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Utex Cuts Loan Rate; Playboy Seeks $185 Million Refinancing

Utex Industries Inc. cut the rate and discount on a $490 million acquisition loan while Playboy Enterprises Inc. seeks $185 million to refinance debt and avert a covenant breach as prices of floating-rate debt hold near five-year highs.

Utex, a maker of sealing and specialty products, will pay interest at 3.5 percentage points more than the London interbank offered rate, with a 1.25 percent minimum on the lending benchmark on a $300 million first-lien portion, said the person, who asked not to be identified because the deal is private. Utex had proposed initially to pay interest at 3.75 percentage points to 4 percentage points more than Libor.

A $140 million, second-lien piece will pay interest at 7.5 percentage points more than Libor, with a 1.25 percent minimum, compared with 7.75 percentage points initially proposed, the person said.

Utex will sell both pieces of the debt at 99.5 cents on the dollar, the person said, compared with 99 cents and 98 cents on the respective first- and second-lien portions.

Playboy is proposing to pay interest at 6 percentage points more than Libor with a 1.5 percent floor while eliminating a requirement that it generate a minimum amount of earnings before interest, tax, depreciation and amortization, according to a report today from Standard & Poor’s.

Investors poured $900 million into U.S. loan mutual funds this week, extending the stretch of weekly inflows that has lasted for almost a year, according to Bank of America Corp. The funds added 21 percent in net assets this year.

High Price

Loan prices fell 0.2 cent today, to 98.33 cents on the dollar, according to the S&P/LSTA U.S. Leveraged Loan 100 index. The debt is hovering near the highest level since July 2007.

Tower International Inc., a maker of metal components for the automotive industry, increased a loan it’s seeking to refinance bonds to $420 million from $275 million, according to a person with knowledge of the matter. U.S. Shipping Corp., a provider of long-haul marine transportation services, will pay interest at 7.75 percentage points more than Libor, with a 1.25 percent minimum on a $220 million loan it’s seeking to refinance debt, according to a person with knowledge of the transaction, who asked not to be identified because terms are private.

KKR & Co.’s Dutch retailer Maxeda BV is seeking to extend its 640 million euros ($833 million) of loans by as much as two year and amend some of its covenants, according to three people with knowledge of the matter.

Wireless infrastructure owner and operator Crown Castle International Corp. will host a lender call on April 8 at 11 a.m. in New York, according to a person with knowledge of the matter.

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