U.S. Renal, Quebecor Seek Loans With Prices at Two-Month High

Quebecor Media Inc. and U.S. Renal Care Inc. are raising money in the leveraged-loan market, where prices of the debt are at the highest since May.

Quebecor Media, a Canadian newspaper publisher and cable operator, is seeking a $300 million loan for general corporate purposes. U.S. Renal, an outpatient treatment center operator for chronic kidney failure, is asking lenders for $495 million of loans to finance its acquisition of Ambulatory Services of America Inc.

Companies are turning to junk loans as prices of the floating-rate debt ended an 11-day streak of increases at 98.39 cents on the dollar, according to the Standard & Poor’s/LSTA U.S. Leveraged Loan 100 index. Prices were little changed from 98.4 cents yesterday.

U.S. Renal’s financing, led by Barclays Plc., consists of $335 million of first-lien bank debt that would pay interest at 4.5 percentage points to 4.75 percentage points more than the London interbank offered rate, and a $160 million second-lien piece with a rate of 8 percentage points more than the lending benchmark. Libor would have a 1 percent floor.

The company proposed selling both pieces of the debt at a discount of 98 cents on the dollar, according to a person with knowledge of the transaction, who asked not to be identified because the deal is private.

Quebecor’s loan would have an interest rate of 2.75 percentage points more than Libor, with a 0.75 percent floor on the lending benchmark, according to a person with knowledge of the transaction, who asked not to be identified because the deal is private.

Covenant-Light

Citigroup Inc., Royal Bank of Canada and Bank of Nova Scotia (BNS) are arranging the loan, which will be covenant-light loan, meaning it will lack financial-maintenance requirements designed to protect investors, according to the person.

Sun Media Corp., a unit of Quebecor, said last week that it’s closing 11 newspapers and cutting 360 jobs to save C$55 million ($53.3 million) a year, as print revenue continues to fall and more of the industry shifts to digital.

Quebecor may sell the proposed loan to investors at a discount of 99.5 cents on the dollar, the person with knowledge of the deal said. Discounts reduce proceeds for the borrower while boosting yield for investors.

Springer Science & Business Media GmbH reduced the discount on covenant-light loans the German academic publisher is seeking to back its buyout by BC Partners Ltd.

Carlyle CLO

A $1.59 billion loan and a 615 million-euro ($812 million) portion is being sold to lenders at a discount of 96.5 cents, compared with 96 cents originally proposed, according to a person with knowledge of the transaction, who asked not to be identified because terms are private.

Carlyle Group LP (CG) is planning to raise a 299 million-euro collateralized loan obligation, its second European CLO this year, according to a person with knowledge of the matter, who asked not to be identified because the deal is private.

CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

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

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