Hercules meeting set; rally takes a breather but optimism remains

By Paul A. Harris and Sara Rosenberg

New York, Nov. 22 - The leveraged loan market heard word that Hercules Inc.'s bank meeting is set for Monday afternoon in New York. Meanwhile the recent rally in the secondary took a breather but market participants remained confident about the outlook.

Credit Suisse First Boston and Wachovia Securities are the lead banks on the loan for Wilmington, Del. chemical company Hercules. The facility consists of a $150 million revolver and a $200 million term loan B.

Although official pricing was not heard, one market source told Prospect News that the B piece will be 325 basis points over Libor.

Hughes Electronics Corp.'s new deal, which broke in the secondary on Thursday at 99 5/8 to 99 7/8, experienced a lot of trading activity on Friday at around 99 7/8, according to a trader.

The recently launched $1.3 billion credit facility (Ba3) consists of a $700 million revolver with an interest rate of Libor plus 400 basis points and an $800 million loan B with an interest rate of Libor plus 450 basis points.

Proceeds will be used to refinance existing debt.

Bank of America and Salomon Smith Barney are the lead banks on the deal.

Hughes is an El Segundo, Calif. provider of digital entertainment, information and communications services and satellite-based private business networks.

Nextel Communications Inc.'s term B and C bank debt settled a little on Friday with quotes around 92¾ after trading around 93 on Thursday, a trader told Prospect News.

Charter Communications Inc.'s bank debt though was said to be holding in at 841/2, 851/4, according to a trader. On Thursday, there were a couple of trades that took place at 85, the trader added.

Meanwhile, market participants seem fairly optimistic about the recent rally that has been apparent in the secondary bank loan market despite the fact that it "took a little breather today," a trader said. Sometimes a rally stalls because sellers have entered the market, he explained, adding that it doesn't seem to be the case here.

"[The] recent trade up has really got some legs to stand on," the trader concluded.

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