BofA Syndicates QVC's TLB After Yanking It From Primary
July 2, 2009
Just days after pulling the deal off the primary market, Bank of America has syndicated a $500 million term loan B for QVC to a group of investors.
Bank of America began shopping the loan, due 2015, for QVC last week (LFN, June 26, 2009) but pulled the deal Monday. Price talk was at Libor plus 350 bps, with an OID between 98 and 98.5. The loan also featured a 2% Libor floor. QVC, a West Chester, Pa.-based television home shopping company, plans to use the proceeds for general corporate purposes and to repay existing debt.
The deal was pulled, sources said, because the credit agreement was loosely written. Lenders have been hesitant to sign onto a deal that has weak covenants because they want as many protections as possible.
QVC is rated BB+ by Standard & Poor’s. However, the term loan is rated BBB, two notches above junk. The company rating reflects QVC’s participation in a highly competitive retail industry and current pressure on consumer spending. Moreover, the rating reflects the company’s high debt leverage and historically aggressive financial policy.
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