Bank Loan Report articles from February 2006

Bank Loan Report archives from February 2006

Suppliers Face Tall Order In 2006, But Some Progress Is Expected.
February 6, 2006... Coming off of a year marked by four bankruptcies, numerous downgrades and a flurry of requests for covenant relief, the turn of the calendar to 2006 hasn't brought with it much help to the automotive supplier sector, at least not yet. ...

Distressed: No Major Action Until 2007?
February 6, 2006... The vultures were patient in 2005, as each one waited to stake its claim in the next golden opportunity to hit the distressed debt universe. But such opportunities did not come as often as distressed players would have liked. Indeed, with the...

BofA Waives Fees In Support Of Liquidity.(BankAmerica Corp.)
February 6, 2006... In announcing a shift in its policy on assignment fees last week, Bank of America joined the long list of major banks in the syndicated loan market that no longer impose such fees. Under BofA's new policy, which was announced last week and...

More Creditors Ask Supreme Court To Review OC Ruling.(Owens Corning )(Brief Article)
February 6, 2006... A second party involved in the Owens Corning (OC) bankruptcy reorganization has asked the US Supreme Court to review a 2005 ruling by the US Third Circuit Court of Appeals that legal experts say sets a high bar for the application of...

CitigroupTo Lead ACS Mega Deal.(Affiliated Computer Services Inc)
February 6, 2006... Citigroup has snagged the lead arranger role for Affiliated Computer Services' (ACS) multi-billion loan deal, which will finance its recently announced $3.5 billion Dutch tender offer. The senior secured facility for ACS, which is for at...

Nortel Nets Commitments For $1.3B Refinancing.(Nortel Networks Corp.)(Brief Article)
February 6, 2006... Nortel Networks has received a commitment from JPMorgan, Citigroup, Royal Bank of Canada and Export Development Canada for a $1.3 billion loan package, the company said in a statement last week. The one-year deal is to consist of two one-year...

Cablevision Reconsiders Special Dividend.
February 6, 2006... Cablevision Systems Corp. announced last week that it would reconsider paying a special dividend to shareholders after its last attempt to do so was halted due to debt covenant compliance issues. According to a January 31 filing with the...

Upgrades Outpace Downgrades For 2005 CLOs.
February 6, 2006... Thanks in part to a low default rate, 2005 was a strong year ratings-wise for collateralized loan obligations (CLOs), according to a recent report by Standard & Poor's. Only two CLO tranches were downgraded and 22 were upgraded. The mild credit...

Second Lien Trading Has Evolved, But Threat Of Volatility Looms.
February 6, 2006... As the primary market for second lien loans has taken off in the past few years, second lien trading liquidity hasn't been far behind. And while data from Markit Loans show that second lien loans have been bid at slightly higher levels than...

Euro Market: Slowly Cozying Up To 2nd Liens.
February 6, 2006... The popularity of second lien loans in Europe increased significantly in 2005, buoyed by a vibrant leveraged finance market comprising strong demand from a range of investors, particularly US-based players, looking for yield. Indeed,...

More Lender Agreements Favor 2nd Liens.
February 6, 2006... In the relatively short amount of time since syndicated second lien loans started to become a popular form of debt financing, investors in this still-nascent loan product have made headway in negotiating more favorable terms within...

In Their Own Words: Market Players' Thoughts On Second Liens.
February 6, 2006... BLR has spoken to various market constituents about the second lien loan product since its popularity began to grow in the broader leveraged loan market more than two years ago. Here is a collection of viewpoints on second liens voiced over the...

Second Lien Market Set To Retain Torrid Pace In 2006.
February 6, 2006... In 2005, second lien market volume reached $16.3 billion, far surpassing the record of $12 billion set in 2004, according to Standard & Poor's Leveraged Commentary & Data. Driving growth is the widening acceptance of second lien loans by both...

Mezz Sees Upsurge In Issuance Despite Popularity Of 2nd Liens.
February 6, 2006... The advent of the second lien loan product, which has become increasingly popular among issuers and yield-hungry investors, has not been kind to the US mezzanine market in recent years. However, recently, there has been a notable uptick in...

Issuance Flourishes In 2005.
February 6, 2006... Second lien loan volume totaled approximately $16.3 billion in 2005, according to Standard & Poor's Leveraged Commentary & Data. This is a significant increase from the $12 billion in second lien volume seen in 2004. (c) 2006 Bank Loan...

ABL MM Lenders Look To IP Collateral For Second Lien Loans.
February 6, 2006... Issuers and investors have flocked to the second lien loan market over recent years. Indeed, this heightened popularity of the often highly priced loan product has caused competing arrangers - especially those in the asset-based middle market...

An Attractive Distressed Investment.(Bingham McCutchen and Chanin Capital Partners's loans)(Brief Article)
February 6, 2006... About 40% of the 124 respondents to the 2006 North American distressed debt market outlook survey, presented by Debtwire in conjunction with Bingham McCutchen and Chanin Capital Partners, said they believe second lien loans will be one of the...

Ratings Movers: Directed Electronics Up/Matria 2nd Lien Slips.
February 6, 2006... Among the bout of issuers experiencing ratings activity last week was Directed Electronics, whose recent initial public offering (IPO) helped steer the company's debt ratings up to B1 from B2. Moody's Investors Service pointed to the...

ABL Market Looks Forward To Racking Up More M&A Deals.(asset-based lending )(mergers and acquisitions)
February 13, 2006... Despite predictions that the next downturn may not arrive until next year, players in the asset-based lending (ABL) market, who usually see more business during the negative part of the credit cycle, are placing bets that their market will see...

Panelists Discuss Evolution Of Second Lien.(Panel Discussion)
February 13, 2006... Just a few short years ago, many lenders considered second lien bank debt to be the wild frontier of the loan market - there was little law and order as to how the deals were structured, and there were many doubts about whether the new loan...

Plenty More Euro LBO Deals Expected.(Leveraged buyouts )
February 13, 2006... Leveraged buyouts (LBOs) were responsible for many of the jumbo financing deals in Europe last year. And analysts again expect LBOs, both large and small, to be a driving force behind issuance in the European market this year. Indeed,...

Bankrupt Calpine Trims Pricing On Second Lien Tranche Of DIP.(Brief Article)
February 13, 2006... Bankrupt power company Calpine Corp. shaved 50 basis points (bps) off of the second lien tranche of its debtor-in-possession (DIP) facility, lowering pricing to Libor plus 400 bps from initial price talk of Libor plus 450 bps, according to a...

Infor Loans On Tap For This Week.(Brief Article)
February 13, 2006... Infor Global Solutions is set to launch syndication of a $970 million credit facility on Wednesday that consists of a $50 million, four-year revolver, a $605 million, five-year term loan B and a $315 million, six-year second lien term loan....

Bank Trio Pitches Ply Gem Loan.
February 13, 2006... Last Thursday, UBS, Deutsche Bank and JPMorgan began selling $121 million in additional term loan debt for Ply Gem Industries to finance its proposed acquisition of AWC Holding Company (Alenco). Initial price talk is set at Libor plus 250 bps....

Babson Closes $1B Middle Market Fund.(Babson Capital Management )(Brief Article)
February 13, 2006... Last week, Babson Capital Management announced it closed a $1 billion mezzanine and private equity fund that will invest in the lower end of the middle market. Investors in the new fund, Tower Square Capital Partners II, include corporate and...

S&P, Moody's Report January Loan Default Rates.(Brief Article)
February 13, 2006... Standard & Poor's reported last week that the leveraged loan default rate through the end of January stood at 1.97%, compared with 1.53% six months earlier. The rise largely has to due with the bankruptcy filing of Calpine Corp. in December,...

LSTA: Washington's Birthday Should Be A Loan Market Holiday.(Loan Syndications and Trading Association)(Brief Article)
February 13, 2006... The Loan Syndications and Trading Association (LSTA) has recommended that February 20, 2006, the (US) Washington's Birthday holiday, should be treated as a loan market holiday for purposes of calculating the start date for delayed compensation...

Imperial Chooses Aronzon To Lead New Restructuring Group.(Paul Aronzon joins Imperial Capital )(Brief Article)
February 13, 2006... Investment banking firm Imperial Capital has hired bankruptcy attorney Paul Aronzon to be executive vice president in charge of the firm's restructuring advisory group. "This new addition is part of Imperial's continued expansion efforts, which...

CapitalSource Brings Niesen On Board.(Andrew Niesen joins CapitalSource Finance )(Brief Article)
February 13, 2006... CapitalSource Finance has hired Andrew Niesen as a business development officer in the firm's structured finance group. In his new role, he will be in charge of originating loan transactions to the resort, mortgage and specialty finance...

Blackstone Hedge Fund Recruits Russick.(Joseph Russick joins The Blackstone Group )(Brief Article)
February 13, 2006... The Blackstone Group has hired Joseph Russick as a principal in the firm's distressed debt hedge fund, which launched in July 2005. Russick previously worked as a vice president at Bennett Restructuring Funds, where he focused on the distressed...

BNP Paribas Hires Pawlowski For Whole Loan Trading.(David Pawlowski )(Brief Article)
February 13, 2006... BNP Paribas has appointed David Pawlowski as a director in the bank's New York whole loan trading group, which is a part of BNP Paribas' fixed income business. Pawlowski, who will report to Gregory Lattanzio, head of whole loan trading, will be...

SG CIB Appoints Tengattini To Milan Group.(Societe Generale Corporate and Investment Banking appoints Sergio Tengattini )(Brief Article)
February 13, 2006... Societe Generale Corporate and Investment Banking has appointed Sergio Tengattini as a director in the bank's newly formed Italian leveraged finance team based in Milan. He will report to Thierry Martet. Tengattini formerly worked at ING...

Consulting Firm Starts HF, Derivatives Practice.(Citisoft)(hedge fund )(Brief Article)
February 13, 2006... Citisoft, the specialist investment management consulting firm, announced it has launched a hedge fund and derivatives business. "Citisoft's new offering will help the buy-side respond to market growth, hedge fund formalization, the increasing...

Calyon Acquires Omicron CDO Biz.(collateralized debt obligation )(Brief Article)
February 13, 2006... Calyon in London announced last week that it has acquired 100% of the share capital of Omicron Invest Management, a fully licensed collateralized debt obligation (CDO) management firm based in Vienna and founded by managing directors Marcus...

Merrill CDO Guru, Ricciardi, Departs Firm.(collateralized debt obligation)(Chris Ricciardi)(Merrill Lynch)(Brief Article)
February 13, 2006... Late last week, rumblings surfaced that Chris Ricciardi, the head of collateralized debt obligation (CDO) origination and structuring at Merrill Lynch, has left the firm. When reached on his mobile phone, Ricciardi declined to comment, as...

Ratings Movers: Lyondell Up/Battery Mart Stress Drops Spectrum.
February 13, 2006... Due in large part to the company's successful reduction of debt, Fitch Ratings has raised the bank loan ratings for Lyondell Chemical Co. and its subsidiary Equistar Chemicals. Lyondell's senior secured credit facility rating was raised to BB+...

More CDO Issuance, Managers And Turnover Expected In 2006.(collateralized debt obligation )
February 13, 2006... More collateralized debt obligation (CDO) volume is expected this year than in 2005, according to attendees at the 2006 American Securitization Forum held in Las Vegas two weeks ago. About $155 billion of CDO issuance came to the market in...

Ad Hoc Group Proposes Standard Documentation For Loan CDS.(credit default swaps)
February 20, 2006... The notion of establishing standard documentation for credit default swaps (CDS) referencing secured loans moved one step closer to materializing last week, as an ad hoc group of market constituents finished its work on a proposal for just...

Look Out For Fast Prepack Bankruptcies.
February 20, 2006... As the bankruptcy process becomes an increasingly expensive option for companies to undergo, due in large part to the amended US Bankruptcy Code that took effect last October, many market players expect to see an increase in speedy prepackaged...

IP ABS Collateral Backs Dunkin' Deal.
February 20, 2006... The planned $1.5 billion asset backed securities (ABS) offering to finance the $2.43 billion purchase of Dunkin' Brands from Pernod Ricard by Bain Capital, The Carlyle Group and Thomas H. Lee Partners indicates the increased role of...

Demand Still High For G-P Second Lien In Post-Break Trading.(Brief Article)
February 20, 2006... Any doubts that lingered about the market's appetite for a $2.25 billion second lien loan were quashed last week as the second lien tranche of the bank deal to back Koch Industries' acquisition of Georgia-Pacific Corp. freed to trade in the 102...

Navistar Receives Notice Of Bond Defaults, Seeks New Loan.
February 20, 2006... After receiving a trustee notice of default on a number of its notes, Navistar International Corp. is now looking to the loan market for a $1.5 billion unsecured term loan to pay back the bond debt on which the Warrenville, Ill-based company is...

Bain Plans Debt Package To Back Burlington LBO.(Leveraged buyouts)(Brief Article)
February 20, 2006... In order to finance its leveraged buyout by Bain Capital, Burlington Coat Factory Warehouse Corp. plans to tap the debt markets for more than $2 billion in debt, the company disclosed in a Securities and Exchange Commission filing on Monday....

JPM Launches AWAS Term Loan, Second Lien.(JPMorgan )(Brief Article)
February 20, 2006... Last Thursday, sole lead arranger JPMorgan began shopping a $2.05 billion loan package to support Terra Firma Capital Partners' acquisition of AWAS Aviation Holdings from Morgan Stanley. The bank deal consists of a $1.8 billion, seven-year...

Blackboard Returns To Market.(to acquire WebCT)(Brief Article)
February 20, 2006... Blackboard returned to the leveraged loan market last week with a $70 million bank deal for which proceeds will go primarily to fund its acquisition of WebCT. Blackboard and its lead arranger Credit Suisse had initially sought an $80 million...

UBS Shops Stallion Oil Field.(acquisition)(Brief Article)
February 20, 2006... Last Tuesday, sole lead arranger UBS hit the market with a $215 million bank deal for Houston-based Stallion Oilfield Services. The deal is split between a $75 million, five-year revolver and a $140 million, six-year institutional term loan;...

Lehman Launches US Leveraged Loan Index.(Brief Article)
February 20, 2006... Last Thursday, Lehman Brothers announced it is starting up an index for US high yield loans to gauge the performance of the floating rate leveraged loan market. In addition to providing a broad market benchmark for the rapidly growing asset...

Moody's Expects Loan Defaults To Rise In '06.(Brief Article)
February 20, 2006... After another relatively benign year default-wise, Moody's Investors Service expects that the syndicated loan default rate will rise to 2.6% by the end of this year, the rating agency said in a report released last week. The default rate for...

GE CF's Nemia Named Prez Of CFA.(Brief Article)
February 20, 2006... GE Commercial Finance Corporate Lending (GE CF) announced last week that senior managing director Joseph Nemia has been elected as the new president of the Commercial Finance Association (CFA), which is the trade group of the asset-based...

RBS Hires Two For European Loan Markets Team.(Royal Bank of Scotland)(Brief Article)
February 20, 2006... The Royal Bank of Scotland has appointed Victoria Read as an associate in European corporate loan origination to RBS' loan markets team. She will maintain a specific focus on acquisition and French market deals. Read, who will report to Declan...

Associations Form The Global Capital Markets Board.(International Capital Markets Association)(Brief Article)
February 20, 2006... The International Capital Markets Association, the International Swaps and Derivatives Association and The Bond Market Association (BMA) announced last week the formation of the Global Capital Markets Board (GCMB). The associations are creating...

Ratings Movers: Penney Up To I-Grade/BSX Expected To Fall.
February 20, 2006... J.C. Penney Co. emerged as a rising star last week as Moody's Investors Service upgraded the company's $1.2 billion unsecured revolver to Baa3 from Ba1. The upgrade is a result of the Plano, Texas-based retailer's strong operating results -...

Weetabix Tight Sub Debt Prices Show Popularity Of Euro Mezz.
February 20, 2006... As far as subordinated debt issuance in Europe is concerned, the GBP616.6 million recapitalization for UK cereal maker Weetabix said it all. Following a reverse price flex, the highly popular deal's GBP80 million, nine-and-a-half-year...

Flurry Of Retail Cos Seek Loans, Bonds To Back M&A Activity.(mergers and acquisitions)
February 24, 2006... The high volume of M&A activity in the retail sector provided the leveraged bank loan and high yield bond markets with a good number of deals in 2005. And if activity in the early part of this year is any indication of what's in store for the...

Bank Trio Shops Plum Point Plant Loan.
February 24, 2006... Coming off of the long holiday weekend, joint lead arrangers Credit Suisse, Goldman Sachs and Merrill Lynch began pitching a $760 million bank deal to finance the long-term construction of a coal plant. The deal, which launched for syndication...

USF Reform Could Hurt Wireless Cos.
February 24, 2006... Over the past few years, many wireless operators, particularly smaller players in rural areas, have been relying upon disbursements from the Universal Service Fund (USF) as means of increasing cash flow with little or no additional cost to...

GSC Hires Paine To Run Fund After Doscher, Horan Depart.
February 24, 2006... Alternative asset management firm GSC Partners announced that it has appointed Robert M. Paine as senior managing director in charge of the firm's new hedge fund. Paine was recruited following the departures of Drew Doscher and Jeffrey Horan...

Spanish Broadcasting Repays Second Lien Despite Call Protection.(Brief Article)
February 24, 2006... Apparently undeterred by a 1% repayment premium, Spanish Broadcasting System announced last week that it had repaid its $100 million second lien term loan with $101 million of proceeds from its recent sale of a pair of radio stations to Styles...

Banks Shops Serena Software Loans.
February 24, 2006... Lehman Brothers, Merrill Lynch and UBS are in the market with a $450 million credit facility in connection with the leveraged buyout (LBO) of Serena Software by Silver Lake Partners. The deal is split between a $75 million, six-year revolver,...

Credit Suisse Trims Pricing On O2, Flag Luxury.(Brief Article)
February 24, 2006... Last week, sole lead arranger Credit Suisse trimmed pricing on the GBP265 million, six-year term loan B for British mobile phone operator O2 to Libor plus 350 bps from initial talk in the Libor plus 375 bps to 400 bps range. The loan is being...

Ball Corp. Hires DB, JPM For Financing.(Deutsche Bank )(JPMorgan)(Brief Article)
February 24, 2006... Ball Corp. has received a commitment from JPMorgan and Deutsche Bank for $500 million in senior secured financing in connection with the Broomfield, Colo.-based company's acquisition of US Can Corp.'s US and Argentinean operations, Ball Corp....

Moody's Rates Wood Street CLO II.
February 24, 2006... Last week, Moody's Investors Service assigned provisional ratings to the five tranches of notes to be issued by Wood Street CLO II, a high yield collateralized loan obligation (CLO) managed by Alcentra Limited. The 200.7 million class A senior...

Moody's Extends Comment Period On Proposed Ratings.(Brief Article)
February 24, 2006... Last week, Moody's Investors Service announced it was extending the comment period on its proposed loss-given default (LGD) and probability of default rating until March 31, 2006, to ensure that all interested parties have an opportunity to...

Morgan Stanley Recruits Citigroup's Nayyar.(Ashok Nayyar )(Brief Article)
February 24, 2006... Morgan Stanley announced that Ashok Nayyar has been hired as co-head of leveraged and acquisition finance. Nayyar, who will begin in his new position in the week of May 1, will head to Morgan Stanley from Citigroup, where he was the head of US...

BofA Appoints New Florida Market Prez.(Bank of America appoints Robb Hilson)(Brief Article)
February 24, 2006... Bank of America has named Robb Hilson, the credit services executive for BofA's global corporate and investment banking, to the role of Florida market president. In his new role, Hilson will oversee BofA's 17 markets in Florida. Previously, he...

RiverSource Launches Floating Rate Fund.(mutula funds)(Brief Article)
February 24, 2006... RiverSource Investments, a subsidiary of Ameriprise Financial, launched six new mutual funds, including a floating rate fund. The RiverSource Floating Rate Fund will invest primarily in floating rate debt instruments, including bank loans,...

Fitch: More Chinese CDO Issuance In 2006.
February 24, 2006... In a report released last week, Fitch Ratings said that it expects more Chinese collateralized debt obligation (CDO) issuance in 2006. This is after the country's first CDO was launched at the end of last year - an event that represented the...

Merrill Reshuffles Asia Pacific Structured Finance Staff.(Merrill Lynch appoints Jim Yang and Tim Grady )(Brief Article)
February 24, 2006... Merrill Lynch announced details of changes in its Asia Pacific structured finance business. Jim Yang will move from New York to Hong Kong to lead the bank's Asian-based finance, securitization and principal investments group. He will report to...

Ratings Movers: Hexcel Climbs/Moody's Cuts TriMas Loans.
February 24, 2006... Thanks in part to its significant reduction of debt, Hexcel Corp.'s bank debt rating climbed to BB- on February 17, as Standard & Poor's upgraded the company one notch from B+. The outlook is positive. "The upgrade reflects an improved...

Avoiding Quarterly Covenant Anxiety With An Asset-Based Loan.
February 24, 2006... by Ira Kreft, executive vice president, and Jason Krieg, assistant vice president, Bank of America Business Capital It's no secret that it's a borrower's market and companies can easily tap market liquidity for their capital needs. Debt...