With Ascension Day in continental Europe yesterday, the secondary high-yield and leveraged loan markets werew quiet, although tone has been more constructive than earlier in the week, according to sources.
While bits and bobs traded, the secondary loan market was steady. In post-break trading, Grohe’s €175 million (E+550 with 1.25% floor) TLB softened slightly from 99.25 on the break and 98.5 at reoffer, sources said, although the loans are slightly higher today and wrapped around 98.5 given the firmer tone in the secondary, according to sources.
Although Greece’s elections on June 17 have been marked in the diary, situations around loan borrowers continue to develop. Market players are expecting launches from Alain Afflelou, Bravida, and Global Blue, while KMD, Birds Eye Iglo, and BSN Medical are being worked on in the background. New Look’s full amend-to-extend request is said to be imminent, while Vivarte’s final deadline is Friday.
In high-yield, trading activity has been kept at bay due to the state of paralysis that has set in. Moves in either direction are expected to be amplified, as is often the case while the macro picture remains uncertain, and the market lacks a clear direction. The last deal to price in high-yield – Schmolz & Bickenbach 9.875% notes due 2019 – are wrapped around 97.5 and half a point lower from break, but still higher than the 96.957 reoffer. Carlson Wagonlit 7.5% notes due 2019 are a point softer from par reoffer, and quoted at a mid-price of 99.
Kerling 10.625% notes due 2017 are unchanged at a mid-price of 93 today ahead of the company’s conference call tomorrow afternoon to discuss its first-quarter results. EBITDA for the quarter was €40 million, versus €37 million in the first quarter of 2011, while full-year 2011 U.K. GAAP EBITDA was €193 million. Performance in the chlorvinyls business improved, European PVC prices increased amid stable demand, and caustic demand showed signs of improving, the company said. Net cash flow from operating activities was €51 million, and the group was in compliance with its financial covenants as of March 2012. –Sohko Fujimoto