Extended Stay, Ameriforge trade up; Peak 10 tightens pricing; big bid remains despite outflow

By Paul A. Harris

Portland, Ore., June 6 – In the bank loan primary market Extended Stay America Inc. priced a $375 million senior secured term loan on Friday and Ameriforge Group Inc. priced $100 million of add-on loans.

Both deals traded higher.

And Peak 10 Inc. tightened down spreads and decreased the discounts on $460 million of term loans.

The bid for bank loans remains intense, a trader commented, despite Thursday’s news that bank loan mutual funds and exchange traded funds sustained $1.1 billion of outflows for the week to Wednesday.

“Away from retail, loans are better bid,” the trader said Friday, and noted that CLOs and separate bank loan accounts continue to see cash come in.

Part of the cash migration reflected in Thursday’s outflow news is likely loan ETF investors moving into stocks, said that trader, conceding that for that class of investor the move might make sense.

“The market is up ¼ point on the week, said the trader, who related information reported Thursday by Lipper AMG.

“Every deal is a blowout. Everything is bid.

“And guys are reaching for yield.”

The LCDX22 index of bank loan credit default swaps rose 1/8 point on Friday, closing at 104¾ bid, 105¼ offered, according to a market source.

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