Avis loan trades up 4 points; LCDX up 15 bps; loan funds see $41 million weekly inflows

By Paul A. Harris

St Louis, July 16 - The leveraged loan market passed a relatively quiet Thursday, sources said, adding that traders were focused on CIT Group bonds, which underwent a massive sell-off as the troubled commercial lender is perceived to be on the verge of bankruptcy.

The LCDX index was at 88.80 bid, 89.10 offered just before the close, up 15 bps, a trader said.

Aside from the interest in CIT there was little trading in the secondary market, the trader remarked, adding that the day's bank loan trading log comprised a single page; the biggest trade recorded there was $3 million.

The sole exception was the bank loan of Avis Budget Group Inc., which "popped" in the afternoon, gaining 4 points on the day.

In the primary market, word circulated on small deals from American Dental Partners, Inc. and MSC Software Corp.

Meanwhile, bank loan mutual funds enjoyed positive cash flows for the week to Wednesday.

The funds saw $41.2 million of inflows, according to AMG Data Services, a market source said.

Year-to-date inflows total nearly $2.24 billion, the source added.

Avis loans up sharply

The Avis term loan "popped during the afternoon," a trader said on Thursday.

In addition, the company's credit default swaps tightened about 5 basis points on the day.

The news circulating the market was that Avis has undertaken an effort to sell $400 million of auto-backed bonds.

The trader saw the term loan at 84 bid, 85 offered, in one place, and 82 bid, 85 offered in another place - up 3 to 4 points on the day.

"That happened in the afternoon," adding that the secondary market was otherwise quiet.

American Dental plans loan

American Dental Partners plans to syndicate a $120 million credit facility next week, according to a market source.

KeyBanc Capital Markets is the arranger.

American Dental Partners is a Wakefield, Mass.-based provider of dental facilities, support staff and business services to dental group practices.

MSC Software to bring $80 million

Elsewhere MSC Software Corp. rolled out an $80 million credit facility.

The deal is comprised of a $65 million term loan and a $15 million revolver.

Early guidance is for a rate of Libor plus 650 bps.

Wells Fargo, Foothill Capital Corp. and CapitalSource, Inc. are leading the deal.

Proceeds will go towards the buyout of the company by Symphony Management Group and Elliott Associates.

MSC Software is a Santa Ana, Calif.-based developer and marketer of simulation software, serving the aerospace, automotive, defense, heavy machinery, electronics, consumer products, biomedical, shipbuilding and rail industries, as well as in universities and research.

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