheduled)
REFI CREDIT
LEAD LENDERS: JP Morgan (15%) - Admin. Agent/Lead Arranger, Citibank (15%) - Syndications Agent/Lead Arranger, Barclays Capital Group (10.63%)
- Co-agent, Deutsche Bank AG (10.63%) - Co-agent, Goldman Sachs & Co (10.63%) - Co-agent, Morgan Stanley (10.63%) - Co-agent
OTHERS IN DEAL: BNP Paribas (6.88%), Comerica Bank NA (6.88%), Societe Generale (6.88%), WellsFar&Co (6.88%)
COMMENTS: Credit refi nances co.’s previous credit agreement dated 09/29/09. JP Morgan Securities LLC and Citigroup Global Markets Inc. acted as
co-lead arrangers and joint bookrunners. Law Firm: Simpson Thacher & Bartlett LLP (for lender). Pricing: (See grid). Default rate = +200 bps. Prime
fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Option(s): $250M LC. Financial Covenant(s): Min. interest coverage ratio of 1.25:1. Indicated min.
interest coverage ratio may be reduced to 0.8:1 for two consecutive FQs, but co. must pay a quarterly fee of 25 bps to each bank for reduction. Prepay-
ments: Amount Reduction = 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are not materially restricted. Required Lenders =
51%. Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata
= y. Elig. Assignees: commercial banks with total assets >$1B.
Level Sr Rating P+ LIB+ Com SBLC
1 > or =A 0 100 12.5 100
2 > or =A- 12.5 112.5 15 112.5
3 > or =BBB+ 25 125 17.5 125
4 > or =BBB 50 150 25 150
5 > or =BBB- 75 175 32.5 175
6 <BBB- 125 225 37.5 225
Pricing is as indicated initially, tied to co.’s senior unsecured LTD ratings by S&P and Moody’s thereafter. SBLC fee = LIBOR margin plus co. also pays an
undisclosed issuance fee. If split rated, higher rating applies. If Split Rated by more than one level, level below higher rating applies.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
INVESTMENT GRADE DEALS cont’d
GOLD SHEETS – AUGUST 1, 2011 13* - ALL- IN SPREAD, DRAWN / UNDRAWN
(Deal cont’d on next page)
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
M&A DEALS cont’d
BOJANGLES $215M LBO
RESTAURANTS INC (PACKAGE)
Charlotte, NC
SIC 5812
(Eating places)
PARTIAL
SPONSOR(S): Advent International Corp.
LEAD LENDERS: Jefferies Finance LLC - Arranger/Lead Arranger
COMMENTS: Credit backs the company’s buyout by Advent International. Credit comes with a roughly 45% equity check, which would value the deal at
approximately $390M. Jefferies is leading the deal. Assignments: Pro Rata = n.
$25M RC 60 08/05/2011 NA/NA LBO
(Part 1/2) 08/05/2016
$190M TL 72 08/05/2011 LIB+625 Upfr 100 625.0/NA LBO
(Part 2/2) 08/05/2017
COMMENTS: Pricing: Libor fl oor = 1.25%. OID = 99.
EXPRESS SCRIPTS INC BBB+/Baa3 (Sr.) $14B BL 12 08/05/2011 LIB+175 175.0/NA Takeover
St. Louis, MO 08/04/2012
$45B
SIC 5912, 8011, 6719
(Drug stores and
proprietary stores)
LEAD LENDERS: Credit Suisse AG - Admin. Agent/Lead Arranger, Citibank - Syndications Agent/Lead Arranger, Bank of America Merrill Lynch - Co-
arranger, Bank of Tokyo-Mitsubishi Group - Co-arranger, Credit Agricole SA - Co-arranger, Deutsche Bank AG - Co-arranger, Mizuho Bank - Co-arranger,
Morgan Stanley - Co-arranger, Royal Bank of Scotland Plc [US] - Co-arranger, Sumitomo Mitsui Banking Corp - Co-arranger, SunTrust Bank - Co-arranger,
Wells Fargo Bank - Co-arranger
COMMENTS: Credit fi nances the company’s $29.1B takeover of Medco Health Solutions,for $71.36 per share. The facility will be replaced by a permanent
bond and loan fi nancing consisting of a $1.5B RC and $4B TLA in August. Co. is asking for $1B tickets with $700M allocated to this facility and $300M
allocated to the $5.5B pro-rata agreement. Assignments: Pro Rata = y.
PROLOGIS INC BBB-/Baa2 (Sr.) $1.778B Acquis. line
Denver, CO (PACKAGE)
$909M
SIC 6798, 6531, 6512
(Real estate
investment trusts)
REFI CREDIT ADDITIONAL BORROWER(S): Credit is arranged for Prologis LP and certain affi liate borrowers.
COMMENTS: Credit is arranged to fi nance the merger between ProLogis and AMB Property Corp. Credit refi nances existing credit agreements dated
07/16/07 between AMB Property LP and Bank of America, an agreement dated 11/10/10 between AMP Property LP and JP Morgan Chase Bank NA,
and an agreement dated 10/06/05 between Old Prologis and Bank of America. Credit may be increased up to $2.75B (or its equivalent) and may be
extended for one additional year. Merrill Lynch Pierce Fenner & Smith Inc., JP Morgan Securities LLC, RBS Securities Inc. and Sumitomo Mitsui Bank-
ing Corp. acted as global lead arrangers and global bookrunners. Law Firms: Mayer Brown LLP, Weidema van Tol, Anderson Mori & Tomotsune and
Morrison & Foerster LLP (for borrower). Haynes & Boone (for lender). Pricing: (See grid). Default rate = +200 bps. Prime fl oor = one month LIBOR.
No LIBOR fl oor. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.5:1; min. debt service coverage ratio of 1.5:1; max. loan to value ratio of 0.6:1.
Tangible Net Worth = $10B. Indicated loan to value ratio may be >0.6:1 but <=0.65:1 after any material acquisition. Prepayments: Amount Reduction
= 100%. Guarantor Release = 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are materially restricted. Required Lenders = 51%.
Term Changes = 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata = y.
Revolver/Line >= 1 Yr. EUR 480 M: Assign. min. = EUR 5 M Assign. Fee = EUR -,999,999. Assig. fee = US$3,500.Revolver/Line >= 1 Yr. JPY 22896 M :
Assign. min. = JPY 5 M Assign. Fee = JPY -,999,999. Assig. fee = US$3,500.
BBB-/Baa2 $702.432M RC 48 06/03/2011 P+40 Ann 30 170.0/30.0 Acquis. line
(At Close Sr.) (Part 1/3) 06/03/2015 LIB+140 SBLC 152.5
(Unsec’d) ExtenFee 20
GUARANTOR(S): ProLogis Inc. Credit is also guaranteed by Prologis LP.
GOLD SHEETS –August 1, 2011 14
LEAD LENDERS: Bank of America Merrill Lynch (10%) - Admin. Agent/Lead Arranger, JP Morgan (10%) - Syndications Agent/Lead Arranger, Royal Bank
of Scotland Plc [RBS] (10%) - Syndications Agent/Lead Arranger, Sumitomo Mitsui Banking Corp (6.63%) - Syndications Agent
OTHERS IN DEAL: Goldman Sachs & Co. (8.84%), RBC (8.84%), Wells Fargo Bank (8.84%), Citicorp NA (6.63%), Deutsche Bank (6.63%), MorganStnlyS-
rFund (6.63%), HSBC (3.68%), Calyon Corporate & Invest (2.95%), Credit Suisse (2.95%), ING Bank (2.95%), Scotiabank Europe Plc (2.95%), CompassBk
(1.47%), NorthernTr, PNCBk
COMMENTS: Facility labelled as euro tranche. Facility is also available in US dollars, pounds sterling and yen. Option(s): $73.2M LC and $146.3M swingline.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 1152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
BBB-/Baa2 $285.273M RC 48 06/03/2011 P+40 Ann 30 170.0/30.0 Acquis. line
(At Close Sr.) (Part 2/3) 06/03/2015 LIB+140 SBLC 152.5
(Unsec’d) ExtenFee 20
GUARANTOR(S): ProLogis Inc. Credit is also guaranteed by Prologis LP.
LEAD LENDERS: Bank of America Merrill Lynch (14.38%) - Admin. Agent/Lead Arranger, JP Morgan (14.38%) - Syndications Agent/Lead Arranger, Royal
Bank of Scotland Plc [RBS] (14.38%) - Syndications Agent/Lead Arranger, Sumitomo Mitsui Banking Corp (10.66%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Citibank Japan Ltd (10.66%), Deutsche Bank (10.66%), Morgan Stanley MUFG Loan (10.66%), Bank of Nova Scotia (3.55%), Calyon
Corporate & Invest (3.55%), Credit Suisse (3.55%), ING Bank (3.55%), Goldman Sachs & Co., HSBC, NorthernTr, PNCBk
COMMENTS: Facility labelled as yen tranche. Facility is also available in US dollars, Euros and pounds sterling. Option(s): $26.8M LC.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
BBB-/Baa2 $790M RC 48 06/03/2011 P+40 Ann 30 170.0/30.0 Acquis. line
(At Close Sr.) (Part 3/3) 06/03/2015 LIB+140 SBLC 152.5
(Unsec’d) ExtenFee 20
GUARANTOR(S): ProLogis Inc. Credit is also guaranteed by Prologis LP.
LEAD LENDERS: Bank of America Merrill Lynch (5.49%) - Admin. Agent/Lead Arranger, Sumitomo Mitsui Banking Corp (6.33%) - Syndications Agent,
JP Morgan (5.49%) - Syndications Agent/Lead Arranger, Royal Bank of Scotland Plc [RBS] (5.49%) - Syndications Agent/Lead Arranger
OTHERS IN DEAL: Goldman Sachs & Co. (8.23%), RBC (8.23%), Wells Fargo Bank (8.23%), Citicorp NA (6.33%), Deutsche Bank (6.33%), US Bank (6.33%),
Union Bank NA (6.33%), Morgan Stanley Bank (4.43%), HSBC (3.16%), PNCBk (3.16%), Bank of Nova Scotia (2.53%), Calyon Corporate & Invest (2.53%),
Credit Suisse (2.53%), ING Bank (2.53%), NorthernTr (2.53%), CompassBk (1.9%), MorganStnlySrFund (1.9%)
COMMENTS: Facility labelled as US tranche. Facility is also available in Euros, pounds sterling, yen and Canadian dollars. Option(s): $150M LC and
$100M swingline.
Level Sr Rating P+ LIB+ Ann SBLC
1 > or =A- 17.5 117.5 22.5 130
2 > or =BBB+ 25 125 25 137.5
3 > or =BBB 40 140 30 152.5
4 > or =BBB- 65 165 35 177.5
5 <BBB- 105 205 45 217.5
Pricing is as indicated initially thru 10/03/11, tied to co.’s senior unsecured LTD ratings by S&P, Moody’s and Fitch thereafter. If rated by all three agencies,
higher of S&P and Moody’s applies. If rated by only two agencies, higher rating applies. SBLC fee includes a 12.5 bps issuance fee.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
M&A DEALS cont’d
PROLOGIS INC
CONT’D
GOLD SHEETS – AUGUST 1, 2011 15
ASSOCIATED ESTATES $125M TL 60 06/03/2011 P+80 Cancel 50 180.0/NA Corp. purposes
REALTY CORP (Unsec’d) 06/02/2016 LIB+180
Richmond Heights, OH
$153.7M
SIC 6798, 6513, 6531
(Real estate
investment trusts)
REFI CREDIT GUARANTOR(S): Co.’s subsidiaries acted as guarantors.
LEAD LENDERS: PNC Bank (24%) - Admin. Agent/Lead Arranger, US Bank NA (20%) - Documentation Agent, Wells Fargo & Co (24%) - Syndications Agent
OTHERS IN DEAL: RBS Citizens (11%), RaymndJamesCorp (11%), Citicorp (10%)
COMMENTS: Credit refi nances co.’s previous RC dated 10/18/10. PNC Capital Markets LLC acted as lead arranger. Law Firms: Greenberg Traurig LLP
(for borrower). SNR Denton (for lender). Pricing: (See grid). Default rate = +400 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor.
Indicated cancellation fee applies thru year one. Financial Covenant(s): Min. fi xed charge coverage ratio of 1.5:1; max. loan to value ratio of 0.6:1. Max.
consolidated unsecured debt to unencumbered real property value ratio = 0.6:1. Min. unencumbered real property adjusted NOI to consolidated interest
expense on consolidated unsecured debt ratio = 2:1. Min. % of total residential units in the qualifying unencumbered projects that are physically occupied
by tenants = 85%. Min. consolidated tangible net worth = $500M plus 85% of proceeds from any equity issuances. Prepayments: Amount Reduction
= 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are materially restricted. Required Lenders = 66.67%. Term Changes = 100%.
Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata = n.
Level Loa/Value P+ LIB+
1 >0.55 < or =0.6 155 255
2 >0.5 < or =0.55 130 230
3 >0.45 < or =0.5 105 205
4 < or =0.45 80 180
Pricing is as indicated initially thru 06/30/11, tied to co.’s consolidated outstanding debt to total asset value ratio thereafter.
DRESSER-RAND BB+/Ba1 (Sr.) $1B Corp. purposes
Houston, TX B+/B1 (Sub.) (PACKAGE)
$2B
SIC 3511
(Turbines and
turbine generator
sets)
REFI CREDIT ADDITIONAL BORROWER(S): D-R Holdings (France) SAS.
COMMENTS: Credit refi nances co.’s previous credit agreement dated 08/30/07. Indicated maturity may be extended to 03/15/16, if by 05/01/14, the
domestic borrower’s 2014 senior subordinated notes have (i) had their maturity extended to a date >= 6 months after 03/15/16, (ii) been repaid in cash in
full or (iii) been refi nanced by new unsecured senior or senior subordinated notes having maturity >= 6 months after 03/15/16. Credit may be increased
up to $1.15B. Credit comes in conjunction with $375M 144A senior subordinated notes due 05/01/21 at 6.5%. JP Morgan Securities LLC acted as sole lead
arranger and sole book manager. Law Firms: Gibson Dunn & Crutcher LLP and Shearman & Sterling LLP (for borrower). Vinson & Elkins LLP (for lender).
Pricing: (See grid). Default Rate = +200 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Financial Covenant(s): Min. interest cover-
age ratio of 3:1; max. debt to EBITDA ratio of 3.75:1. Max. Capex (initial) = $110M. Max. Capex (fi nal) = $150M. Capex carryover = 100%. Debt to EBITDA =
consolidated debt to consolidated EBITDA. Prepayments: Assets Sales Sweep = 100%. Indicated asset sales sweep not required if proceeds <= $5M or
if proceeds are reinvested within one year. Indicated prepayments apply to TL facilities. Amount Reduction = 100%. Guarantor Release = 100%. Margin
Reduction = 100%. Tenor Extension = 100%. Dividends are materially restricted. Required Lenders = 51%. Term Changes = 100%. Collateral Release
= 100%. Assignments: Company consent required, Agent consent required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata = n. Min. hold = $5M.
BB+/Ba1 $600M RC 38 03/15/2011 P+100 Upfr 87.5 200.0/37.5 Corp. purposes
(At Close Sr.) (Part 1/3) 05/01/2014 LIB+200 Com 37.5
B+/B1 (Sec’d) SBLC 212.5
(At Close Sub.)
B1 (At Close CP)
LEAD LENDERS: JP Morgan (9%) - Admin. Agent/Lead Arranger, Bank of America (8.5%) - Co-agent, Commerzbank AG (8.5%) - Co-agent, DnB NOR
Bank ASA (8.5%) - Co-agent, Sovereign Bank (8.5%) - Co-agent, Wells Fargo & Co (8.5%) - Co-agent
OTHERS IN DEAL: BBVA Compass (6.5%), Bank of Tokyo-Mitsubishi (6.5%), Citigroup (6.5%), HSBCBankUSA (6.5%), Sumitomo Mitsui Banking C (6.5%),
Barclays Bank Plc (4%), US Bank (4%), BB&T Cap (2%), ComericaBk (2%), Morgan Stanley (2%), NorthernTr (2%)
COMMENTS: Facility is also available in Euros and pounds sterling. Option(s): $600M LC and $30M swingline. LC can be Financial or Performance LC.
LC is also available in alternate currency. Euro sublimit = $350M. Pounds sterling sublimit = $75M. Collateral: Unknown.
Level Debt/CF P+ LIB+ Com SBLC
1 > or =3 175 275 50 287.5
2 > or =2.25 <3 150 250 50 262.5
3 > or =1.5 <2.25 125 225 37.5 237.5
4 <1.5 100 200 37.5 212.5
Pricing is as indicated initially, tied to co.’s consolidated debt to consolidated EBITDA ratio thereafter. Indicated SBLC fee applies for Financial LC. Co.
pays Performance LC as follows: 177.5 bps for Level 1, 162.5 bps for Level 2, 147.5 bps for Level 3 and 132.5 bps for Level 4. Financial and Performance
LC fee includes a 12.5 bps issuance fee.
* - ALL- IN SPREAD, DRAWN / UNDRAWN
(Deal cont’d on next page)
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
LEVERAGED DEALS cont’d
Non-M&A loans with LIBOR spreads ≥ 275 bps.
GOLD SHEETS –August 1, 2011 16
BB+/Ba1 $240M Del. Draw 38 03/15/2011 P+100 Upfr 87.5 200.0/37.5 Corp. purposes
(At Close Sr.) (Part 2/3) 05/01/2014 LIB+200 Com 37.5
B+/B1 (Sec’d)
(At Close Sub.)
B1 (At Close CP)
LEAD LENDERS: JP Morgan (9%) - Admin. Agent/Lead Arranger, Bank of America (8.5%) - Co-agent, Commerzbank AG (8.5%) - Co-agent, DnB NOR
Bank ASA (8.5%) - Co-agent, Sovereign Bank (8.5%) - Co-agent, Wells Fargo & Co (8.5%) - Co-agent
OTHERS IN DEAL: BBVA Compass (6.5%), Bank of Tokyo-Mitsubishi (6.5%), Citigroup (6.5%), HSBCBankUSA (6.5%), Sumitomo Mitsui Banking C (6.5%),
Barclays Bank Plc (4%), US Bank (4%), BB&T Cap (2%), ComericaBk (2%), Morgan Stanley (2%), NorthernTr (2%)
COMMENTS: Collateral: Unknown. Repayments: 8 Qtrly. installs. of $3M beg. 06/30/2012; $216M install. on 05/01/2014. Avg. life = 3.18 yrs.
Level Debt/CF P+ LIB+ Com
1 > or =3 175 275 50
2 > or =2.25 <3 150 250 50
3 > or =1.5 <2.25 125 225 37.5
4 <1.5 100 200 37.5
Pricing is as indicated initially, tied to co.’s consolidated debt to consolidated EBITDA ratio thereafter.
BB+/Ba1 $160M TL 38 03/15/2011 P+100 200.0/NA Corp. purposes
(At Close Sr.) (Part 3/3) 05/01/2014 LIB+200
B+/B1 (Sec’d)
(At Close Sub.)
B1 (At Close CP)
LEAD LENDERS: JP Morgan (9%) - Admin. Agent/Lead Arranger, Bank of America (8.5%) - Co-agent, Commerzbank AG (8.5%) - Co-agent, DnB NOR
Bank ASA (8.5%) - Co-agent, Sovereign Bank (8.5%) - Co-agent, Wells Fargo & Co (8.5%) - Co-agent
OTHERS IN DEAL: BBVA Compass (6.5%), Bank of Tokyo-Mitsubishi (6.5%), Citigroup (6.5%), HSBCBankUSA (6.5%), Sumitomo Mitsui Banking C (6.5%),
Barclays Bank Plc (4%), US Bank (4%), BB&T Cap (2%), ComericaBk (2%), Morgan Stanley (2%), NorthernTr (2%)
COMMENTS: Collateral: Unknown. Repayments: 8 Qtrly. installs. of $2M beg. 06/30/2012; $144M install. on 05/01/2014. Avg. life = 3.18 yrs.
Level Debt/CF P+ LIB+
1 > or =3 175 275
2 > or =2.25 <3 150 250
3 > or =1.5 <2.25 125 225
4 <1.5 100 200
Pricing is as indicated initially, tied to co.’s consolidated debt to consolidated EBITDA ratio thereafter.
GLIMCHER $250M RC 9 03/31/2011 P+300 Com 40 400.0/40.0 Work. cap.
PROPERTIES LP (Sec’d) 12/14/2011 LIB+400 SBLC 412.5 Capital expend.
Columbus, OH ExtenFee 30 Corp. purposes
SIC 6798
(Real estate
investment trusts)
REFI CREDIT
GUARANTOR(S): Glimcher Realty Trust. Co.’s subsidiaries also acted as guarantors.
LEAD LENDERS: Keybank NA (14%) - Admin. Agent/Lead Arranger, Bank of America Merrill Lynch (14%) - Syndications Agent/Lead Arranger, US Bank
NA (14%) - Co-agent, Wells Fargo Bank (14%) - Co-agent, Huntington Bank (12%) - Co-agent, Charter One Bank NA - Co-agent
OTHERS IN DEAL: PNCBk (12%), Goldman Sachs Bank USA (8%), Aareal Bank (6%), Eurohypo-Deutsche Bk (6%)
COMMENTS: Credit amends & restates company’s $470M agreement dated 12/14/2006. Credit may be increased up to $300M and extended for two
additional one-year periods. Keybanc Capital Markets Inc. and Merrill Lynch Pierce Fenner & Smith Inc. acted as joint lead arrangers. Pricing: (See grid).
Default rate = +400 bps. Prime fl oor = one month LIBOR plus 100 bps. No LIBOR fl oor. Option(s): $50M LC and $35M swingline. Financial Covenant(s):
Min. fi xed charge coverage ratio of 1.35:1; min. interest coverage ratio of 1.75:1; max. loan to value ratio decreasing from 0.65:1 to 0.62:1. Net Worth =
$800M + build up. Min. consolidated net worth = $800M plus 75% of equity contributions or sales of treasury stock received by co. Collateral: Real Estate.
Prepayments: Amount Reduction = 100%. Guarantor Release = 100%. Margin Reduction = 100%. Tenor Extension = 100%. Dividends are materially
restricted. Required Lenders = 66.67%. Term Changes = 100%. Collateral Release = 100%. Assignments: Company consent required, Agent consent
required. Assign. min. = $5M. Assign. fee = $3,500. Pro Rata = y. Min. hold by Keybank NA = 10% of total commitment.
Level Loa/Value P+ LIB+ SBLC
1 >0.6 325 425 437.5
2 >0.55 < or =0.6 300 400 412.5
3 >0.5 < or =0.55 250 350 362.5
4 < or =0.5 225 325 337.5
Pricing is as indicated initially, tied to co.’s consolidated outstanding debt to total asset value ratio thereafter. SBLC fee = LIBOR margin plus a 12.5 bps
issuance fee (min. of $1.5K).
* - ALL- IN SPREAD, DRAWN / UNDRAWN
BORROWER RATINGS AMOUNT TYPE MATUR. ACT./EXP. SPREADS FEES AIS* PURPOSE
LEVERAGED DEALS cont’d
Non-M&A loans with LIBOR spreads ≥ 275 bps. DRESSER-RAND
CONT’D
GOLD SHEETS – AUGUST 1, 2011 17
(NEWS cont’d on page 18)
Despite the uptick in volatility seen in the
broader markets, the U.S. leveraged loan market
witnessed continued strength in the form of a
handful of downward price fl exes last week as a
majority of loans currently in market were able
to slash spreads during syndication.
“There’s still plenty of demand for good qual-
ity credits out there,” noted one market player.
Despite its B2 corporate family rating, sporting
goods seller Academy Sports & Outdoors was
able to cut pricing on its $840 million covenant-
lite loan to back its leveraged buyout by Kohlberg,
Kravis & Roberts. A good underlying business
profi le and positive same store sales through the
downturn helped investors get comfortable with
the deal. A large equity check from the sponsor
also helped.
Nevertheless, Morgan Stanley played it some-
what safe when it released initial price talk on the
deal. Originally, the deal was talked at LIB+475-
500 with a 1.5 percent Libor fl oor and a 98.5 OID
for a relatively wide yield of more than 7 percent
given a three-year maturity. That compares to
an average yield of around 6.3 percent in 2Q11
for similarly rated credits, according to data
compiled by Thomson Reuters LPC.
“Some issuers have been starting out (syndica-
tions) with wider pricing but then tighten pretty
quickly once they begin getting traction,” noted
another market player. “Banks don’t want to get
caught having to go the other way.”
Ultimately, Academy Sports took the spread
down to LIB+450 with a 1.5 percent Libor fl oor
and a 99 OID for a yield to a three-year maturity
of around 6.37 percent, a yield more in line with
the recent average.
Despite the cut, the loan performed admirably
in the secondary market, trading up a full point
to 100-100.25 on the break last Wednesday.
“A lot of the higher-quality names originally
came out with massive discounts so it looks like
they’re tightening dramatically. But in reality
they’re still trading wide to the secondary mar-
ket,” noted a portfolio manager.
Further helping to bolster demand for new is-
sues, the institutional loan pipeline has dwindled
amid the usual summer lull. Last week, the
forward calendar dropped from more than $26
billion to $18 billion as a handful of existing
syndications closed and few new ones appeared
Academy Sports fl exes down amid continued loan demandto take their place.
“A lot of deals have been pushed until after
Labor Day,” the portfolio manager said. “So
whatever deals there are aren’t facing too much
competition for investor attention.”
Helped by its Ba2 rating profi le, OM Group
last week cut pricing on its cross-border $900
million loan backing its acquisition of Germany’s
Vacuumschmelze GmbH & Co. The interest
margin on the $350 million term loan B was
reduced to LIB+425 from initial price talk of
LIB+475-500. In addition, the margin on the
$250 million (equivalent) euro term loan B was
cut to EUR+475 from EUR+500.
And Capsugel shaved 50bp off the coupon on
its $920 million covenant-lite loan and tightened
its OID by another 50bp. The B1/BB- rated facility
priced at LIB+400 with a 1.25 percent Libor fl oor
and a 99.5 OID for a yield of around 5.4 percent.
And when the loan broke for trading last
Wednesday, it was quoted 100.25-100.75.
“There’s still a lot of cash in the system right
now,” the portfolio manager said. “So guys are
going into these deals pretty aggressively.”
THE WEEK IN NEWS
Immucor preps $700M LBO fi nancing
for launch
Immucor Inc is preparing to launch a $700
million credit facility Tuesday via JP Morgan
and Citigroup to back its $1.97 billion buyout
by TPG Capital, according to sources familiar
with the transaction.
The fi nancing includes a $100 million, fi ve-year
revolver and a $600 million, seven-year senior
secured term loan. Earlier, Immucor tapped a
$400 million senior unsecured bridge facility
to assist in the $1.1 billion fi nancing package.
Immucor manufactures and sells reagents and
systems used by hospitals, reference laboratories
and donor centers to detect and identify certain
properties of the cell and serum components of
blood prior to transfusion. – C.T.
Leveraged fi nance co-heads leave
Nomura
Julie Persily and Steven Seltzer, co-heads of
Nomura Securities’ leveraged fi nance group,
have both left the fi rm, sources said.
Persily and Seltzer were named co-heads of
the business in July 2010.
Before Nomura, Persily was at Citigroup where
she was co-head of leveraged fi nance. Seltzer
joined Nomura from North Sea Partners. – C.F.
Sealed Air unseals price talk;
outlines TLB structure
Sealed Air Corp unveiled price talk Tuesday
on the $1.45 billion pro rata portion of its $4.5
billion acquisition fi nancing led by Citigroup.
The deal, which backs Sealed Air’s $4.9 billion
acquisition of Diversey Inc, consists of a $700
million, fi ve-year revolving credit facility and a
$920 million, fi ve-year term loan A, of which $80
million will be a Canadian dollar denominated
equivalent, sources said.
Price talk on the pro rata portion is LIB+250
with no Libor fl oor or OID.
Commitments are due August 10.
Alongside the pro rata portion, Citi, at a later
date, will syndicate a $1.3 billion seven-year
term loan B.
As previously reported, Sealed Air expects to
have $3.8 billion fully funded at closing and will
leave the combined companies with pro forma
net leverage of 4.4 times.
Sealed Air manufactures bubble wrap and
other protective materials for food and industrial
packaging. – C.T.
Level 3 launches $650M TLB for
launch
Bank of America Merrill Lynch and Citi
launched Thursday a $650 million term loan
B for Level 3 Communications, sources said.
In an SEC fi ling from April, Level 3 had said it
would raise the $650 million TLB alongside a
$1.1 billion senior unsecured bridge loan. At the
time, the company had also said that the TLB
would be covenant-lite and would be talked at
LIB+400 with a 1.5 percent Libor fl oor and a
99 OID. The bridge loan would be priced at 14
percent, the fi ling said.
Proceeds are to back Level 3’S acquisition of
Global Crossing for about $1.9 billion. – S.M./C.T.
LPS sets price talk on TLB
Lender Processing Services (LPS) set price talk
of LIB+325-350 with a 1 percent Libor fl oor and
a 99.5 OID on its TLB, sources said. The deal,
which was launched Thursday by JP Morgan,
includes a $400 million revolver, a $350 million,
fi ve-year TLA and a $550 million, seven-year
TLB. Proceeds are to refi nance debt.
In 2008, LPS raised a $510 million TLB, a $700
million TLA and a $140 million revolver as part
of its spin-off from Fidelity National Informa-
tion Services.
LPS is a provider of integrated technology
and services to the mortgage and real estate
industries. – S.M.
– by Caleb Frazier
GOLD SHEETS –August 1, 2011 18
THE WEEK IN NEWS
Dynegy bumps pricing to fi ll book despite threat of lawsuitU.S. independent power producer Dynegy Inc,
after failing to fi ll the book on its $1.7 billion
refi nancing deal by the July 22 commitment
deadline, last week raised pricing and revised
tranching to better match investor demand for
the paper, sources said.
The company’s covenant-lite refi nancing is
split between two facilities, the “GasCo” and
“CoalCo” loans. Price talk on the “GasCo” loan
was bumped up by 125bp, and the loan is now
expected to be sold at a wider discount. Ad-
ditionally, $200 million was shifted from the
“GasCo” loan to the “CoalCo” facility.
The now $1.1 billion “GasCo” and $600 million
“CoalCo” facilities are priced in line with each
other. Both offer lenders a spread of LIB+775
with a 1.5 percent Libor fl oor (unchanged) and
an OID of 98.
“This deal is priced to sell,” said one portfolio
manager, of the revised pricing. “I don’t think
they’ll have any problems selling.”
Following the changes, sources said Dynegy
had received several sizable tickets at the new
talk.
However, at launch, the proposed $400 million
“CoalCo” loan, the smaller but initially more
richly priced of the two, was selling more suc-
cessfully than the proposed $1.3 billion “GasCo”
loan that received a tepid response from inves-
tors, sources said.
That same day, two lawsuits were fi led against
the company, further complicating the syndica-
tion process that marks the fi rst step in Dynegy’s
restructuring efforts.
The restructuring is led by the company’s two
largest shareholders, investor Carl Icahn and
hedge fund Seneca Capital.
Proceeds from the two new credit facilities will
be used to refi nance debt at Dynegy Holdings
Inc (DHI). However, under the terms of the credit
facilities, Dynegy’s gas and coal assets have
been ring-fenced, moving them away from the
– by Leela Parker, Clinton Townsend
DB markets $1.88 billion Silgan refi
Deutsche Bank is in the market with a $1.88
billion refi nancing for Silgan Holdings, sources
said. The facility comprises an $800 million, fi ve-
year revolver and multi-tranched term loan A.
The TLA is split between a $520 million
tranche, a 335 million euro piece, and a C$81
million tranche. All three tranches have six-year
maturities.
The $520 million has been upsized from $400
million.
Pricing is tied to a leveraged base grid and
opens at LIB+175.
The facility was expected to close last week.
In April, Silgan lined up a $4.5 billion debt
fi nancing package also via BofA Merrill Lynch
to back its acquisition of Graham Packaging.
It included an $800 million fi ve-year multicur-
rency revolver, a $900 million six-year TLA, a
$2.3 billion, seven-year TLB and a $500 million
senior unsecured bridge loan.
The loan was cancelled when Silgan was outbid
by Reynolds Group Holdings. – M.S.
La Paloma offers price talk on
$424M refi
La Paloma, which launched via Bank of America
Merrill Lynch on July 21, offered price talk on its
$409.2 million refi nancing facility, according to
sources familiar with the deal.
The deal includes a $15 million fi ve-year revolv-
ing credit facility and a $299.2 million six-year
fi rst-lien term loan guided at LIB+525-550 with
a 96-97 OID. Also included is a $110 million
seven-year term loan guided at LIB+875 with
a 97 OID. Both fi rst and second-lien tranches
have a 1.5 percent Libor fl oor.
Proceeds are to refinance existing debt,
prefund a debt service reserve, fund 2011-2013
major maintenance and cash collateralize $30.2
million of LCs.
La Paloma Generating owns and operates a
natural gas-fi red power generation facility in
Kern County, California. – C.T.
Fogo De Chao sets price talk on
$205M facility
Fogo De Chao set price talk Tuesday on its $205
million credit facility at a bank meeting with JP
Morgan, sources said. The new facility consists
of a $10 million fi ve-year revolving credit facil-
ity and a $195 million seven-year term loan B.
Price talk on the TLB was guided at LIB+475-
500 with a 1.25 percent Libor fl oor and a 99 OID.
Proceeds from the facility will fi nance the
acquisition of shares from current shareholders.
Brazilian private equity fi rm GP Investments cur-
rently owns about 35 percent of Fogo De Chao.
Fogo De Chao is a churrascaria restaurant
chain in the U.S. and Brazil. – C.T.
MSC Software sets price talk on
dividend recap
MSC Software Corp set price talk Thursday at
LIB+500 with a 1.5 percent Libor fl oor on its $215
million six-year fi rst-lien term loan, according to
sources familiar with the deal.
An OID has yet to be determined. However,
lenders will enjoy a 101 soft call for one year.
Proceeds from the Bank of America Merrill
Lynch-led loan will fund a dividend to spon-
sors Symphony Technology Group and Elliott
Management Corp, who bought MSC in 2009
for $360 million.
MSC Software manufactures design related
software which helps engineers create virtual
prototypes. – C.T.
CHI Overhead Doors sets price talk on
buyout loan
Price talk is out on CHI Overhead Doors’ buyout
loan, sources said.
The $127.5 million, six-year fi rst-lien term loan
is talked at LIB+525 with a 1.5 percent Libor
fl oor and a 99 OID. The $51 million, 6.5-year
second-lien term loan is talked at LIB+925 with
a 1.5 percent Libor fl oor and a 98 OID.
As reported earlier, the deal was launched
Wednesday by GE Capital and Wells Fargo. The
rest of the credit is fi lled out by a $25 million,
fi ve-year revolver.
Proceeds are to back CHI’s sale to Friedman,
Fleischer & Lowe from JLL Partners.
CHI Overhead Doors is a garage door company
and a manufacturer of residential sectional
garage doors, as well as commercial sectional
and rolling steel. – S.M.
— cont’d from p. 17
debt laden DHI to create two new entities with
no existing debt or liabilities.
Ring-fencing ensures that the assets securing
the “GasCo” and “CoalCo” facilities are bank-
ruptcy remote in the event of a DHI bankruptcy.
In other words, only the new lenders to these
facilities have a claim against the assets.
LibertyView Capital and PSEG, holders of
lease obligations guaranteed by DHI, argue in
two separate lawsuits that the creation of the
bankruptcy remote entities increases the risk of
default and violates DHI’s guarantee of the lease
obligations in the event of a default.
“From a plain reading of the covenants these
lawsuits are a bit of a stretch,” said Chris Chaice,
analyst at Covenant Review, an independent
credit research fi rm.
A Delaware court was expected to rule by this
past Friday on whether Dynegy’s proposed debt
restructuring should be put on hold, Reuters
reported last week, citing a Dynegy spokesman.
GOLD SHEETS – AUGUST 1, 2011 19
THE WEEK IN NEWS
(NEWS cont’d on page 22)
Rock Ohio Caesars sets price talk on
$125M TL
Price talk on Rock Ohio Caesars’ $125 million,
six-year fi rst-lien term loan is LIB+650 with a
1.5 percent Libor fl oor and a 98 OID, sources
said. The loan is non-callable for two years and
thereafter callable at 102, 101. The deal was
launched Wednesday by Credit Suisse, Deutsche
Bank and Citadel.
Rock Ohio Caesars is a joint venture between
Caesars Entertainment Corp and Rock Gaming.
The new facility consists of a $25 million fi ve-
year revolving credit facility, the $125 million
six-year fi rst-lien term loan, and a $125 million
six-year delayed-draw term loan.
Rock Ohio Caesars will also have $50 million
of incremental capacity in either the revolving
credit facility or the term loan.
Alongside the incremental capacity, Rock
Ohio Caesars will also have the ability to issue
an additional $300 million in loans, coined the
“Project Tranche,” which will allow for up to 50
percent of the issue amount to be pari passu
with the fi rst-lien term loan.
Price talk has yet to be determined. However,
the loan will be non-callable for two years, then
callable at 102, 101 in subsequent years.
Proceeds from the new credit facility will back
the development and operation of two casinos
in Ohio. – S.M.
SNL Financial launches $215M loan
Credit Suisse launched Wednesday a $215
million loan backing SNL Financial’s buyout by
New Mountain Capital, sources said. The deal
includes a $30 million revolver and a $175 million
covenant-lite term loan.
New Mountain Capital is acquiring a majority
stake in SNL.
SNL Financial is a provider of fi nancial informa-
tion on more than 4,000 public companies and
50,000 private companies. – S.M.
Bojangles sets price talk on
$215M LBO facility
Bojangles Restaurants set price talk Tuesday
on its $215 million credit facility backing its
buyout by Advent International, according to
sources familiar with the deal.
The $190 million, six-year term loan was guided
at LIB+625 with a 1.25 percent Libor fl oor and
a 99 OID.
Alongside the TL is a $25 million, fi ve-year
revolving credit facility.
Sole lead, Jefferies, is asking commitments
by August 8.
Advent is said to have committed a 45 percent
equity check for the transaction which would
value the deal at roughly $390 million.
Bojangles is a franchised chain of fried chicken
restaurants throughout the United States. – C.T.
Ally Commercial hires middle market
veteran Acosta
Ally Commercial Finance LLC announced
that Luis Acosta has joined the middle market
lender as senior managing director. Acosta will
report to George Triebenbacher, president of
Structured Finance.
Acosta has more than 25 years of debt invest-
ing experience, principally engaged in middle
market sponsor fi nance. He has held various
business development, transaction execution
and leadership roles, working extensively with
private equity fi rms and intermediaries.
Previously, Acosta was head of Business
Development for the Capital Solutions Group
at PineBridge Investments. He has also served
as co-head of Sponsor Finance at Silver Point
Capital. In addition, Acosta spent 14 years at GE
Capital (including Heller Financial) in various
capacities, including transaction execution, port-
folio management and business development.
Ally Commercial Finance provides fi nancing,
including asset-based loans and enterprise value
to meet the needs of equity sponsors and middle
market companies. Ally CF lends to manufactur-
ers, distributors, retailers, and service companies
in a broad spectrum of industries including
specialty areas such as healthcare, retail and
automotive.
Products include asset-based loans and
enterprise value-based cash fl ow loans to sup-
port refi nancing, growth, acquisition and/or
recapitalization. – L.P.
Bridge loan pipeline signals M&A optimism despite debt ceiling concerns
As the August 2 deadline for raising the U.S.
debt ceiling looms, market participants wonder
what the ultimate impact of a downgrade could
have in the investment grade market. But a
growing pipeline for bridge loans that keeps
building despite concerns of a potential U.S.
default signals optimism among U.S. corporates
regarding a favorable resolution, bankers said.
“The pipeline for bridge transactions keeps
building,” said a senior banker. “This is a good
indication that despite concerns regarding the
U.S. debt ceiling, corporates and CEOs continue
to make decisions to meet their strategic goals.”
“So far, nothing has stopped those that wanted
to go out with M&A transactions,” a second
banker said.
The growing pipeline of bridge loans suggests
that corporates are shrugging off looming jitters
of a U.S. default and the consequent ratings
downgrade.
Bridge loans are short-term and temporary
loans that corporates use to back takeovers.
Corporates put them in place to have funds avail-
able while the acquisition transaction closes and
they are able to obtain permanent fi nancing in
the loan and bond markets. Bridge loans include
incentives to encourage earlier repayments.
In recent weeks, knowledge of at least four
potential bridge loans backing the acquisitions
of Medco Health Solutions, Nalco, Temple-Inland
and Southern Union have been announced in the
U.S. investment grade loan market. And more
are expected to follow, according to bankers.
Express Scripts is currently in the market with
a $14 billion bridge loan via Credit Suisse and
Citigroup. Joining the bridge is a $5.5 billion pro
rata tranche that is expected to subsequently
become its permanent fi nancing to back its
merger with Medco Health.
Bankers are also waiting for International Pa-
per (IP)’s $1 billion 364-day bridge. UBS is lead-
ing the loan that backs IP’s hostile takeover bid
for Temple-Inland. Also backing the transaction
is a $1.2 billion fi ve-year term loan. The facility
comprises a $1 billion 364-day bridge loan and
a $1.2 billion fi ve-year term loan.
An outcome is also anticipated in the bidding
war for Southern Union. Williams Co and Energy
Transfer Equity are understood to have lined up
bridge facilities backing their bids.
Lastly, bankers are tied to their seats trying to
fi gure out whether the proposed acquisition of
Nalco Holding by Ecolab will bring more bridge
loan paper to the market. Early last week, Ecolab
announced its plans to buy Nalco without com-
mitted fi nancing. The company is understood
to still be evaluating the optimal way to fi nance
its planned acquisition and has not tapped a
lead arranger.
The delay has left senior bankers wondering if
the company will indeed look for a bridge loan
and pay underwriting fees, use cash or a funded
term loan, or a combination of the two.
If nothing else, the fact that Ecolab did not
announce the deal with an underwritten fi nanc-
ing in place is further testament of confi dence
regarding the company’s ability to come up with
the necessary funds to back its acquisition even
in uncertain times.
– by Michelle Sierra
GOLD SHEETS –August 1, 2011 20
The pressing cost of funds issue continues
to haunt the syndicated loan market this year.
Already, Chinese, Hong Kong and Taiwanese
banks are all experiencing increasing costs and
implementing different strategies to counteract
the shortage of US$ funds.
And as the Italy debt crisis unfolded recently,
European banks’ costs of funds scaled higher.
The Europeans, similar to Asian banks, are also
fi nding ways to tide through this crisis.
An Asia-based Spanish banker said European
banks’ costs had been in the 100s this year but
have recently surged to around 200bp.
“Our cost of funds was about 140-150bp
a couple of weeks ago,” he said. “Once Italy
became front-page news, our cost jumped to
about 180-190bp.”
An Asia-based Italian banker said their costs
were even higher at over 200bp. A US-based
Italian banker affi rmed that their cost is now at
about 200bp.
It seems the French banks are not hurting as
much as other European banks. French banks’
costs may not have reduced like they wanted, but
their costs have stabilised since the beginning
of the year, an Asia-based French banker said.
All pointed out that the major issue was with
US$ funding which many need for overseas and
domestic businesses. “Euro funding is about
40bp cheaper than US$ funds,” a source said.
Not As Bad as Lehman Times
A few bankers who spoke to basis point are
positive that costs will go down.
One said, “Our cost now is not as high as during
Lehman days when it took about three to four
months after for costs to go down.”
Another added, “Nobody was doing anything
after Lehman. At least we are still seeing Euro-
peans in deals now.”
In fact, another Asia-based French banker said
they are now operating at a steady pace. “We
are not expanding or aggressively bidding for
mandates, but we are maintaining our presence.”
However, “we do notice lesser activity from
Europeans compared to a couple of years ago”,
the same source said.
A US-based European banker noted, “The
French banks are still strong, the Spanish banks
are still bidding for mandates, and the Germans
are weathering the storm.”
But one source said the European crisis has
been too prolonged.
Another believes it could probably be a year
before recovery starts. “Until the individual
countries’ risks become less of an issue -- then
we might see light.”
… but still a potential time bomb
One European banker cautioned that loss of
confi dence from investors may trigger a run on
deposits.
“We may have passed the stress test but that is
not enough to assure investors,” the banker said.
Another banker said the stress test was too
easy, so it did nothing to increase investor
confi dence.
As some markets, such as the US investment
grade market, continue to offer wafer-thin
margins or single-digit commitment fees, some
players fear their banks will lose competitiveness.
“A 364-day facility can offer 2bp undrawn fee,
and we now need at least 15bp for that kind of
structure. We are becoming too expensive and
may soon be pushed out of the market,” a US-
based European banker said.
Also, a few have begun implementing Basel III
rules, which add to the liquidity burden as banks
are required to increase their capital reserves.
According to a US-based Italian banker, it feels
like they are the only ones in the US exercising
Basel III requirements.
Meanwhile, in Asia, a Spanish banker said
they are already preparing for Basel III. And a
French bank confi rmed that they are aligning
themselves with the new rules.
Another source said that Singaporean banks
are already complying with Basel III.
Taking Steps to Avoid Loss
In a survey by LPC in March, many bankers
agreed they would rather go for unfunded revolv-
ers, even if there was not much yield, because
“at least I know my cost of funds”.
If a revolver is drawn and the borrower paid a
Libor-based pricing that is lower than a bank’s
cost of funds, the bank will suffer a loss.
Or as one put it, “That would be a nightmare
scenario.”
Some believed that a few banks may already
be incurring losses on recent low-priced deals.
Several said they would be looking not just at
non-funded credits, but bilateral loans or project
fi nancing as well. Project fi nancing deals tend
to offer higher yields but are longer tenored.
One source mentioned going down the rating
spectrum to look for yields. “Otherwise there is
nothing to look at,” the source said.
“Or we will provide guarantees or take un-
funded risks of credits and fi nd other banks to
help fund the deals. The Chinese (banks) are
already doing it anyway,” he continued.
When asked about relationship clients, a
Spanish banker replied, “That’s a very tough
question. We may have to suck it up, but for
which clients?”
ASIA
Jacqueline PohCost of funds issue heightened as Europe crisis prolongs
Amex locks up A$4.5B loan
Credit card company American Express Credit
Corp is wrapping up a A$4.5 billion loan which
has been signifi cantly oversubscribed by exist-
ing lenders, according to banking sources. The
deal underscores bank appetite for fi nancial
institution paper despite a spiralling debt crisis
in Europe and the US.
The loan pays a margin of 135bp over BBSY
and 170bp over BBSY, said the sources familiar
with the transaction. The deal -- arranged by
Citigroup, Commonwealth Bank of Australia,
National Australia Bank and Westpac Banking
Corp -- is to refi nance an existing A$4.25bn loan
maturing later this year.
The loan book was oversubscribed by around
20 percent, one of the sources said, underscoring
investor appetite. The four leads alone commit-
ted A$500 million each.
Existing lenders are among the largest global
banks, including Barclays Capital, Royal Bank
of Scotland, ING Bank, Mizuho Corporate Bank,
Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui
Banking Corp and Standard Chartered.
American Express is rated BBB+ by Standard
& Poor’s.
The success of the deal bodes well for Macqua-
rie Group which is in discussions with lenders to
refi nance A$3 billion of existing loans.
Macquarie Group, rated A-, higher than Amex,
is seeking tenors of 3.5 years and 5.5 years and is
asking for 160bp over BBSY for the longer tenor.
The bank is speaking to a lead group of banks
to commit large holds at a top level. There are
plans to tap a second tier of lenders in a later
phase. Macquarie has over 40 lenders in the
current loan.
The bank is also open to taking oversubscrip-
tions, which would increase the overall amount
of debt raised.
Macquarie’s earnings have come under pres-
sure due to weak market conditions that have
hurt its investment banking and trading divi-
sions. – S.K.
GOLD SHEETS – AUGUST 1, 2011 21
EUROPE
Wolfskin loans launch after fl ex and
second-lien added
The loan backing Blackstone’s 700 million euro
buyout of German outdoor brand Jack Wolfskin
has launched to wider syndication, banking
sources said Wednesday.
Following completion of an early bird phase
and investor feedback, the deal was restructured
by adding a 70 million euro second-lien tranche
and reducing the amount of senior debt. In ad-
dition, pricing on the senior debt was increased
by 50bp.
Private equity fi rm Blackstone mandated Bank
of America Merrill Lynch, Morgan Stanley, IKB
and UBS to arrange the debt.
The new structure on the loan is now as follows:
•• 80 million euro, revolving credit facility, pay-
ing EUR+450
•• 350 million euro seven-year term loan B,
paying EUR+500
•• 70 million euro seven and a half year second
lien, paying EUR+950
The debt-to-EBITDA ratio is around 4.4 times
total and 3.6 time through the senior debt.
A bank meeting was be held in London July 29.
An original issue discount on the loan will be
revealed at the bank meeting. Banks will be
offered tickets of 15 million euros on the RCF
and the term loan B, with a 200bp fee on offer.
Blackstone concluded negotiations to buy Jack
Wolfskin from Quadriga Capital and Barclays
Private Equity July 21. The brand’s rivals, in the
fast-growing market for outdoor clothing and
equipment, include VF Corp-owned The North
Face. – C.R./I.W.
TNK-BP approaches banks for
$1.5B loan
Ten relationship banks have been approached
to participate in a $1.5 billion, four-year club loan
for Russia’s TNK-BP, in which oil major BP has
a 50 percent stake, bankers said on Tuesday.
Bank of America and Bank of Tokyo-Mitsubishi
UFJ are the coordinators and bookrunners, with
Bank of America acting as documentation agent
and BTMU as facility agent. BayernLB, Citigroup,
Credit Agricole, HSBC, Mizuho, Nordea, SMBC and
WestLB have been approached to join the deal.
All 10 banks will come in at the same level,
committing $150 million each, one of the bank-
ers said.
Lenders’ credit approvals are expected by
August 5, another banker said.
TNK-BP’s chief fi nancial offi cer Jonathan Muir
said on Tuesday that the company is looking to
raise a $1.5 billion loan for “operational needs”.
The loan is priced at LIB+130.
“TNK-BP’s pricing is more aggressive than
deals for other comparable companies,” one
banker said, adding that it has deterred some
banks from participating.
TNK-BP last tapped the market in October 2010
when it signed an unsecured $2 billion, three-
year club loan that paid a margin of LIB+175.
The lending banks on that deal included
Banca Intesa, Bank of America, Bank of Tokyo-
Mitsubishi-UFJ, BayernLB, BNP Paribas, Citi,
Credit Agricole, Deutsche Bank, HSBC, ING,
Mizuho, Nordea, RBS, Societe Generale, SMBC
and WestLB.
TNK-BP International is rated BBB- by Fitch
and Standard and Poor’s and Baa2 by Moody’s.
– M.M.
Numericable pushes out commitment
deadline on amend and extend
French cable operator Numericable has ex-
tended the commitment deadline to an amend
and extend on its 3 billion euros of debt as the
company continues to negotiate with a number
of investors, sources close to the deal said.
The deadline has been extended by a week to
August 2 after gaining little investor support by
the original deadline of July 26, the sources said.
The company said it postponed the deadline to
fi nalize some documentation, one investor said
Investors expressed dissatisfaction at the fees
on offer for agreeing to extend maturities on all
of Numericable’s 3 billion euro debt facilities by
for two years and for consenting to the company
raising 500 million euro of senior secured or
subordinated bonds to repay existing debt.
Currently the blended cash interest margin
on the company’s term loan B/ C tranche is
EUR+250 plus an additional PIK of EUR+125.
If a majority of lenders agree to extend the
facilities they will see the 125bp PIK converted
into cash.
Those consenting to the bond could see a
margin increase on the TLB/C loans, but the
uplift depends on the overall leverage multiple.
Lenders will receive an additional 50bp if over-
all leverage is above 5 times; 25bp if leverage
is above 4.25 times; and no additional margin
interest if leverage is below 4.25 times.
Leverage could remain over 5 times if a senior
secured bond is issued while an unsecured
bond is likely to push overall leverage below
4.25 times.
“The company is already close to being 5 times
leveraged which means realistically at best we
are looking at 25bp increase or nothing for
agreeing to these changes. It doesn’t look that
compelling at the moment,” an investor said.
In addition, if leverage falls below 4.25 times,
the PIK will fall from 125bp to 75bp due to a
margin ratchet put in place in the original deal.
Consent fees are 12.5bp with an additional
37.5bp when a lender rolls into the new facility.
If the company gets enough support, it will
have until February to raise the bond.
BNP Paribas is running the process and wants
50 percent support from TLA and capital ex-
penditure facility lenders and 67 percent from
the TLB/C lenders.
Numericable had around 3.2 billion of loans
which backed its leveraged buyout by private
equity fi rms Cinven, Carlyle Group and Altice
in 2006.. – C.R.
Lactalis signs 7.5B euro acquisition
loan
French dairy group Lactalis has closed 7.5 bil-
lion euros of loan facilities backing its acquisition
of a majority stake Italy’s Parmalat, the lead
banks said in a statement on Thursday.
The loan, a rare new money fi nancing in a
market dominated by refi nancing, was fully
underwritten by bookrunners and mandated
lead arrangers Credit Agricole CIB, HSBC France,
Natixis and Societe Generale.
Syndication was launched to a limited group
of banks on May 23 with lenders offered tickets
of 300 million euro and 600 million euro. The
fi nancing closed oversubscribed and lenders
were scaled back signifi cantly, signing into the
deal on July 8.
The fi nancing, which also refi nances several
of Lactalis’s existing credit facilities, comprises
the following facilities:
•• Facility A: 1.65 billion euro, one-year term
loan, initial margin EUR+125
•• Facility B: 1 billion euro, two-year revolving
credit facility, initial margin EUR+125
•• Facility C: 750 million euro, three-year term
loan, initial margin EUR+225
•• Facility D: 3 billion euro, fi ve-year amortiz-
ing term loan and a 1.1 billion euro, fi ve-year
multicurrency revolving credit facility
As previously reported, facility A has a six-
month term-out extension option, while facility
C is has two one-year extension options at the
lenders’ discretion.
Pricing on facility A rises to 150bp after six-
months, rising to 200bp after 12 months. Pricing
on facility B rises to 150bp after six months, rising
to 200bp after 12 months and 250bp after 18
months. Pricing on facility B ratchets between
110bp and 275bp depending on a leverage ratio,
or 100bp to 250bp when facility A is fully repaid.
After the acquisition, the new Lactalis Group
will have annual turnover of around 15 billion
euros and more than 52,000 employees. – A.R.
GOLD SHEETS –August 1, 2011 22
THE WEEK IN NEWS — cont’d from p. 19
Steak ‘N Shake launches $160M refi
Steak ‘N Shake launched Thursday a $160
million credit facility via Jefferies, sources said.
The new facility is fi lled out with a $20 million
three-year revolver and a $140 million four-year
term loan. Pro forma leverage is being marketed
at 3.2 times.
Proceeds from the new facility will refi nance
existing debt and fund the return of capital to
its parent Biglari Holdings.
Steak ‘N Shake is a franchised restaurant chain
throughout the United States serving signature
hamburgers and milkshakes. – C.T.
General Cable nets $400M ABL
General Cable Corp announced last Monday
its successful refi nancing of its $400 million
asset-based revolving credit facility, according
to a company press release.
The new fi ve-year ABL also contains an ac-
cordion feature which allows General Cable to
increase the facility by up to $100 million.
Backed by assets of its U.S. and Canadian
subsidiaries, the JP Morgan-led ABL will have
fi rst priority security interest in both tangible
and intangible assets.
Pricing on the ABL is set at LIB+150-200 with
a commitment fee ranging from 37.5bp to 50bp.
The facility also has two springing maturities.
One to August 16, 2013 if General Cable does
not refi nance $355 million of the 0.875 percent
convertible notes due 2013. The other springs
to December 31, 2014, should General Cable
not refi nance $125 million of its Senior Floating
Notes due 2015. – C.T.
Ipreo shifts funds into mezz
Ipreo Holdings shifted $35 million of funds
into its mezzanine tranche from its term loan B,
sources said. The covenant-lite TLB now stands
at $115 million.
As a result, senior secured leverage is now
3.1 times.
Pricing on the TLB is unchanged at LIB+650
with a 1.5 percent Libor fl oor and a 98 OID. The
loan also has 101 soft call protection.
As reported earlier, the deal, which is led by
RBC, also includes a $20 million revolver.
Moody’s has assigned a B2 corporate family
rating and a B1 facility rating.
KKR is buying the company from Veronis
Suhler Stevenson. Terms of the buyout were
not disclosed.
Ipreo is a provider of data, market intelligence,
and productivity solutions to investment banking
and corporate clients. – S.M.
Monroe Capital adds four to
origination team
Monroe Capital LLC announced it has ex-
panded its origination team with the addition
of four new hires. Thomas Karle, Laura Kraus,
Cameron Fleming, and Lori Potter have joined
the private investment fi rm, which targets in-
vestments in middle-market and lower-middle
market companies.
“We are very excited and fortunate to expand
our origination team with the addition of four ex-
perienced professionals to better serve middle-
market businesses nationwide,” said Theodore
Koenig, president and chief executive offi cer of
Monroe Capital, in a statement.
Karle joins as managing director and will be
responsible for origination in the Eastern region.
Prior to joining Monroe, Karle was managing
director at MFC Capital Funding where he was
responsible for new business origination.
Kraus joins as managing director. She will be
responsible for origination in the Midwest region.
Kraus also joins Monroe from MFC Capital Fund-
ing where she was a director, with responsibility
for new business origination.
Potter will be responsible for origination in
the Southeast region. Potter brings more than
25 years experience in both asset-based and
cash-fl ow lending with GE Capital and GMAC
Structured Finance. Most recently, she has been
providing fi nancial consulting, capital raise
advice and fractional CFO services to middle-
market clients.
Cameron Fleming will be responsible for
origination in New York City and the surrounding
metropolitan area. Fleming brings 22 years of
experience in leveraged and structured fi nance.
Most recently, Mr. Fleming was Director of Sourc-
ing for Golden Tree Asset Management.
Monroe Capital is a private investment fi rm
providing senior and junior debt and equity co-
investments to middle-market companies in the
U.S. and Canada, including one-stop fi nancings,
bridge loans, acquisition facilities, mezzanine
debt, second lien or last-out loans, equity co-
investments and acquisitions of distressed debt.
In March, Monroe Capital registered to launch
a business development company (BDC) under
the name Monroe Capital Corp, according to a
regulatory fi ling. – L.P.
LBC Credit delivers one-stop facility
to Wenner Bread
LBC Credit Partners announced Wednesday
it served as the sole lender and administra-
tive agent for a $36.5 million one-stop senior
credit facility to support Frontenac Company’s
recapitalization of Wenner Bread Products Inc.
Proceeds from the credit facility supported
Frontenac’s purchase of Wenner, a family-owned
wholesale bakery founded in 1956. Wenner
manufactures high-quality frozen, par-baked,
and fully-baked dough, breads and rolls.
LBC also made an equity co-investment in
Wenner.
“LBC was instrumental in helping us complete
this investment and in navigating the challenges
associated with investing in a family owned busi-
ness. Their structuring experience, fl exibility and
commitment to a successful close are what made
them a truly valuable partner. We look forward
to working with them as our fi nancial partner,”
said Ron Kuehl, Principal, Frontenac Company.
LBC Credit Partners is a provider of middle
market fi nancing solutions including senior
term, unitranche, second lien, junior secured, and
mezzanine debt; and equity co-investments. LBC
follows a “lend and hold” strategy, and typically
invests $10 million to $50 million per transaction
in support of acquisitions, growth strategies, re-
fi nancings, recapitalizations, and restructurings
in a wide range of industries located throughout
North America. LBC has offi ces in Philadelphia,
Chicago and New York. – L.P.
NewStar hires Williams to spearhead
Midwest ABL opportunities
NewStar Business Credit, a division of NewStar
Financial Inc, announced it has hired Mike Wil-
liams to lead asset-based fi nancing opportuni-
ties in the Midwest, according to a statement.
Williams, joining as senior vice president, will
head the division’s regional marketing and origi-
nation efforts, with responsibility for generating
new asset-based fi nancing opportunities with
middle market companies out of NewStar’s
Chicago offi ce.
“Mike is well known throughout the market-
place and will be a great addition to our origina-
tion efforts in the Midwest region,” said Milton
Iskra, executive vice president and national mar-
keting manager for NewStar. “He adds strong
marketing and credit skills as well as valuable
execution experience to the NewStar team.”
Prior to joining NewStar, he was a director with
Gordon Brothers Group in Chicago. Previously, he
worked for UPS Capital and PNC Business Credit.
NewStar Business Credit provides asset-based
loans to mid-sized companies operating across
a variety of industries nationwide. Deals typically
range in size from $5 million to $25 million and
are structured to meet the unique needs of each
client through a combination of revolving lines
of credit and term loans.
GOLD SHEETS – AUGUST 1, 2011 23
THE WEEK IN NEWS
NewStar Financial is a specialized commercial
fi nance company focused on companies and
private investors in the middle markets. It spe-
cializes in providing a range of senior secured
debt fi nancing options to mid-sized companies
to fund working capital, growth strategies,
acquisitions and recapitalizations, as well as,
equipment purchases. – L.P.
FirstMerit adds loan syndications
manager
FirstMerit Bank has appointed Ron Majka
senior vice president and manager of loan syndi-
cations, according to a statement from the bank.
Majka will be responsible for the development
and management of FirstMerit’s Loan Syndica-
tions Group.
FirstMerit Loan Syndications will support
multi-bank relationships in the bank’s middle
market, and specialized lending groups, includ-
ing FirstMerit Bank Business Credit, Healthcare
Real Estate, Equipment Finance, and Insurance
Premium Finance.
Majka reports to Brian Karrip, executive vice
president Specialized Lending. Karrip joined
FristMerit from KeyBank last September to lead
the expansion of FirstMerit’s buyside platform,
with an eye on establishing a syndicated loan
business in the long term, Karrip said upon
joining the bank.
Prior to joining FirstMerit, Majka spent 12 years
with National City Bank, where he served as a
director in the Loan Syndications Group. During
his tenure at National City, Majka also served
as a senior vice president in the bank’s Upper
Middle Market Group where he was responsible
for a $500 million loan portfolio comprised of
public and private Northeast Ohio companies.
FirstMerit Corp is a diversifi ed fi nancial services
company headquartered in Akron, Ohio. – L.P.
Judge rejects Dodgers’ $150M
bankruptcy loan
The Los Angeles Dodgers were directed to
negotiate a $150 million loan from Major League
Baseball on July 22 to fi nance their bankruptcy
after a judge rejected the team’s preferred loan.
In rejecting the proposed loan from Highbridge
Capital, a hedge fund unit of JPMorgan Chase
& Co, Delaware Bankruptcy Judge Kevin Gross
said baseball’s proposed alternate fi nancing had
“substantial economic superiority.”
He also wrote that baseball’s loan must “be
independent and uncoupled” from the league’s
oversight and governance of the Dodgers under
the league’s constitution.
The money will keep the team operating and
give team owner Frank McCourt time to try to
sell cable TV rights to broadcast the team’s
games, which should put the Dodgers on sound
fi nancial footing.
Commissioner Bud Selig rejected the team’s
proposed $3 billion deal for those rights last
month, and days later the Dodgers fi led for
bankruptcy in a bid to prevent the league from
seizing the team. – Reuters
Allocations out on Praxair’s
$1.75B revolver
Allocations are out for Praxair Inc’s $1.75 billion
fi ve-year revolver, sources said.
Bank of America Merrill Lynch, Citigroup and
HSBC Securities are lead arrangers.
BofA Merrill, Citigroup and HSBC came in with
$160 million each. Bank of Tokyo-Mitsubishi,
Deutsche Bank, Royal Bank of Scotland and
Wells Fargo came in with $130 million each.
JP Morgan, Sovereign Bank and Credit Suisse
came in with $100 million each.
Banco Bilbao Vizcaya Argentaria, Sumitomo
Mitsui Banking Corp and Société Générale came
in with $75 million each.
Bank of New York Mellon, Bank of Nova Scotia,
U.S. Bank came in with $50 million each.
Intesa Sanpaolo, Northern Trust and China
Merchants Bank came in with $25 million each.
The facility will refi nance existing debt.
Pricing is on a grid based on the company’s
CDS with a fl oor of 25bp and a cap of 125bp at
current ratings. The commitment fee is 8bp.
The grid is as follows:
Rating Floor Cap Commit. fee
(=)AA-/Aa3 20 100 5
A+/A1 22.5 112.5 6
A/A2 25 125 8
A-/A3 50 137.5 10
BBB+/Baa2 75 162.5 15
(=)BBB/Baa2 100 187.5 17.5
Praxair is an industrial gas provider. – M.S.
CS upsizes bridge commitment to
$3.7B
Credit Suisse, which agreed to back Energy
Transfer Equity LP’s acquisition of Southern
Union with a $3.3 billion bridge loan, upsized its
commitment to $3.7 billion, documents show.
The 364-day bridge was upsized due to a
bidding war that ensued between Williams
Companies and ETE for control of Southern
Union. In the end, Southern Union chose ETE’s
$9.4 billion offer.
The deal is fi lled out with $5.7 billion in cash
and ETE stock.
Southern Union and Energy Transfer Equity
are both engaged in the transport and storage
of natural gas in the U.S. – C.T.
Danaher closes $2.5B revolver
Danaher Corp’s $2.5 billion fi ve-year revolver
has closed and allocated, according to an SEC
fi ling.
Lead arranger Bank of America Merrill Lynch,
together with Bank of Tokyo-Mitsubishi UFJ,
Citibank, JP Morgan and Wells Fargo Bank came
in with $150 million each.
Barclays Bank, BNP Paribas Bank, Deutsche
Bank, Goldman Sachs, HSBC, Mizuho, Morgan
Stanley Senior Funding, Northern Trust, Sumi-
tomo Mitsui Banking Corp, UBS Loan Finance
and US Bank participated with $100 million each.
Intesa Sanpaolo and Bank of Nova Scotia put
in $75 million each.
PNC Bank, Bank of New York Mellon, BBVA,
Credit Suisse, Danske Bank, DnB NOR Bank,
Nordea Bank, Standard Charter Bank, Westpac
Banking Corp and Australia & New Zealand
Banking Group Limited lent $50 million each.
As previously reported, the loan will refi nance
Danaher’s $1.45 billion multi-year revolver due
April 25, 2012.
At current ratings of A+/A1, pricing on the $2.5
billion refi nancing loan is 75 basis points over
Libor with a 7.5bp facility fee.
The pricing grid is as follows:
Debt Rating Facility Fee Margin
AA- / Aa3 0.060% 0.750%
A+ / A1 0.075% 0.750%
A / A2 0.100% 0.875%
A- / A3 0.125% 1.000%
< BBB+/Baa1 0.175% 1.250%
The deal launched on Friday June 17 the same
day the company closed a $3 billion, 364-day
unsecured bridge loan that backed the purchase
of medical test-maker Beckman Coulter. Ten
days later, the company reduced the $3 billion
loan to $2.2 billion with proceeds from an over-
subscribed $1.8 billion bond offering, according
to SEC fi lings.
At closing on July 15 the 364-day facility had
been further reduced to $1.5 billion.
Danaher is a manufacturer of technology for
the medical industry. – M.S.
(NEWS cont’d on page 24)
GOLD SHEETS –August 1, 2011 24
THE WEEK IN NEWS — cont’d from p. 23
Insight Global sets talk on $157M
refi TLB
Insight Global Inc is guiding its $157 million
term loan at LIB+500 with a 1.5 percent Libor
fl oor, sources said. An OID is to be determined.
As reported earlier, BNP Paribas launched the
deal last Monday. The loan will take out the
company’s existing mezzanine debt.
The refi nancing would make the deal an all-
senior one with leverage of less than three times.
Last July, the company raised a $121 million TLB
at LIB+700 with a 2 percent Libor fl oor, along
with 101 soft call protection. The loan was sold
at 97 cents on the dollar.
Sources said the company has performed
well since the July 2010 deal. S&P upgraded
the company from B to B+, while an upgrade
to the current B2 Moody’s rating is also likely.
Insight Global had LTM Ebitda as of June 30
of around $54 million.
Proceeds from the 2010 deal, with leverage
of 3.3 times senior and 4.3 times total, were
used to fi nance Harvest Partners’ acquisition
of the company.
Insight Global is in the staffi ng services busi-
ness. – S.M.
China Security nets $500M
China Security and Surveillance has netted a
$500 million debt commitment letter from the
China Development Bank to back the company
going private, according to regulatory fi lings.
As part of the transaction, Guoshen Tu, chair-
man and CEO of China Security and Surveillance,
will purchase all the outstanding common stock
for the company that he does not already own
for $6.50 per share. The transaction is valued
at $442 million.
The eight-year term loan will bear an interest
at LIB+350 during the fi rst fi ve years and then
will step up to LIB+450 thereafter.
Tu and his wife are personally guaranteeing the
loan with their equity interests in the company.
China Security and Surveillance engages in
the manufacturing, retailing and servicing of
surveillance equipment to various branches of
government and private industry. – C.T.
Ardent Health sets talk on
$200M add-on TL
Ardent Health Services set price talk on its
$200 million add-on term loan, sources said.
The new facility is offered at LIB+500 with a 1.5
percent Libor fl oor and a 98.5 OID, sources said.
The add-on will be made to a $325 million,
5.5-year term loan syndicated in March 2010,
sources said. Pricing on the new tranche is in
line with pricing on the 2010 deal.
Commitments are due July 26th.
Ardent also has a $75 million revolving credit
facility which pays LIB+475.
Bank of America Merrill Lynch is leading the
add-on with incumbent Barclays and GE Capital
on the right.
Proceeds from the add-on will be used to
fi nance the acquisition of two hospitals from
Community Health Systems.
Based in Nashville, Tenn., Ardent own and
operate acute care health systems. The company
was acquired by Welsh, Carson, Anderson &
Stowe in 2001. – C.T.
Joy Global nets $1.5B bridge for 41%
stake in mining co.
Joy Global Inc netted a debt commitment letter
for a $1.5 billion bridge loan from JP Morgan,
Goldman Sachs, and Bank of America Merrill
Lynch to back its acquisition of a 41 percent
stake in International Mining and Machinery,
according to SEC documents. – C.T.
17TH ANNUAL THOMSON REUTERS LPC LOAN CONFERENCE
Don’t miss the loan market event of the year!
Boom to Bust and Back:The Global Loan Market Moves Forward
Thursday September 22, 2011 Marriott Marquis, New York City
Join hundreds of corporate treasurers, CFOs, institutional investors, senior bankers, rating agency
representatives and other market participants for a day of insight and networking as they meet to
discuss the current and future state of the global syndicated loan market.
www.loanpricing.com/conference.html
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