Ikaria Acquisition Inc. increased the rate on $850 million in financing it’s seeking to pay a dividend and refinance debt as prices of leveraged loans dropped the most this year.
The biotherapeutics company will pay interest at 6 percentage points more than the London interbank offered rate with a 1.25 percent floor on the lending benchmark on a now-$525 million first-lien piece, down from $550 million, compared with 5.25 percentage points more than Libor with a 1 percent minimum initially proposed, according to a person with knowledge of the transaction. A $325 million second-lien portion, increased from $300 million, will now pay interest at 9.75 percentage points more than Libor with a 1.25 percent minimum, compared with 9.25 percentage points more than the lending benchmark, with a 1 percent minimum.
Investors are demanding more yield from borrowers as loan prices decline to near-six-month lows on June 28. The Standard & Poor’s/LSTA Leveraged Loan 100 Index fell 0.44 cents last week, to $97.13, the biggest weekly drop so far this year and the lowest since Jan. 7.
Tribune Co. (TRBAA:US) received committed financing of as much as $4.1 billion for its acquisition of 19 television stations from Local TV Holdings LLC for $2.73 billion, the biggest U.S. broadcasting deal in six years. JPMorgan, Bank of America Corp., Citigroup Inc., Deutsche Bank AG and Credit Suisse Group AG are arranging the debt, which includes a new $300 million revolving credit facility and the capacity to allow Tribune to refinance its existing debt, according to a statement distributed today via PR Newswire.
Private-equity firm Kohlberg & Co. agreed to buy Steinway Musical Instruments Inc. (LVB:US) for $438 million, according to a statement today. The agreement includes a 45-day period in which Waltham, Massachusetts-based Steinway can solicit other proposals.
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