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Supervalue Reprices $1B Revolver

– Supervalu last week completed a repricing and extension of its existing $1 billion asset-based revolver, as well as an amendment that allows the Eden, Prairie, Minn.-based chain to expand an existing $1.5 billion term loan B by $500 million.

Koppers Plans $300M Term Loan, Upsized Revolver

– Koppers Inc., a worldwide commercial wood products and treatment producer, is planning an upsized revolver and a new $300 million term loan to finance the $460 million acquisition of two business units from Osmose Holdings, Inc. announced last week.

Denbury Sells $1.25B in Bonds

– Oil and natural gas provider Denbury Resources sold $1.25 billion in a bond offering upsized from $1.1 billion. The company plans to use the proceeds to repurchase existing bonds. The Plano, Texas-based company will use the proceeds to repurchase all of its $996.3 million in 8.25% senior subordinated notes due 2020 via a tender offer.

IACPM: Mixed Outlook on Spreads, Defaults

– While the outlook for credit spreads have improved worldwide, particularly in Europe, defaults are expected to take a turn for the worse, according to a quarterly credit outlook survey by the International Association of Credit Portfolio Managers released today.

Rice Energy Prices $900M in HY

– Rice Energy sold $900 million in a junk bond offering Thursday that was upsized from $750 million. It plans to use the proceeds to repay and retire its second-lien term loan debt.

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Numericable Deal Brings $16B in European HY

– Numericable Group S.A.’s acquisition of SFR, the telecom subsidiary of Vivendi, could be a bellwether for Europe’s fast-growing junk bond market. It’s a sign of growing confidence European issues have in demand for their debt.

Banks Go on Offense to Defend Leverage

– A JPMorgan analyst pointed to the rising level of leveraged loan syndication volumes at a handful of large-cap and regional banks – and warned of a parallel to the mortgage crisis that boiled over nearly seven years ago. All the banks, see, however, is just overheated rhetoric.

Just How Lite is Covenant-Lite?

– There’s no question that the quality of loan covenants has been weakening as investors line up to lend money to below investment grade companies. But the requirement, or lack of a requirement, to maintain certain financial ratios, such as a maximum amount of debt as a percentage of assets, is just one measure of covenant quality.

Memo to Regulators: Restricting CLOs Could Stifle Economy

– CLOs are a critical resource for many corporations. Unfortunately, proposed risk retention rules would result in a drastic rise in the cost of financing and a reduction in credit availability for many innovative American companies.

A Year Later, Confusion Over Leverage Limit Remains

–   More than a year after federal regulators sent out updated interagency guidance for banks on leveraged lending, most of the industry is still waiting on some clarity on what examiners will be expecting. What that clarity involves, apparently, is to figure out the disparate interpretations coming out of the Federal Reserve and the Office of the Comptroller of the Currency, say industry observers. …

Bonds.com Sees Buyers, ETFs Taking Lead

– While most bonds are traded over-the-counter, electronic trading has gained continued momentum. Leveraged Finance News spoke with George O’Krepkie and Michael Kovach of Bonds.com and asked them about the future of electronic trading for high yield bonds.

Refis Still Rule in First Quarter

– Refinancing activity continued to drive issuance of leveraged loans and high yield corporate bonds in the first quarter of 2014, even if these markets got off to a slower start than they did in 2013.

Energy Future Ch. 11 Will Mostly Boost Distressed

– A bankruptcy filing by Energy Future Holdings could create a buying opportunity if, as some expect, there is a knee-jerk sell-off in the broader junk bond and leveraged loan markets. But the real action will be in the $38 billion of the company’s own debt, where the smart money has already lined up to fight over potential assets.

Icahn Setting Roots in Federal-Mogul?

– For years, Street insiders have looked at Federal-Mogul as an inviting piece of the Carl Icahn universe that is destined for a sell-off by the activist investor. In the latest round of refinancing and deleveraging at the Southfield, Mich., firm, though, it appears Icahn is continuing to prep the company for a long-term run under his umbrella.

Still No Volcker Relief for CLOs

– Despite considerable pressure from Capitol Hill, it does not appear that regulators charged with implementing the Volcker Rule plan to make it easy for new collateralized loan obligations (CLOs) to hold bonds.

House Vote Sends Message on Volcker-CLO Spat

– The U.S. House Financial Services Committee passed a bill March 14 granting a two-year extension to divest in CLOs they are prohibited from holding by the Volcker Rule. Industry groups are hoping the bill adds pressure to regulators to reverse their stance and allow banks to maintain CLOs with bond assets.

Columbus Refinances Close to Wire

– Columbus International Inc., a privately held Latin American telecom and cable provider that has borrowed heavily to finance an acquisition spree, is coming to market with a $1.25 billion bond offering intended to push out its maturities and finance another small acquisition.

Inching Toward Finale on FACTA

– Collateralized loan obligations appear to have escaped the worst of the Foreign Account Tax Compliance Act, or FATCA. The last substantial package of regulations necessary to implement the law lets most vintage CLOs off the hook.

More Shareholder Activists Targeting Creditors

– Activist shareholders have a reputation for pushing changes that benefit all of a company’s stakeholders, but they can also convince management to take action that is unfriendly to creditors.

Tall TASC Ahead for Defense Contractor

– January’s bipartisan federal budget agreement took some of the sting out of forthcoming mandatory defense spending cuts for contractors like TASC. But a second-half 2013 revenue drain still clouds the forward view of the company’s performance, says Moody's.

Bankers Seek Added SBA Lending Authority

– The U.S. Small Business Administration is one of the few government agencies that remains popular with community banks.

Meshing Cultures the Challenge for IMG, WME

– This methodical pace to put together a $2.5 billion loan package seems to be in line with a careful integration strategy observers say is being followed to map out cost-cutting, as well as what could be a new challenging management culture – now that IMG is coming under the leadership of WME’s brash co-CEO Ari Emanuel.

Caesars Continues Its Assets Shuffle

– With another reshuffling of assets among its subsidiaries, few are coming to praise Caesars Entertainment Corp., though none are ready to bury it either. The casino operator’s latest move has intensified speculation about a distressed exchange.

Big Banks, Not Regs, Seen As Big Threat

– Larger banks have unseated regulators as the bogeyman standing in the way of small banks' survival. Such pressure is prompting more bankers to talk about the need to gain scale — most likely through consolidation — to compete.

M&A to Drive Bond, Loan Volumes

– Overall issuance of high yield bonds may be down slightly this year, but mergers and acquisitions are likely to play a much bigger role. And financial sponsors may not have as much flexibility to lever up to make acquisitions, yielding to strategic acquirers.

Pushing Out the Refinancing Cliff

– The once-feared “refinancing cliff” of 2015 has been pushed back to 2018; but has this just created problems down the road?

Community Banks Warming Up to Loans

– Loan participations are poised for a comeback as community banks look at ways to keep the business of clients. Small banks have plenty of challenges as they try to book loans, including artificially low interest rates and deleveraging by some borrowers.

AerCap Buy of ILFC Brings $2.75B to Credit Markets

– The $5.4 billion merger of International Lease Finance Corp. (ILFC) and AerCap will bring some welcome supply to the high yield debt markets and put to rest uncertainty about the disposition of one of the largest aircraft leasing businesses.

League Tables Stable Amid CLO Surge

– The strong growth in U.S. CLO issuance last year didn’t do much to shake up manager league tables, in part because so many deals came from new entrants. But there was some churn in the top ranks.

PE Takes a Shot at Bankruptcy Deals

– For buyers, such bankruptcy auctions, known as 363 sales, are tricky but attractive. If successful, the buyers get a bank that is still under considerable stress but free from things like the holding company’s trust-preferred securities debt.

CLOs Shift Into Gear Despite Volcker Unease

– After coming to a near-halt after the final version of the Volcker Rule was released in mid-December, the primary CLO market has shifted cautiously into low gear, despite the fact that the rules of the road remain unclear.

Increasingly, Borrowers Can Be Choosers

– More corporate borrowers are negotiating for stronger controls over loan participations and syndications being worked out by arrangers. One feature growing more common in loan agreements today is the inclusion lists of disqualified institutions.

KKR Dials Back on Retail

– KKR is shuttering two funds aimed at individual investors and dedicated to investing in high yield, emerging markets and distressed credit. The move raises questions about the buyout firm’s plans for individual investors as well as the appeal of these assets.

Large Banks Crush Community Banks in Lending

– Smaller banks have long touted their ability to outperform bigger competitors when it comes to serving small businesses. That sentiment may no longer be true, some industry observers say. Technology is slowly eroding any advantage smaller banks once held.

HY Covenant Quality May Improve, Slightly

– The quality of high yield bond covenants will likely improve over the course of this year, but don’t expect a sea change in protections for bondholders.

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Andrew Wilmont

Lead European High Yield Portfolio Manager

Firm: Neuberger Berman Group

In the news: Andrew Wilmont Joins Neuberger Berman

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