ServiceMaster to launch $1.8 billion; Rackspace tightens pricing; loan paper drought continues

By Paul A. Harris

Portland, Ore., Oct. 25 – In an overall quiet leveraged loan market, bank loan paper remained well bid on Tuesday, a trader said.

With 12 straight weeks of retail inflows to dedicated bank loan funds the loan market is starved for new paper, the trader remarked.

“Instead, all we’re getting is these retread deals,” the source added, referring to the recent onslaught of repricing deals and extensions which do not afford investors to put cash to work in genuinely new bank deals.

There was news in the primary market.

ServiceMaster Global Holdings, Inc. plans to launch a $1.8 billion credit facility at a bank meeting on Wednesday.

And Rackspace Hosting Inc. tightened talk on its $2 billion seven-year covenant-light term loan.

Also, Hoffmaster Group Inc. set price talk on $515 million of term loan debt in two tranches on Tuesday, according to a market source.

Cooper-Standard Holdings Inc. set price talk for its $340 million seven-year term loan B (Ba1/BB+) at bank meeting on Tuesday, according to a market source.

And ABB Optical Group/Con-Cise Optical Group LLC talked a $48 million senior secured incremental first-lien term loan B (B1/B) at a 500 bps spread to Libor atop a 1% Libor floor at 99.50, a market source said.

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