Capital Automotive, Apria Healthcare Seeking Refinancing Loans

Capital Automotive LP and Apria Healthcare Group Inc. are among companies seeking loans to refinance debt as borrowing costs remain at historic lows.

Capital Automotive is seeking a $1.5 billion term loan that will pay interest at 3.25 percentage points more than the London interbank offered rate, with a 1 percent minimum on the lending benchmark, according to a person with knowledge of the matter. Apria is seeking a $750 million credit that will pay interest at 4.5 percentage points more than Libor, with a 1.25 percent floor to refinance 11.25 percent bonds, said another person with knowledge of that deal.

The U.S. Federal Reserve left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent, according to minutes from the Federal Open Market Committee today. Spreads on first- lien new-issue loans sold to non-bank lenders dropped to 3.78 percentage points at the end of February from 4.43 percentage points the prior year, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.

WorldPay Ltd., the credit-card processor owned by Advent International Corp. and Bain Capital LLC, is seeking 700 million pounds ($1.1 billion) of loans to fund a dividend and repay a mezzanine facility, according to an e-mailed statement from banks arranging the deal.

The financing is being arranged by Goldman Sachs Group Inc., Morgan Stanley and Royal Bank of Scotland, the banks said. Meetings with lenders will take place in New York on March 21 and London on March 22, they said.

European Defaults

European companies are poised to default in greater numbers as high-risk borrowers may face greater difficulty refinancing debt, according to Fitch Ratings. Of the approximately 280 leveraged credits rated by Fitch, 23 percent are considered “at risk,” the firm wrote in a report.

Orbitz Worldwide Inc. (OWW), the global online travel-reservation firm, obtained $450 million in loans to refinance debt. A $150 million portion due in 4 1/2 years pays interest at 6 percentage points more than Libor, while a $300 million slice due in six years pays 6.75 percentage points more than the lending benchmark.

Utex Industries Inc. is seeking $490 million in loans and will host a lender meeting on March 22 at 10 a.m. in New York, according to a person with knowledge of the matter. The specialty products maker being acquired by Riverstone Holdings LLC from investments funds affiliated with Rhone Capital LLC is seeking a $50 million, five-year revolver, a $300 million, first-lien term loan due in seven years and a $140 million, eight-year second-lien credit, said the person, who asked not to be identified because the deal is private.

Leveraged loan prices rose 0.04 cent today to 98.19 cents on the dollar, the highest since July 22, 2007, according to the S&P/LSTA U.S. Leveraged Loan 100 Index. The debt has returned 1.84 percent this year.

With assistance from Stephen Morris and Patricia Kuo in London.

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.

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