The U.S. collateralized loan obligation market and the loan market that feeds it are both off to a slower-than-expected start, while bond issuance is trailing its historical range of supply average since 2006.
Moodys believes leverage will rise to 5.5x to 6.0x as EBITDA falls to under $2 billion in 2017.
Proceeds from the bond sale will be combined with a $1.53 billion term loan B and a $100 million revolver to fund the company's buyout.
Moodys stated that its Liquidity Stress Index through mid-February has shot up to 4.3%, continuing a trend in January that saw weakening liquidity in the volatile energy sector.
Moodys Investors Service and Standard & Poors issued comments Friday stating that the existing ratings for the market-leading online travel agency would not be impacted, even if the entire $1.6 billion transaction were to be funded with debt.
Citgo Petroleum also allocated its $1 billion term loan B, upsizing the offering to $1.3 billion.
The bulk--$3.25 billion--was issued by Dollar Tree to fund its buyout of Family Dollar.
The retailer has increased its senior notes offering to $3.25 billion and revised its term loan tranches.
High-yield bonds experienced a second-consecutive banner week of new money pouring into mutual and exchange traded funds, while investors took net withdrawals from loan funds for a 30th consecutive week.
Citgo Petroleum is planning a road show Thursday as it prepares to price a $1.5 billion, five-year senior secured notes issue that will help fund capital purchases as well as a dividend for the state-run Venezuelan parent firm Petróleos de Venezuela. Price talk also emerged Tuesday for a $1 billion companion loan proposal.
Chief Financial Officer
Firm: Windstream Holdings