Brand Services emerges but quiet week seen; merchant energy firms

By Paul A. Harris

St. Louis, Mo., Sept. 6 - The leveraged loan market was heard to be drawing a breath Friday as some anticipated Wednesday's marking of the anniversary of the Sept. 11, 2001 terrorist attacks on New York and Washington D.C.

In terms of new business, a source mentioned that Bank of America is quarterbacking the Washington Redskins refinancing. And the launch window for St. Louis scaffolding firm Brand Services, Inc. appears to be the week of Sept. 9.

Aftermarket trading was quiet, sources said, although there is evidence that some interest is being taken in select merchant energy names.

Noting that Wednesday marks the first anniversary of the terrorist attacks on the U.S., one market source commented: "Most people have tried to avoid next week for launching anything."

This source also commented Friday that a certain amount of paper that is coming in the leveraged loan market hinges upon the ability of the companies to complete the high yield pieces of their transactions.

"It's kind of hand in glove to some extent," the source said.

"All of these acquisitions and refinancings and restructurings require some long-term passive capital in the form of sub debt. And when that market isn't there nothing happens."

The source mentioned Swift & Co.'s $550 million secured credit facility (Ba2/BB) via Citibank and JPMorgan Chase as a case in point.

"The banks have been sitting around with a commitment in hand waiting for that bond deal to get done," the source said. "That deal's waiting for some sub debt before the banks can actually close."

"You've got much the same thing with Le Reve," the source added, citing Wynn Las Vegas' $1 billion senior secured credit facility.

"Wynn's got his money from the banks, there's no doubt about that," the source said. "Bank of America and Deutsche Bank put together a facility. They underwrote it. The banks are reasonably satisfied and I think it is circled up.

"But the bond has to get done and he has to raise some equity. So the three legs of the stool have to be in place and then he can start digging a hole out in Vegas."

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