roller coaster third quarter for leveraged finance maxwell_lfn100713.pdf · roller coaster third...

Reproduction or electronic forwarding of this product is a violation of federal copyright law! Site licenses are available - please call Customer Service 1-800-221-1809 or [email protected]

Godfrey Livermore: Dir. of reprints & Alternative Media Sales, 212-803-8351, [email protected]

Inside This Issue

Banks Shop $2.95B TLBfor Neiman Marcus LBO 2

Caesars Prices $2.5B Loan 2

CityCenter Plans $1.775B CF 2

Huntsman Seeks $1.15B in Loans 3

Syncreon Selling $850M in Debt 3

Average HY Trading VolumeDropped in Third Quarter 3

OGX Misses Interest Payment 3

Michael Baker Selling $350M in HY 7

Houlihan Lokey Hires Bankers 7

Data

High Yield Bond League Tables 5

Leveraged Loan League Tables 6

Loan Forward Calendar 7

Most Recent Closed Loans 8

Completed HY Bond Deals 9

HY Bond Gainers, Losers 10

HY Bond Fund Performance 10

Loan Advancers, Decliners 11

Loan Fund Performance 11

Loanbase Statistics 11

leveragedfinancenews.com Vol. 3, No. 38 October 7, 2013

Roller Coaster Third Quarter for Leveraged FinanceWhat a ride. The third quarter started off on a steady note as issuers

continued to take advantage of low interest rates to refinance both leveraged loans and high yield bonds. But issuance of bonds soon came to a screeching halt amid concerns that the end of easy money would send interest rates higher, only to resume with a vengeance once investors realized that Federal Reserve wasn’t in such a hurry after all.

Loans, which are floating rate, fared a lot better than fixed-rate bonds, though volatility in the broader capital markets took a toll here as well.

While the threat of the Fed “tapering” its bond purchases has abated, at least for now, it remains to be seen what impact there might be from the impasse over the U.S. budget.

“An indication of the complexities that confront the Fed-eral Reserve is just the incredible volatility in the reaction to the indication that they were going to start tapering. You saw the ripple effects globally,” said Anders Maxwell, a manag-ing director with investment banking advisory and restruc-turing firm Peter J. Solomon Co.

“You would say based on the trajectory that you are go-ing to probably have another record-breaking year in terms of overall issue,” Maxwell said. “We’re right back where we were in 2007.”

The new issue markets did resemble 2007 in terms of loan volume, which reached $290.7 billion in the third quarter,

(See Q3 2013 on page �)

Basel Will Worsen Big Banks’ Rate WoesThe risks from rising interest

rates—including the pain already be-ing felt by banks in their debt-securi-ties portfolios—are now on a collision course with the Basel III rules that take effect next year.

An uptick in interest rates, which regulators have warned banks about for some time, translated into a huge drop during the second quarter in the value of banks’ available-for-sale securities, and such values could continue to decline if rates rise further.

But the largest banks, which must

adopt a more complex version of Basel III known as the “advanced approaches” by Jan. 1, face a double whammy. Lower securities values would hurt their capital levels as measured under the new rules.

Banks have several options for easing the blow, including redirecting securities to areas of the balance sheet not subject to the accounting change.

Basel III has “effectively … brought interest rate risk into the capital calcu-lation for large banks,” said Hugh Car-

(See Basel on page �)

Bank CEOs Warn of U.S. Default RisksThe top executives from Goldman

Sachs and Bank of America Corp.on Wednesday warned of “serious re-percussions” if the U.S. government breaches the debt ceiling without a po-litical solution.

Speaking at a brief press conference at the White House, Bank of America Corp. CEO Brian Moynihan said lead-ers of some the top U.S. financial institu-tions spent their meeting with President

Barack Obama and Treasury Secretary Jacob Lew discussing the long-term ramifications of a government shut-down and the impact of a default, if the country’s debt ceiling is breached on Oct. 17.

“We spent most of the meeting talk-ing about what we see in the economy and how we see it being affected by that

(See Default Risks on page �)

LFN 10-07-13 LFN_1 1 10/3/2013 5:59:01 PM

cgiliberti

Highlight

� October 7, 2013 Copying without permission from SourceMedia LLC is unlawful.

Allison BisBey Editorial Director, Capital Markets [email protected] Phone: 212-803-8271MAtthew sheAhAn Senior [email protected] Phone: 212-803-8741KAren siBAyAn Senior [email protected] Phone: 212-803-8735DAnA JAcKson Director of ResearchtoBy wAlters Data ResearcherMiKe stAnton SVP & Managing Director, Capital Markets [email protected] Phone: 212-803-6552hArry niKpour Group Advertising [email protected] Phone: 212-803-8638Dennis strong Associate Director of Circulation Sales

Phone: 212-803-8761MichAel nAss Marketing Manager

Phone: 212 803-8278louis FugAzy National Account [email protected] Phone: 212 803-8773JoshuA goolsBy Advertising Coordinator

Phone: 212-803-6075goDFrey liverMore Director of Reprints & Alternative Media Sales

Phone: 212-803-8251hope Fitch-MicKiewicz Group Creative DirectorpABlo turcios Art DirectorJeAnnie nguyen Group Marketing DirectorMichAel cAnDeMeres Executive Dir. Print & Digital

Manufacturing & DistributiontiJAnA JovAnovic Fulfillment DirectorJAson teBAlDi Associate Production Manager

sourceMedia llc.

chieF executive oFFicer, Douglas J. ManonichieF FinAnciAl oFFicer, Rebecca Knoopevp & MAnAging Director, BAnKing AnD cApitAl MArKets, Karl Elkenevp, chieF content oFFicer, David Longobardievp, MArKeting solutions, Adam Reinebachsenior vice presiDent, conFerences, John DelMaurosvp, huMAn resources & oFFice MAnAgeMent, Ying Wong

For reprints, back issues and bulk distribution needs, please contactGodfrey Livermore at (800) 367-3989 or e-mail: [email protected].

Leveraged Finance News (ISSN 2160-7923) is published weekly except August 19th and 26th, and December 23th and 30th by SourceMedia LLC, One State Street Plaza, 27th floor, New York, NY 10004. Subscription price $3600 per year in the US and Canada; $3700 elsewhere. POSTMASTER: Send address changes to Leveraged Finance News/SourceMedia LLC, One State Street Plaza, 27th floor, New York, NY 10004. For sub-scriptions, renewals, address changes or delivery service issues contact our Cus-tomer Service department at (800) 221-1809 or (212) 803-8333; fax (212)-803-1592 email [email protected]; or send correspondence to Customer Service, Lever-aged Finance News/SourceMedia LLC, One State Street Plaza, 27th floor, New York, NY 10004. Copying for other than personal use or internal use is prohibited without express written permission of the publisher. This publication is designed to provide accurate and authoritative information regarding the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering financial, legal, accounting, tax or other professional service. Leveraged Finance News is a regis-tered trademark used herein under license.

© 2013 Leveraged Finance News and SourceMedia LLC. All rights reserved.

M a r k e t B u z z

Banks Shop $2.95B TLB for Neiman Marcus LBO

LOAN NEWSUpscale retailer Neiman Marcus is seeking a $2.95 bil-

lion covenant-lite term loan B to help fund its buyout by Ares Management and the Canada Pension Plan Investment Board. Credit Suisse, RBC Capital Markets, Deutsche Bank, Goldman Sachs and Morgan Stanley are arranging the loans and commitments are due Oct. 16. Proceeds, along with an $800 million, five-year asset-based revolving line of credit and some $1.56 billion of bonds, will help finance the $6 bil-lion buyout and repay existing debt. As of April 27, Neiman Marcus had $2.56 billion of term loans as well as $20 million under an ABL facility, according to a regulatory filing. The company’s $125 million of 7.125% notes will remain outstand-ing. The loans being repaid mature in May 2018 and were re-priced in February; the interest rate was reduced to Libor plus 300 basis points with a 1% LIBOR floor. Both Moody’s and S&P have put their ratings on the company under review for a possible downgrade as a result of the buyout, citing the ad-ditional debt it will be taking on. Moody’s currently rates the retailer B2; S&P rates it B+.

Caesar’s Entertainment priced its $2.5 billion term loan

below initial talk on the deal. It agreed to pay interest of Libor plus 600 basis points with a 1% Libor floor and an original issue discount of 98 cents on the dollar. That was 50 basis points above the 550 basis points spread the deal was marketed with. The discount was also widened, from 99 cents of face value originally, further increasing the return to investors. Citigroup is the lead manager. The Las Vegas-based casino operator had to pay up despite cutting the size of its seven-year loan, from $3 billion originally. The loans were issued by the company’s Caesars Entertainment Resort Properties subsidiary. Proceeds, along with $2.15 billion of bonds that priced last week and 10 million shares of com-mon stock, will be used to refinance existing debt issued by another subsidiary, Caesars Entertainment Operating Co.

CityCenter is in the market for a $1.775 billion senior se-cured bank facility that will be used to refinance existing bonds. The facility consists of a $75 million, five-year revolv-ing line of credit and a $1.7 billion, seven-year institutional term loan, according to Moody’s. Bank of America Merrill Lynch is on the left of the deal. Proceeds from the proposed bank facilities, along with approximately $348 million of

balance sheet cash will be used to refinance the company’s existing $1.149 million first-lien notes and $708.3 million second-lien notes. The refinancing will also include the conversion of $1.2 billion unsecured subordinated sponsor debt to equity. Moody’s has upgraded its corporate family rating on CityCenter to B3, saying the company’s debt/EBITDA ratio will “materially improve” to about 6.2 times from 11.2 times as well as generate additional cash flow that can be applied to debt repayment. CityCenter owns and operates CityCenter, a mixed-use development located on the Las Vegas Strip that opened in December 2009. It is a joint venture between MGM Resorts International and Infinity World, a subsidiary of Dubai World.

Salt Lake City-based chemical maker Huntsman Corp. is seeking $1.15 billion of term loans. J.P. Morgan is the lead underwriter. Proceeds will help fund the acquisition of Rockwood Specialties Inc.’s titanium dioxide (TiO2) and performance additives businesses. Huntsman has agreed to pay $1.1 billion in cash for the business and to assume about $225 million of unfunded pension liabilities. The loan is being talked at an interest rate of Libor plus 300-324 bps; at that price, Huntsman is willing to accept an original issue discount of 99.5 cents of face value, according to KDP Advisor. Huntsman has a BB corporate credit rating and a BB+ senior secured rating from S&P. The agency changed its outlook on Huntsman to negative,unsecured rating if the transaction is financed entirely with secured debt. Moody’s, whiching of Ba3 onpositive as a result of the acquisition.

Syncreon Group is on the market with a $625 million credit facility and $225 million bond offer offering to help fund a private equity firm’s minority investment in the company. Morgan Stanley, Goldman Sachs and UBS are shopping a $525 million term loan B due 2020 and a $100 million revolver due 2018. It also plans to bring an offering of $225 million in senior unsecured notes to the high yield market. Price talk on the term loan is at Libor plus between 400 bps and 425 bps with a 1% Libor floor and an original discounted price of 99% of par. The loans also have a 101% soft call protection for six months. Commitments are due Oct. 10. The supply chain service company plans to use the proceeds to help finance Centerbridge Partners’ purchase of a 40% stake in the company. The company announced the agreement Sept. 4. The company also plans to make a $425 million distribution to shareholders. Moody’s assigned Ba3 ratings to the loan and revolver and a Caa1 rating to the senior unsecured notes. It assigned B2 corporate family and probability of default ratings to the company. The outlook is negative. S&P rated the credit facility B and the proposed bonds CCC+. S&P lowered the company’s corporate credit rating to B from B+. Moody’s pointed out in a ratings report that the transaction will increase the company’s pro-forma debt-to-Ebitda leverage to approximately 7.0x from 4.8x.

Leveraged Finance news

LFN 10-07-13 LFN_2 2 10/3/2013 5:58:21 PM

Copying without permission from SourceMedia LLC is unlawful. October 7, 2013 �

Karl Elken

or e-mail: [email protected].

August 19thStreet Plaza,

Canada;FinanceNews/

For sub-our Cus-

(212)-803-1592emailService, Lever-

New York,withoutprovideIt is sold

financial, legal,a regis-

All rights reserved.

Banks Shop $2.95B TLB for Neiman Marcus LBO

below initial talk on the deal. It agreed to pay interest of Libor plus 600 basis points with a 1% Libor floor and an original issue discount of 98 cents on the dollar. That was 50 basis points above the 550 basis points spread the deal was marketed with. The discount was also widened, from 99 cents of face value originally, further increasing the return to investors. Citigroup is the lead manager. The Las Vegas-based casino operator had to pay up despite cutting the size of its seven-year loan, from $3 billion originally. The loans were issued by the company’s Caesars Entertainment Resort Properties subsidiary. Proceeds, along with $2.15 billion of bonds that priced last week and 10 million shares of com-mon stock, will be used to refinance existing debt issued by another subsidiary, Caesars Entertainment Operating Co.

CityCenter is in the market for a $1.775 billion senior se-cured bank facility that will be used to refinance existing bonds. The facility consists of a $75 million, five-year revolv-ing line of credit and a $1.7 billion, seven-year institutional term loan, according to Moody’s. Bank of America Merrill Lynch is on the left of the deal. Proceeds from the proposed bank facilities, along with approximately $348 million of

balance sheet cash will be used to refinance the company’s existing $1.149 million first-lien notes and $708.3 million sec-ond-lien notes. The refinancing will also include the conver-sion of $1.2 billion unsecured subordinated sponsor debt to equity. Moody’s has upgraded its corporate family rating on CityCenter to B3, saying the company’s debt/EBITDA ratio will “materially improve” to about 6.2 times from 11.2 times as well as generate additional cash flow that can be applied to debt repayment. CityCenter owns and operates CityCen-ter, a mixed-use development located on the Las Vegas Strip that opened in December 2009. It is a joint venture between MGM Resorts International and Infinity World, a subsidiary of Dubai World.

Salt Lake City-based chemical maker Huntsman Corp. is seeking $1.15 billion of term loans. J.P. Morgan is the lead un-derwriter. Proceeds will help fund the acquisition of Rock-wood Specialties Inc.’s titanium dioxide (TiO2) and perfor-mance additives businesses. Huntsman has agreed to pay $1.1 billion in cash for the business and to assume about $225 mil-lion of unfunded pension liabilities. The loan is being talked at an interest rate of Libor plus 300-324 bps; at that price, Huntsman is willing to accept an original issue discount of 99.5 cents of face value, according to KDP Advisor. Hunts-man has a BB corporate credit rating and a BB+ senior se-cured rating from S&P. The agency changed its outlook on Huntsman to negative, saying it could lower its BB- senior unsecured rating if the transaction is financed entirely with secured debt. Moody’s, which has a Ba3 corporate family rat-ing of Ba3 on Huntsman, changed its outlook to stable from positive as a result of the acquisition.

Syncreon Group is on the market with a $625 million cred-it facility and $225 million bond offer offering to help fund a private equity firm’s minority investment in the company. Morgan Stanley, Goldman Sachs and UBS are shopping a $525 million term loan B due 2020 and a $100 million revolver due 2018. It also plans to bring an offering of $225 million in senior unsecured notes to the high yield market. Price talk on the term loan is at Libor plus between 400 bps and 425 bps with a 1% Libor floor and an original discounted price of 99% of par. The loans also have a 101% soft call protection for six months. Commitments are due Oct. 10. The supply chain service company plans to use the proceeds to help finance Centerbridge Partners’ purchase of a 40% stake in the com-pany. The company announced the agreement Sept. 4. The company also plans to make a $425 million distribution to shareholders. Moody’s assigned Ba3 ratings to the loan and revolver and a Caa1 rating to the senior unsecured notes. It assigned B2 corporate family and probability of default rat-ings to the company. The outlook is negative. S&P rated the credit facility B and the proposed bonds CCC+. S&P lowered the company’s corporate credit rating to B from B+. Moody’s pointed out in a ratings report that the transaction will in-crease the company’s pro-forma debt-to-Ebitda leverage to approximately 7.0x from 4.8x.

BOND NEWSAverage high yield bond trading volume declined in

the third quarter due to a very sluggish August, accord-ing to TRACE. Average trading volume for the year is up from last year, however. Daily trading volumes for high yield bonds on the secondary market averaged $4.9 billion in the third quarter, down from an average of $6 billion in both the first and second quarters. September’s trad-ing volumes averaged $6.1 billion per day but August had average trading volumes of $3.9 billion per day. August is traditionally a less active time of the year, and investors took a breather in anticipation of stimulus curtailment on the part of the Federal Reserve. New issue activity roared back to life after Labor Day in early September and trad-ing volumes on the secondary market bounced back also. Average daily trading volume year-to-date is $5.6 billion. Year-to-date average daily trading volume for 2012 was $5 billion. According to TRACE, $5.5 billion in bonds traded Oct. 1 and $4.4 billion traded Sept. 30.

Brazilian oil and gas company OGX missed an Oct. 1 $45 million interest payment on its $1.063 in 8.375% senior notes due 2022 and will be holding talks with creditors as it contemplates bankruptcy. The notes were issued by the company’s subsidiary OGX Austria GmbH and have a 30-day grace period before default. The company said it has hired Lazard and Blackstone as financial advisors and to coordinate discussions with shareholders and bondholders. S&P downgraded the company’s corporate credit rating to D from CCC- and lowered its issue rating on the 2022 notes to D from CCC-. S&P also lowered its issue rating on the company’s $2.563 billion in 8.5% senior notes due 2018 to C from CCC-. The company is due to make a coupon pay-ment on those notes in December and S&P assumes it will miss that payment also. The company’s cash flow has been “virtually null” according to S&P’s ratings report and it had cash holdings of approximately $326 million as of June 30. The company may decide to file for bankruptcy protection and management and creditors are reportedly waiting for reports about the company’s current oil reserves before moving on restructuring.

Stackpole International sold $360 million in 7.75% senior secured notes due 2021. The bonds priced at par and on the low end of price talk, which was between 7.75% and 8%. The Canadian auto engine parts manufacturer plans to use the proceeds to help finance its acquisition by Crestview Part-ners. The company is currently owned by The Sterling Group and Current Capital. Funds will also be used to refinance existing debt. Morgan Stanley, Nomura, RBC and UBS were the bookrunners. The bonds were sold in a private offering and have a three-year non-call period. Moody’s rated the bonds B2 and assigned the company B2 corporate family


(See Market Buzz on page �)

LFN 10-07-13 LFN_3 3 10/3/2013 5:58:24 PM



a 9% increase over the same period of 2012 and the highest third quarter vol-ume since $358.4 billion in the third quarter of 2007.

Leveraged loans reached $1.23 tril-lion in the first three quarters of the year, passing the $1 trillion mark for the first time since 2007, which saw $1.45 trillion according to Dealogic.

Loans accounted for 76% of total leveraged finance, up from 74% for the first nine months of 2012.

Issuance isn’t the measure of the loan market’s strength, however: a record 242 amendments were made to decrease pricing on loans in the first three quar-ters of the year. That was almost three times the previous record of 86 amend-ments set during the full-year of 2011.

Junk bond new issue volume was $106.5 billion in the third quarter, making it the slow-est quarter since the second quarter of 2012, when there was just $61.1 billion. Despite a slower third quarter, however, new issue volume reached a nine-month record of $378.2 billion.

Slower issuance belied the fact that investors resumed purchases of bond funds in third quarter. “It seemed like every week was a full week and like all the money that left the market in June came back into the market in July, Au-gust and September,” said Brendan White, a portfolio manager with Fort Washington Asset Management.

He noted that this was a reversal from the second quarter, when inves-tors when pulled some $6 billion from bonds in the space of few weeks.

As the quarter headed to a close, is-suers took advantage of all the money sitting on the sidelines to raise large amounts of money. On Sept. 4, Sprint priced $6.5 billion of junk bonds, the largest junk bond deal on record. Sprint sold $4.25 billion in 7.875% senior notes due 2023 and $2.25 billion in 7.25% se-

nior notes due 2021. All told, September set a new

monthly record of $53 billion in new junk bonds topping the monthly record of $52 billion set just this past May, but White doesn’t seem to think we’ll see as a big of a new issue market in the fourth quarter. “Most of the near-term calen-dar got placed,” he said. “I think we’d have a slowdown without the tapering debate or the Washington debates.”

In other large deals, General Motors sold $4.5 billion in a three-part junk bond deal on Sept. 24. Tenet Healthcaresold $4.6 billion in a two-part bond deal on Sept. 21, the same day that Activision

Blizzard priced $2.25 billion in a two-part deal as well.

Some of the larger deals on the loan and bond markets came from companies that shuffled money out of loans and into bonds. For example, Caesars Entertain-ment moved money from its loan offers

to bond offers and sold $2.15 billion in a two-part bond offering and closing on a $2.5 billion loan. It had initially planned to price on at least $3 billion in loans.

Hilton Worldwide closed a $7.6 bil-lion term loan B priced at Libor plus 300 bps on Sept. 23 and Dell Internationalsold $6.16 billion in two term loans on Sept. 24 to help finance its buyout deal. Dell shifted money from the bonds to loans in the process of putting together the debt package. BMC Software closed on a two-part term loan B deal that to-taled more than $3.2 billion. And Vale-ant Pharmaceuticals closed on a $3.2 billion loan in June.

“The loan market is completely mis-understood by investors,” said Gershon Distenfeld, a portfolio manager Alli-ance Bernstein Capital. “Investors are throwing money right and left at it be-cause the mantra is ‘Floating rate good, fixed rate bad.’ … Everyone was so fo-cused on the Fed and the whether it was going to taper or not, but that has a very indirect impact on the high yield mar-ket. The dominant risk in high yield is

still credit risk, not rate risk.” Distenfeld said that loan investors

stand to be disappointed with returns, and that investors are not being com-pensated for the risks they are taking in the loan market. “Strong demand creates poor supply,” he added. “When the music stops and people realize what’s going on, there’s going to be no bids for loans.”

The third quarter showed a 2.50% returns for bonds but a 1.205% return for loans. Junk bonds beat out loans in September with returns of 0.94% versus 0.21% and year-to-date high yield bonds are outperforming lever-aged loans 4.33% to 3.5%, according to JPMorgan.

The average spread to benchmark for global high yield fell to 537 bps in the first nine months of the year, down 14% from the 625 bps set last year and the lowest average since 2007 saw a benchmark spread of 399 bps.

“There’s no pure play,” said Michael Wiginton, president of H.L. Wiginton Capital Management. “You’ve got to pick your poison as to which exposure you want to take.”

Junk bond volume by U.S. issuers increased 3% year-on-year to a record $201.2 billion in the first three quarters of 2013, up from $195.3 billion for the same period last year. European high yield volume reached a record $93.7 bil-lion, up 69% from the first three quar-ters of 2012, which saw $55.4 billion; and an increase of 53% over the previ-ous nine month record set in 2011.

Global leveraged finance totaled $1.6 trillion year-to-date as of Oct. 1, representing an increase of 61% from last year’s $997.7 billion.

The quarter ended with a bang for fund flows. High yield bond funds in-cluding exchange-traded funds took in $3.08 billion for the week ended Sept. 25, according to Lipper FMI.That weekly inflow significantly cut down the yearly outflow total for junk bond funds. Leveraged loan funds stayed fairly consistent with an aver-age weekly inflow of about $1 billion for the whole quarter. As of Sept. 27, year-to-date inflows for leveraged loan funds totaled $44.2 billion and junk bond funds were still negative to the tune of $2 billion. —MS

Q3 2013continued from page �

“The loan market is completely

misunderstood... The dominant risk in high

yield is still credit risk, not rate risk.”

LFN 10-07-13 LFN_4 4 10/3/2013 5:58:41 PM


ney, a senior counsel for the American Bankers Association. “That’s a prob-lem, and banks are struggling with how to manage it.”

The Federal Deposit Insurance Corp. recently reported that, from March 31 to June 30, the industry saw a $51 billion decline in unrealized gains from the se-curities banks classify as sellable in the open market. It was the largest quarterly drop in the nearly 20 years the FDIC has kept such data.

Rising rates are believed to be driv-ing investors to securities with higher returns than those held by banks. The yield on the 10-year Treasury bond, for example, rose from a low of 1.60% in early May to 2.48% by the end of the sec-

ond quarter. With interest rates still his-torically low, more volatility is expected. Regulators have advised institutions that interest rates can swing as much as 400 basis points in volatile periods.

FDIC Chairman Martin Gruenberghighlighted the sharp drop in unreal-ized gains when his agency released the Quarterly Banking Profile in Au-gust, and he warned about it again in a speech Sept. 23.

Interest rate risk “will continue to be a focus of attention in FDIC safety-and-soundness examinations, as well as guidance we provide to insured institu-tions,” Gruenberg said at the American Banker Regulatory Symposium.

But the coming Basel change, which will affect the 18 large banking com-panies subject to the “advanced ap-proaches,” has sounded a louder alarm.

Unrealized gains and losses in avail-able-for-sale securities are already re-ported in capital calculations under “Generally Accepted Accounting Prin-ciples.” But if the securities keep declin-ing in value, those losses would be de-ducted from banks’ regulatory capital measures starting in January.

U.S. regulators’ original proposal for implementing Basel III would have forced all banks to count their unreal-ized gains and losses from available-for-sale securities toward their regulatory capital. But after protests from com-munity banks and their supporters, the final rules unveiled in July applied the change only to the largest companies subject to the “advanced approaches.” Smaller institutions can still opt in to that requirement if they choose. —Joe Adler, American Banker

Baselcontinued from page �


Q3 2012Rank Bookrunner Deal Value $ No % Share Parents (Proceeds) (m)

1 JPMorgan 12,682 90 12.72 Bank of America Merrill Lynch 11,355 88 11.43 Goldman Sachs 10,355 52 10.44 Credit Suisse 10,335 59 10.45 Deutsche Bank 9,241 67 9.36 Citi 7,836 59 7.97 Wells Fargo Securities 6,135 61 6.28 Barclays 5,516 44 5.59 Morgan Stanley 5,045 36 5.110 RBC Capital Markets 3,539 28 3.6

Subtotal 82,038 170 82.4 Total 99,606 179 100.0


1 Bank of America Merrill Lynch 10,558 66 12.22 JPMorgan 9,674 68 11.23 Citi 8,157 62 9.44 Credit Suisse 7,608 51 8.85 Wells Fargo Securities 5,700 46 6.66 Deutsche Bank 5,649 39 6.57 Morgan Stanley 5,618 37 6.58 Goldman Sachs 5,010 38 5.89 Barclays 4,975 37 5.810 RBC Capital Markets 3,078 28 3.6

Subtotal 66,028 155 76.4 Total 86,441 157 100.0

US MARKETED HY BOOKRUNNER RANKING IN 3Q 2013 AND 2012

Source: Dealogic



Subtotal 89,309 201 75.9 Total 117,617 236 100.0


1 JPMorgan 11,146 81 10.52 Bank of America Merrill Lynch 10,793 69 10.13 Citi 9,268 70 8.74 Credit Suisse 8,069 55 7.65 Deutsche Bank 6,992 51 6.66 Goldman Sachs 6,859 46 6.47 Morgan Stanley 6,531 41 6.18 Wells Fargo Securities 5,700 46 5.49 Barclays 5,387 41 5.110 RBC Capital Markets 3,326 31 3.1

Subtotal 74,072 190 69.5 Total 106,583 209 100.0

GLOBAL HY BOOKRUNNER RANKING IN 3Q 2013 AND 2012

LFN 10-07-13 LFN_5 5 10/3/2013 5:58:49 PM


Q3 2012Rank Bookrunner Deal Value No % Share ($) (m)


Subtotal 89,309 201 75.9 Total 117,617 236 100.0

Q3 2013Rank Bookrunner Deal Value No % Share ($) (m)

1 Bank of America Merrill Lynch 30,610 168 16.22 JPMorgan 27,749 134 14.73 Wells Fargo Securities 16,658 111 8.84 Deutsche Bank 11,028 53 5.85 Credit Suisse 9,583 47 5.16 Citi 9,342 44 4.97 Barclays 9,217 54 4.98 Goldman Sachs 7,954 36 4.29 RBC Capital Markets 5,471 37 2.910 Morgan Stanley 4,675 31 2.5

Subtotal 132,287 368 70.0 Total 189,034 502 100.0

US MARKETED LEVERAGED LOANS BOOKRUNNER RANKING IN 3Q 2013 AND 2012

Q3 2012Rank Bookrunner Deal Value $ No % Share (Proceeds) (m)

1 JPMorgan 30,655 136 12.82 Bank of America Merrill Lynch 29,719 178 12.43 Wells Fargo Securities 18,503 113 7.74 Credit Suisse 12,890 46 5.45 Citi 12,759 59 5.36 Barclays 10,717 50 4.57 BNP Paribas 8,927 33 3.78 Goldman Sachs 7,988 43 3.39 Morgan Stanley 7,010 37 2.910 Deutsche Bank 6,840 49 2.9

Subtotal 146,008 405 60.8 Total 240,322 673 100.0

Q3 2013Rank Bookrunner Deal Value $ No % Share (Proceeds) (m)

1 JPMorgan 34,052 146 12.62 Bank of America Merrill Lynch 32,189 171 11.93 Wells Fargo Securities 16,839 112 6.24 Deutsche Bank 16,196 64 6.05 Citi 13,129 55 4.96 Credit Suisse 10,825 52 4.07 Barclays 10,770 61 4.08 Goldman Sachs 9,599 39 3.69 RBC Capital Markets 8,182 44 3.010 RBS 8,165 38 3.0

Subtotal 159,947 422 59.2 Total 270,226 692 100.0

GLOBAL LEVERAGED LOANS BOOKRUNNER RANKING IN 3Q 2013 AND 2012

Source: Dealogic

—and we see serious repercussions,” said Moynihan.

His counterpart at Goldman Sachs, Lloyd Blankfein, said it’s still unclear the depth of the damage that could be caused as a result of a U.S. default, but it would be “extremely adverse.”

“We’re here as representatives of the financial system,” said Blankfein. “We are in a position to really know early what the consequences are—none of us can be sure—again, it’s unprecedented, but this was a conversation that we lis-tened but we also contributed to exactly how bad it would be.”

The meeting at the White House came on the second day of the govern-ment shutdown after Congress failed to

broker a deal to avert having to shut-ter government offices and furloughed roughly 800,000 workers.

While the U.S. government has ex-perienced previous shutdowns, it has never defaulted on its debt.

“There’s precedent for a government shutdown,” said Blankfein. “There’s no precedent for default. We’re the most important economy in the world. We’re the reserve currency of the world. Pay-ments have to go out to people. If mon-ey doesn’t flow in, then money doesn’t flow out. So we’ve really never seen this before and I’m not really anxious to be a part of the process that witnesses it.”

Both chief executives made clear that the conversation with White House of-ficials did not address what the solution would be, which is in the hands of Con-gress, but rather the implications of the

current fiscal crisis facing the U.S. They also noted they have met with Republi-can leaders on the issue as well.

Michael Corbat of Citigroup Inc., Gerald Hassell of Bank of New York Mellon, James Gorman of Morgan Stanley, and John Strumpf of Wells Fargo & Co. were among the 14 top executives that met with President Obama and Secretary Lew.

The Financial Services Forum, a trade group representing the chief ex-ecutives of the 19 largest banking and insurance firms, led by Rob Nichols,set up the meeting.

U.S. banking regulators remain open in the wake of the shutdown, but the ongoing fiscal battle in Congress could still have significant implications for the financial services industry. —Donna Borak, American Banker

Default Riskscontinued from page �


LFN 10-07-13 LFN_6 6 10/3/2013 5:59:07 PM


* As of 10/03/13 Source: Leveraged Finance News

Announce Amt Commit Use ofDate Issuer Issue ($mm) Date Price Talk Banks Proceeds Industry

10/7/13 Neiman Marcus 1st Lien 2950 10/16/13 CSS Buyout Retail10/3/13 Hudson’s Bay Co. 2nd Lien 300 BAML Retail10/2/13 Huntsman Int’l TLB 1150 L+300-325 @ 99.5 JPM Acquisition Chemicals9/30/13 Progressive Solution 1st Lien 490 10/1/13 CSS Diversified Services9/30/13 Progressive Solution 2nd Lien 160 10/15/13 CSS Diversified Services9/30/13 Excelitas Tech 1st Lien 620 UBS Technology9/30/13 Excelitas Tech 2nd Lien 285 UBS Technology9/30/13 CityCenter Holdings TLB 1700 BAML Gaming9/25/13 El Pollo Loco 1st Lien 175 JEF Food/Food Services9/25/13 El Pollo Loco 2nd Lien 115 JEF Food/Food Services9/23/13 Renaissance Learning 1st Lien 310 RBC Dividend Recap Diversified Services9/23/13 Renaissance Learning 2nd Lien 120 RBC Dividend Recap Diversified Services9/20/13 Gentiva Health Services TLC 200 10/9/13 L+400 @ 99.5 BARC Healthcare/Hospitals9/20/13 Gentiva Health Services TLB 655 10/9/13 L+450-475 @ 99 BARC Healthcare/Hospitals9/19/13 Sinclair Television TLB 1000 10/4/13 L+225 @ 98.5-99 JPM Acquisition Broadcasting9/19/13 Tube City TLB 425 10/4/13 L+375 @ 99.5 JPM Acquisition Steel9/18/13 e-Rewards TLB 275 MS Diversified Services9/17/13 Mitchell International 2nd Lien 245 10/1/13 L+775-800 @ 99 BAML Buyout Technology9/13/13 Hyperion Insurance TLB 250 L+425 @ 99 JPM Insurance9/13/13 HealthPort 1st Lien 250 9/30/13 L+400 @ 99 CSS Dividend Recap Diversified Services9/13/13 HealthPort 2nd Lien 115 9/30/13 L+800 @ 98.5 CSS Dividend Recap Diversified Services9/6/13 Louisiana Pacific TLB 430 L+325 GS Acquisition Building Materials9/3/13 Pitney Bowes 1st Lien 215 9/18/13 L+625 @ 99 CSS Diversified Services9/3/13 Pitney Bowes 2nd Lien 100 9/18/13 L+1050 @ 09 CSS Diversified Services9/5/13 Nine Entertainment 1st Lien A$200 9/13/13 L + 325 @ 99.5 UBS Acquisition Entertainment9/5/13 Capsugel Add-On TL 100 UBS Acquisition Healthcare8/29/13 Steinway Musical 1st Lien 190 9/13/13 L+425 @ 99.5 BAML Buyout Music8/29/13 Steinway Musical 2nd Lien 100 9/13/13 L+850 @ 98 BAML Buyout Music8/27/13 Akorn TL 600 JPM Acquisition Healthcare/Hospitals8/5/13 Rue 21 TLB 533 8/14/13 L+450-475 @ 99 JPM Buyout Retail

Leveraged Loan Forward caLendar

and probability of default ratings. S&P rated the bonds B+ and gave the company a B+ corporate credit rating.

Michael Baker International is on the market with a $350 million junk bond offering. Proceeds will be used to back an acquisition. The Pittsburgh-based en-gineering and construction services firm plans to use the proceeds from the senior secured notes due 2018 to help finance its $369.9 million acquisition by DC Capi-tal Partners affiliate Integrated Mission Solutions. The companies agreed to the acquisition in late July and ex-pect the deal to be closed in the fourth quarter. Jeffer-ies is the sole bookrunner. The bonds will be registered with the Securities and Exchange Commission and have a two and a half year non-call period. S&P rates the company B+.

PEOPLE NEWSInvestment bank Houlihan Lokey added two manag-

ing directors to its New York office. Anthony Martino and Gregg Newman have been hired by Houlihan Lokey’s capi-tal markets group and will join in early November. Both Martino and Newman were most recently coheads of the alternative capital markets group at Sagent Advisors. Prior to Sagent, they were coheads of the alternative capital mar-kets group at UBS. The addition of two managing directors brings the firm’s capital markets group to six managing directors and 14 officers. Houlihan Lokey Co-President Scott Adelson said the firm now has one of the largest pri-vate capital markets platforms in the U.S. The firm made some personnel changes in April as it reorganized its senior management. Houlihan Lokey focuses on advising transac-tions valued under $3 billion. It has offices in the U.S., Asia and Europe.

Market Buzzcontinued from page 3


LFN 10-07-13 LFN_7 7 10/3/2013 6:17:42 PM


Issue Date Issuer

10/01/13 Emma10/01/13 Emma10/01/13 Stackpole09/27/13 Caesars 09/27/13 Caesars 09/27/13 Forum 09/27/13 Howard09/27/13 Allegion 09/27/13 Yuzhou 09/26/13 Artesyn09/26/13 Avanti09/26/13 Gannett 09/26/13 Gannett 09/26/13 MEG09/26/13 Sinclair 09/26/13 Titan09/26/13 Clayton 09/25/13 Country 09/25/13 Plastipak 09/25/13 SNF09/25/13 Veneto 09/24/13 The 09/24/13 Abengoa09/24/13 Aspial09/24/13 Aviation 09/24/13 CPG 09/24/13 General 09/24/13 General

Most Recent closed U.s. leveRaged loansClose Date Borrower Facility Amount Tranche Loan Type Maturity All Agents ($ mil) Amount ($ mil)

10/01/13 Penton Media Inc 720.0 460.0 Mult Loan Fac 10/01/19 CS/BOA-MERRILL/ GECC/MACQUARIE10/01/13 Penton Media Inc 720.0 205.0 Mult Loan Fac 09/27/20 CS/BOA-MERRILL/ GECC/MACQUARIE10/01/13 Penton Media Inc 720.0 50.0 Mult Loan Fac 10/01/18 CS/BOA-MERRILL/ GECC/MACQUARIE09/30/13 Safe Fleet Acquisition Corp 200.0 30.0 RevCred/Term Ln 09/30/18 BNP-PARIBAS09/30/13 Safe Fleet Acquisition Corp 200.0 122.0 RevCred/Term Ln 09/30/19 BNP-PARIBAS09/30/13 TMS International Corp 875.0 300.0 Mult Loan Fac n/a GS/JPM09/30/13 TMS International Corp 875.0 175.0 Mult Loan Fac 09/30/18 GS/JPM09/30/13 TMS International Corp 875.0 400.0 Mult Loan Fac 10/30/20 GS/JPM09/30/13 Natel Engineering Co Inc 160.0 60.0 RevCred/Term Ln 09/30/18 UNION-BANK-NA/ US-BANK-NA09/30/13 Natel Engineering Co Inc 160.0 100.0 RevCred/Term Ln 09/30/18 UNION-BANK-NA/ US-BANK-NA09/30/13 Springleaf Finance Corp 250.0 750.0 Term Loan B 09/30/19 BOA09/30/13 Jordan Health Services Inc 122.5 87.5 RevCred/Term Ln 09/30/18 CIT-GROUP/ALLY-COMM-FIN/ BBVA/F-M-BK09/30/13 Jordan Health Services Inc 122.5 25.0 RevCred/Term Ln 09/30/18 CIT-GROUP/ALLY-COMM-FIN/ BBVA/F-M-BK09/30/13 Jordan Health Services Inc 122.5 10.0 RevCred/Term Ln 09/30/18 CIT-GROUP/ALLY-COMM-FIN/ BBVA/F-M-BK09/30/13 Capital Brands LLC 115.0 40.0 RevCred/Term Ln 09/30/18 JPM/US-BANK-NA09/30/13 Capital Brands LLC 115.0 75.0 RevCred/Term Ln 09/30/18 JPM/US-BANK-NA09/30/13 AxelaCare Health Solutions 114.4 99.4 RevCred/TLA 04/11/19 BANK-MONTREAL/ FIFTH-THIRD-BK/GECC09/30/13 AxelaCare Health Solutions 114.4 15.0 RevCred/TLA 04/11/18 BANK-MONTREAL/ FIFTH-THIRD-BK/GECC09/30/13 Digital-PR Venture 185.0 185.0 Rev Cred Fac 09/30/18 SUNTRUST-BK/US-BANK-NA09/30/13 Ole Media Management LP 135.0 100.0 RevCred/Term Ln 09/30/18 JPM/SUN-TRUST-BK/ CIT-GROUP/FIFTH-THIRD-BK09/30/13 Ole Media Management LP 135.0 35.0 RevCred/Term Ln 09/30/18 JPM/SUN-TRUST-BK/ CIT-GROUP/FIFTH-THIRD-BK09/30/13 Southern Wine & Spirits of 2,650.0 1,650.0 RevCred/TLA 09/30/18 BOA/SUN-TRUST-BK/JPM/ HSBC/WF/BTM-UFJ/COBANK/ RABOBANK/ SUMITOMO-MITSUI/ US-BANK-NA09/30/13 Southern Wine & Spirits of 2,650.0 1,000.0 RevCred/TLA 09/30/18 BOA/SUN-TRUST-BK/JPM/ HSBC/WF/BTM-UFJ/COBANK/ RABOBANK/ SUMITOMO-MITSUI/ US-BANK-NA09/30/13 Tenet Healthcare Corp 4,600.0 2,800.0 Mult Loan Fac 09/30/14 BOA-MERRILL/BARCLAYS/ CITI/WF/SCOTIABANK/ MS/SUNTRUST-BK09/30/13 TriMas Corp 650.0 175.0 RevCred/TLA 09/30/18 BOA/JPM/WF09/30/13 TriMas Corp 650.0 475.0 RevCred/TLA 09/30/18 BOA/JPM/WF09/30/13 Wellcare Health Plans Inc 200.0 200.0 Rev Cred Fac 09/30/18 JPM/SUNTRUST-BK09/30/13 American CyberSystems Inc 100.0 70.0 RevCred/Term Ln 09/30/17 FIFTH-THIRD-BK09/30/13 American CyberSystems Inc 100.0 30.0 RevCred/Term Ln 09/30/17 FIFTH-THIRD-BK09/30/13 Gander Mountain Co 50.0 50.0 Rev Cred Fac 08/09/18 BOA/US-BANK/WF/RBS09/30/13 GA Telesis LLC 50.0 50.0 Rev Cred Fac 10/18/15 PNC-BANK-CORP09/30/13 Tectum Holdings Inc 6.5 6.5 Term Loan B 11/16/15 MADISON-CAPITAL/GECC/ US-BANK-NA09/30/13 American Equity Investment 200.0 200.0 Rev Cred Fac 01/24/16 JPM/SUN-TRUST-BK/DB09/30/13 AmeriLife Group LLC 110.0 110.0 Rev Cred Fac 09/30/18 JPM09/30/13 Contango Oil & Gas Co 275.0 275.0 Rev Cred Fac 09/30/17 RBC/RBS09/30/13 FineLine Technologies, Inc. 13.0 13.0 Term Loan 05/07/17 NXT-CAP

Source: Thomson Reuters


LFN 10-07-13 LFN_8 8 10/3/2013 5:59:39 PM



Issue Principal Moody Standard &Date Issuer Am ($mm) Currency Coupon % Maturity Rating Poor’s Rating Bookrunner(s)

10/01/13 Emma Delta Finance plc 202.9 EUR 12.000 10/15/17 NR NR Jefferies10/01/13 Emma Delta Finance plc 338.1 EUR 8.500 10/15/17 NR NR Jefferies10/01/13 Stackpole International Ltd 360.0 US 7.750 10/15/21 B2 B+ Morgan Stanley, Nomura, RBC, UBS09/27/13 Caesars Entertainment Corp 1,150.0 US 11.000 10/01/21 Caa2 CCC+ Citi, BofAML, Credit Suisse, Deutsche Bank, JPMorgan, Goldman Sachs, Macquarie Bank, Morgan Stanley, UBS09/27/13 Caesars Entertainment Corp 1,000.0 US 8.000 10/01/20 B2 B Citi, BofAML, Credit Suisse, Deutsche Bank, JPMorgan, Goldman Sachs, Macquarie Bank, Morgan Stanley, UBS09/27/13 Forum Energy Technologies Inc 300.0 US 6.250 10/01/21 Ba3 BB JPMorgan, Wells Fargo, BofAML, Citi, Deutsche Bank, HSBC, Comerica Bank09/27/13 Howard Hughes Corp 750.0 US 6.875 10/01/21 Ba3 B Credit Suisse, JPMorgan, Wells Fargo09/27/13 Allegion US Holding Co Inc 300.0 US 5.750 11/15/21 Ba2 BB+ Goldman Sachs, JPMorgan, BNP Paribas Corp, BofAML, Citi, Credit Suisse09/27/13 Yuzhou Properties Co Ltd 300.0 US 8.750 10/04/18 B2 B BOC International Holdings, DBS Bank Ltd, Deutsche Bank, HSBC, JPMorgan, UBS09/26/13 Artesyn Technologies Inc 250.0 US 9.750 10/15/20 B3 B BofAML, Goldman Sachs09/26/13 Avanti Communications 370.0 US 10.000 10/01/19 Caa1 B Jefferies, UBS, Barclays09/26/13 Gannett Co Inc 600.0 US 5.125 10/15/19 Ba1 BB JPMorgan, Citi, Barclays, Mitsubishi UFJ Sec Intl Plc, Standard Chartered Cap Mkts, US Bancorp09/26/13 Gannett Co Inc 650.0 US 6.375 10/15/23 Ba1 BB JPMorgan, Citi, Barclays, Mitsubishi UFJ Sec Intl Plc, Standard Chartered Cap Mkts, US Bancorp09/26/13 MEG Energy Corp 800.0 US 7.000 09/30/18 B1 BB BMO, Credit Suisse (USA) Inc09/26/13 Sinclair Television Group Inc 350.0 US 6.375 11/01/16 B1 B Deutsche Bank, JPMorgan, SunTrust Robinson Humphrey09/26/13 Titan International Inc 400.0 US 6.875 10/01/20 B1 B+ Goldman Sachs, Jefferies09/26/13 Clayton Williams Energy Inc 250.0 US 7.750 04/01/19 B3 B- RBS, JPMorgan Mitsubishi UFJ Sec Intl Plc Wells Fargo Bank NA09/25/13 Country Garden Holdings Co Ltd 750.0 US 7.250 04/04/21 Ba2 BB- Goldman Sachs, JPMorgan, BOC International Holdings, Hongkong & Shanghai Bank (HK), Industrial mm Bank China09/25/13 Plastipak Holdings Inc 375.0 US 6.500 10/01/21 Caa1 B+ JPMorgan, Wells Fargo Bank NA, RBS, BofAML, Goldman Sachs, Key Banc09/25/13 SNF Floerger Group 250.0 US 6.000 11/15/22 Ba3 BB+ BofAML, BNP Paribas SA09/25/13 Veneto Banca Holding ScpA 405.7 EUR 4.250 01/18/16 NR BB Banca IMI, Deutsche Bank, Natixis, Nomura International PLC09/24/13 The ADT Corp 1,000.0 US 6.250 10/15/21 Ba2 BB- Goldman Sachs, Morgan Stanley , Deutsche Bank, Citi09/24/13 Abengoa Finance SAU 336.8 EUR 8.875 02/05/18 B2 B Citi, Morgan Stanley09/24/13 Aspial Corp Ltd 19.9 SG 5.000 07/22/16 NR NR DBS Bank Ltd09/24/13 Aviation Capital Group Corp 600.0 US 3.875 09/27/16 NR BB+ BNP Paribas SA, Citi, Credit Suisse, UBS, Barclays09/24/13 CPG International Inc 315.0 US 8.000 10/01/21 Caa2 CCC+ JPMorgan, Barclays PLC, Deutsche Bank Corp, Citi, RBS, UBS09/24/13 General Motors Co 1,500.0 US 3.500 10/02/18 Ba1 BB+ Citi, BofAML, JPMorgan, Morgan Stanley, BNP Paribas SA, UBS, RBS09/24/13 General Motors Co 1,500.0 US 4.875 10/02/23 Ba1 BB+ Citi, JPMorgan, BofAML, Morgan Stanley, BNP Paribas SA, RBS, UBS

Most Recent coMpleted HigH Yield deals


Ln 09/30/18 CIT-GROUP/ALLY-COMM-FIN/



FIFTH-THIRD-BK/GECC

FIFTH-THIRD-BK/GECCFac 09/30/18 SUNTRUST-BK/US-BANK-NA

Ln 09/30/18 JPM/SUN-TRUST-BK/CIT-GROUP/FIFTH-THIRD-BK

Ln 09/30/18 JPM/SUN-TRUST-BK/CIT-GROUP/FIFTH-THIRD-BK

1,650.0 RevCred/TLA 09/30/18 BOA/SUN-TRUST-BK/JPM/HSBC/WF/BTM-UFJ/COBANK/

SUMITOMO-MITSUI/

1,000.0 RevCred/TLA 09/30/18 BOA/SUN-TRUST-BK/JPM/HSBC/WF/BTM-UFJ/COBANK/

SUMITOMO-MITSUI/

Fac 09/30/14 BOA-MERRILL/BARCLAYS/CITI/WF/SCOTIABANK/

Fac 09/30/18 JPM/SUNTRUST-BK

Fac 08/09/18 BOA/US-BANK/WF/RBS

B 11/16/15 MADISON-CAPITAL/GECC/

Fac 01/24/16 JPM/SUN-TRUST-BK/DB


LFN 10-07-13 LFN_9 9 10/3/2013 5:59:23 PM

10 October 7, 2013 Copying without permission from SourceMedia LLC is unlawful.

Number of All High Yield Funds: 743 Lipper HI Curr Yld Bd IX: 4.22

Source: Lipper

HigH Yield Bond fund performance

Total Net 12/31/12Assets To 10/02/13 Lipper

Name Of Fund 09/30/13 ($ Mil’s) % Change Rank Leader

Highland:Flt Rt Opps;A 431.3 11.44 1 Y

Loomis Sayles:Inst HI;I 664.9 10.71 2 Y

Third Avenue:Foc Cr;Inst 933.1 10.55 3

Nuveen Sym HY Bd;A 32.5 10.45 4

Pioneer High Yld;A 1,129.8 9.33 5 Y

Aegis High Yield;I 59.4 8.91 6

Morg Stan I:High Yld;I 12.7 8.34 7

Peritus High Yield ETF 388.2 8.34 8

Federated Hi Yld Tr;Svc 448.9 8.15 9 Y

Rydex:Hi Yld Str;H 69.1 8.02 10 Y

Total Net 12/31/12Assets To 10/02/13 Lipper

Name Of Fund 09/30/13 ($ Mil’s) % Change Rank Leader

iShares:Gl exUSD HYCrpBd 44.6 7.90 11

Nomura:High Yld;I 47.8 7.60 12

J Hancock II:Hi Inc;NAV 573.7 7.54 13

Buffalo:High Yield 275.2 7.42 14

W&R Adv:High Income;A N/A 7.22 15 Y

J Hancock High Yield;A 365.2 7.06 16

MassMutual Prem:HY;Z 99.5 7.00 17

Ivy:High Income;A N/A 6.85 18 Y

Access One:Fx HY;Inv 27.2 6.33 19

Nuveen Sym Crdt Opp;I 332.5 6.14 20 Y

Leveraged Finance newsLeveraged Finance newsLeveraged Finance news

HigH Yield SecondarY gainerS & loSerS(as of 10/3/13)

— top gainers —Issuer Bond Price Change Yield Spread

9/25/13 10/2/13 9/25/13 10/2/13 10/2/13JC PENNEY CORP INC JCP 7.625 3/1/97 61.5000 68.9090 7.4090 12.40% 11.06% 733PECO ENERGY CAPITAL TRUST IV EXC 5.750 6/15/33 90.0500 95.3750 5.3250 6.66% 6.16% 242JC PENNEY CORP INC JCP 7.400 4/1/37 p 65.1500 69.3600 4.2100 11.81% 11.09% 736ADVANCED MICRO DEVICES INC AMD 7.750 8/1/20 c15 95.0750 99.2400 4.1650 8.72% 7.89% 527AMR CORP AMR 9.000 9/15/16 101.6060 105.7433 4.1373 8.37% 6.81% 620CAESARS ENTERTAINMENT OPERATING CZR 10.750 2/1/16 c13 84.3500 88.0000 3.6500 19.36% 17.22% 1661CENTENE CORP CNC 5.750 6/1/17 104.7740 108.3750 3.6010 4.33% 3.29% 192NCR CORP NCR 5.000 7/15/22 c17 93.8750 97.3750 3.5000 5.90% 5.38% 276COMMERCIAL METALS CO CMC 7.350 8/15/18 108.2500 111.7500 3.5000 5.40% 4.62% 323JC PENNEY CORP INC JCP 5.750 2/15/18 74.6980 78.0000 3.3020 13.61% 12.44% 1106CENTURYLINK INC CTL 6.000 4/1/17 107.6250 110.9250 3.3000 3.66% 2.69% 131CAESARS ENTERTAINMENT OPERATING CZR 12.750 4/15/18 c14 60.7320 64.0050 3.2730 28.76% 26.99% 2561

— top losers —Issuer Bond Price Change Yield Spread

9/25/13 10/2/13 9/25/13 10/2/13 10/2/13SPRINT COMMUNICATIONS INC S 11.500 11/15/21 134.0080 128.2323 -5.7757 6.12% 6.89% 427CIT GROUP INC CIT 6.000 4/1/36 97.7500 92.0060 -5.7440 6.19% 6.69% 298MOMENTIVE PERFORMANCE MATERIALS INC MOMENT 11.500 12/1/16 c13 78.3300 72.6870 -5.6430 21.20% 24.39% 2378COMMUNITY CHOICE FINANCIAL INC COMMCH 10.750 5/1/19 c13 92.2500 86.8400 -5.4100 12.72% 14.25% 1286TOYS “R” US INC TOY 7.375 10/15/18 89.9781 84.7500 -5.2281 9.95% 11.45% 1007ACCELLENT INC ACCINC 10.000 11/1/17 c13 98.6810 93.5000 -5.1810 10.40% 12.06% 1068MBIA INC MBI 7.000 12/15/25 98.6850 93.8820 -4.8030 7.16% 7.78% 517MASCO CORP MAS 5.850 3/15/17 111.2230 106.4500 -4.7730 2.45% 3.83% 245RADIATION THERAPY SERVICES INC RTSX 8.875 1/15/17 c14 103.7500 99.0700 -4.6800 7.27% 9.21% 783COOPER TIRE & RUBBER CO CTBUS 7.625 3/15/27 100.8750 96.2500 -4.6250 7.52% 8.09% 547WINDSTREAM CORP WIN 7.500 4/1/23 c16 103.0200 98.5000 -4.5200 6.83% 7.73% 510GLOBAL GEOPHYSICAL SERVICES INC GGS 10.500 5/1/17 c14 89.0720 84.6000 -4.4720 14.51% 16.36% 1497

Source: MarketAxess

Facility

Prisa 6/07

Gruppo

Eircom

Camaieu

KP1 (3/07)

Metrovacesa

Viridian

Selecta

Yell 11/09

Longview

Name

Nuveen

Invesco

Nuveen

Nuveen

Nuveen

Invesco

ING Prime

ING Senior

Invesco

Apollo

LFN 10-07-13 LFN_10 10 10/3/2013 5:59:26 PM

Copying without permission from SourceMedia LLC is unlawful. October 7, 2013 11

Source: Lipper

Assets To 10/02/13 Lipper09/30/13 ($ Mil’s) % Change Rank Leader

N/A 7.22 15 Y

N/A 6.85 18 Y

332.5 6.14 20 Y

Spread 9/25/13 10/2/13 9/25/13 10/2/13 10/2/13

JCP 7.625 3/1/97 61.5000 68.9090 7.4090 12.40% 11.06% 733PECO ENERGY CAPITAL TRUST IV EXC 5.750 6/15/33 90.0500 95.3750 5.3250 6.66% 6.16% 242

JCP 7.400 4/1/37 p 65.1500 69.3600 4.2100 11.81% 11.09% 736ADVANCED MICRO DEVICES INC AMD 7.750 8/1/20 c15 95.0750 99.2400 4.1650 8.72% 7.89% 527

AMR 9.000 9/15/16 101.6060 105.7433 4.1373 8.37% 6.81% 620CAESARS ENTERTAINMENT OPERATING CZR 10.750 2/1/16 c13 84.3500 88.0000 3.6500 19.36% 17.22% 1661

CNC 5.750 6/1/17 104.7740 108.3750 3.6010 4.33% 3.29% 192NCR 5.000 7/15/22 c17 93.8750 97.3750 3.5000 5.90% 5.38% 276

CMC 7.350 8/15/18 108.2500 111.7500 3.5000 5.40% 4.62% 323JCP 5.750 2/15/18 74.6980 78.0000 3.3020 13.61% 12.44% 1106CTL 6.000 4/1/17 107.6250 110.9250 3.3000 3.66% 2.69% 131

CAESARS ENTERTAINMENT OPERATING CZR 12.750 4/15/18 c14 60.7320 64.0050 3.2730 28.76% 26.99% 2561

Spread 9/25/13 10/2/13 9/25/13 10/2/13 10/2/13

SPRINT COMMUNICATIONS INC S 11.500 11/15/21 134.0080 128.2323 -5.7757 6.12% 6.89% 427CIT 6.000 4/1/36 97.7500 92.0060 -5.7440 6.19% 6.69% 298

MOMENTIVE PERFORMANCE MATERIALS INC MOMENT 11.500 12/1/16 c13 78.3300 72.6870 -5.6430 21.20% 24.39% 2378COMMUNITY CHOICE FINANCIAL INC COMMCH 10.750 5/1/19 c13 92.2500 86.8400 -5.4100 12.72% 14.25% 1286

TOY 7.375 10/15/18 89.9781 84.7500 -5.2281 9.95% 11.45% 1007ACCINC 10.000 11/1/17 c13 98.6810 93.5000 -5.1810 10.40% 12.06% 1068

MBI 7.000 12/15/25 98.6850 93.8820 -4.8030 7.16% 7.78% 517MAS 5.850 3/15/17 111.2230 106.4500 -4.7730 2.45% 3.83% 245

RADIATION THERAPY SERVICES INC RTSX 8.875 1/15/17 c14 103.7500 99.0700 -4.6800 7.27% 9.21% 783CTBUS 7.625 3/15/27 100.8750 96.2500 -4.6250 7.52% 8.09% 547WIN 7.500 4/1/23 c16 103.0200 98.5000 -4.5200 6.83% 7.73% 510

GLOBAL GEOPHYSICAL SERVICES INC GGS 10.500 5/1/17 c14 89.0720 84.6000 -4.4720 14.51% 16.36% 1497

Source: MarketAxess

Source: Markit

CLOSED END LOAN FUND PERFORMANCE

Source: Lipper

Loanbase Statistics — Syndicated U.S. Loans

Data distribution as of October 3, 2013 (in millions)

2010 2011 2012 2013

M All Leverage All Leverage All Leverage All Leverage

Q1 148,018 65,890 394,608 185,308 348,097 169,387 488,689 328,937

No. packages 446 262 776 452 830 512 878 667

Q2 329,275 137,068 587,481 248,304 413,706 169,367 591,529 342,273

No. packages 710 406 1,051 546 922 523 1,090 785

Q3 242,023 102,387 435,380 146,096 346,341 143,263 471,222 201,502

No. packages 659 318 945 493 839 477 944 598

Q4 379,122 166,027 481,535 147,556 489,004 249,991 715 715

No. packages 898 453 999 503 1,114 715 1 1

Total Dollars 1,098,438 471,373 1,899,003 727,263 1,597,149 732,008 1,552,155 873,427

Total Packages 2,713 1,439 3,771 1,994 3,705 2,227 2,913 2,051

Top 10 Dec l ine rsFacility Previous Current Percent

Bid Bid Change

Getty Images 10/12 Cov-Lite TLB 89.521 91.984 -2.68

PHS 7/07 (GBP) TLC 83.5 84.792 -1.52

Seat 8/12 TL 24.406 24.611 -0.83

Alpha Natural Resources 5/13 TLB 94.6 95.304 -0.74

Vivarte 3/07 (EUR) TLC1 89.722 90.361 -0.71

SuperMedia (Idearc) 12/09 TLB 77.292 77.821 -0.68

Autobar 10/12 (EUR) TLB4 90.058 90.646 -0.65

Toys ‘R’ Us (Cov-Lite 8/10) TLB1 97.018 97.464 -0.46

Boyd Gaming 8/13 Cov-Lite TLB 99.781 100.225 -0.44

99 Cents Only Stores (Cov-Lite 4/12) TL 100.05 100.424 -0.37

Top 10 AdvancersFacility Previous Current Percent

Bid Bid Change

Prisa 6/07 TLB 73.25 70 4.44

Gruppo Coin 6/11 (Gruppo Coin) B1A TLB 80.7 77.929 3.43

Eircom 6/12 New Strip (TL+Equity) TL 99.177 95.795 3.41

Camaieu (7/07) Tranche 1 TLb 75.65 73.625 2.68

KP1 (3/07) TLb 87.65 86.05 1.83

Metrovacesa 4/11 Facility B TL 43.2 42.667 1.23

Viridian 3/12 PIK (GBP) TL 90.7 89.6 1.21

Selecta 7/07 (EUR) TLB 91.821 90.75 1.17

Yell 11/09 (USD) TLB1 21.214 20.969 1.15

Longview Power 6/11 Non-Extended (2014) TLB 60.15 59.542 1.01

LOAN SECONDARY ADVANCERS AND DECLINERS(For the week ended October 3, 2013)

LEVERAGED FINANCE NEWS

Total Net 12/31/12 Assets To 10/01/13

Name Of Fund 9/30/13 ($ Mil’s) % Change Rank

Nuveen Float Rt Inc Opp 479.2 8.47 1

Invesco Dyn Cred Opps 986.8 7.98 2

Nuveen Credit Strat Inc 1,367.7 7.77 3

Nuveen Float Rate Inc 685.6 7.76 4

Nuveen Senior Income 285.8 7.73 5

Invesco Senior Income Tr N/A 7.08 6

ING Prime Rate Trust 887.7 6.96 7

ING Senior Income;A 355.7 6.58 8

Invesco Sr Loan;IB 829.8 6.51 9

Apollo Senior Float Rate 294.9 6.36 10

Total Net 12/31/12 Assets To 10/01/13

Name Of Fund 9/30/13 ($ Mil’s) % Change Rank

Nuveen Sht Dur Crdt Opp 199.6 6.33 11

BlackRock Flt Rt Inc 571.3 5.91 12

BlackRock Fltg Rate Inc 347.3 5.78 13

Blackstone/GSO LS Cr Inc 240.8 5.21 14

Eaton Vance Sen Flt-Rt 578.8 5.09 15

BlackRock Def Opp Credit 130.3 5.04 16

LMP Corporate Loan N/A 4.98 17

Eaton Vance Flt-Rt Inc 641.2 4.89 18

First Tr Sr Fltg RI II 397.8 4.78 19

Blackstone / GSO Strat 849.1 4.67 20

— Average % Change: 6.13 — — Number of Funds: 31—

LFN 10-07-13 LFN_11 11 10/3/2013 5:59:43 PM

11097_ASRScorecards_HouseAd_8.5x11_BW.indd 1 5/21/09 3:59:28 PMLFN 10-07-13 LFN_12 12 10/3/2013 5:59:39 PM

roller coaster third quarter for leveraged finance maxwell_lfn100713.pdf · roller coaster third...

Documents