CeramTec Cuts Rates on Deal; Loan Funds Get $2.1 Billion Inflow

CeramTec GmbH cut the rate on about $860 million in acquisition loans while funds that purchase the bank debt took in a record $2.1 billion of inflows for the week amid unprecedented demand for floating-rate assets.

Rockwood Holding Inc’s CeramTec unit reduced the rate on a $430 million term loan to 3.5 percentage points more than the London interbank offered rate, down from 4 percentage points to 4.25 percentage points initially proposed, according to a person with knowledge of the transaction. A 324 million euro ($430.11 million) portion will pay interest at 4 percentage points more than the lending benchmark, compared with 4.25 percentage points to 4.5 percentage points previously proposed, said the person, who asked not to be identified because the terms are private.

Both seven-year loans will be offered to lenders at 99.5 cents on the dollar, compared with 99 cents initially offered, the person. Proceeds support the acquisition of the German ceramics producer by Cinven from Rockwood.

This week’s inflows to loan funds bring deposits for the year to more than $40 billion, the fastest growing segment among various asset classes, according to a report published yesterday by Bank of America Corp.

Prices on the largest, first-lien floating-rate borrowings dropped 0.05 cent today to 98.29 cents on the dollar, according to the Standard & Poor’s LSTA Leveraged Loan 100 Index.

Tower Automotive Holdings Inc. obtained a $418.5 million term loan due in seven years that pays interest at 3.75 percentage points more than Libor with a 1 percent minimum on the lending benchmark, according to a person familiar with the deal. The loan was sold to investors at par.

Electronic component manufacturer Photonis USA Inc. will meet with lenders on July 30 at 2:30 p.m. in New York to discuss $325 million in loans to refinance debt, said a person with knowledge of the matter.

A $260 million first-lien will pay interest at 5 percentage points more than Libor while a $65 million second-lien portion will pay interest at 9 percentage points more than the lending benchmark, the person said. Both pieces will have a 1 percent minimum.

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