OM Group sets bank meeting; B&G Foods sets talk; loan funds see $225 million Friday outflow

By Paul A. Harris

Portland, Ore., Oct. 5 – Trading was sparse on Monday, and loans ended flat, according to a trader based on the East Coast of the United States.

Dedicated bank loan funds saw $225 million of outflows on Friday, the most recent session for which data was available at press time, the trader said, adding that it was a big daily outflow.

If there is any evidence that the asset class is showing any wear, with respect to week-upon-week of negative cash flows being reported, it is in the high beta names, the trader said, adding that it has become more difficult to persuade investors to get involved in the lower-quality portion of the credit spectrum.

The LCDX 22 index of bank loan credit default swaps finished the day one-eighth of a point higher at 100 1/8 bid, 101 1/8 offered.

OM Group bank meeting

OM Group Inc. plans to roll out $575 million of term loan debt at a bank meeting scheduled to start at 11 a.m. ET on Tuesday.

The deal includes $450 million equivalent of seven-year first-lien term loan paper. The tranches include $300 million of dollar-denominated paper and $150 million equivalent of euro-denominated paper.

Price talk for both first-lien tranches is Libor plus 550 basis points with a 1% Libor floor at 98. The first-lien loans have 101 soft call protection for six months.

The deal also includes a $125 million of eight-year second-lien term loan talked at Libor plus 950 bps with a 1% Libor floor at 97. The second-lien loan comes with a year of call protection, then becomes callable at 103, with the call premium stepping down to 102 after two years, and to 101 after three years.

Credit Suisse is the lead.

Proceeds will be used to help fund the acquisition of the company by Apollo Global Management LLC.

Credit ratings remain to be determined.

B&G Foods talk

B&G Foods Inc. set spread talk for its $500 million seven-year second secured term loan B at Libor plus 325 bps to 350 bps atop a 75 bps Libor floor.

The deal has price talk of 99 to 99.5.

There is a six month soft call at 101.

Commitments are due at noon ET on Oct. 19.

Barclays, Bank of America Merrill Lynch, RBC Capital Markets, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc. and BMO Capital Markets are the lead banks on the loan.

Proceeds will be used to help fund the company’s acquisition of the Green Giant and Le Sueur brands from General Mills Inc. for about $765 million.

Other funds for the transaction will come from borrowings under the company’s existing $500 million undrawn revolving credit facility.

Quanex hikes talk

Quanex Building Products Corp. increased spread talk to Libor plus 525 bps from 375 bps for its $310 million seven-year covenant-light term loan B.

The earlier talk was 50 bps inside of expectations of Libor plus 425 bps with a 1% Libor floor, which appeared in document that the company filed in late August with the Securities and Exchange Commission.

Discount talk has the loan pricing at 98, adding one point of OID to previous talk of 99.

The deal still features a 1% Libor floor.

Re-commitments are due at noon ET on Tuesday.

The term loan has 101 soft call protection for six months.

Wells Fargo is the lead arranger and bookrunner.

Proceeds will be used to help fund the acquisition of Woodcraft Industries for about $248.5 million, to refinance existing debt and for general corporate purposes.

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