Berry moves up commitment deadline; loans unchanged in ultra-thin holiday trading

By Paul A. Harris

Portland, Ore., Sept. 14 – Cash loans were unchanged in ultra-thin holiday trading on Monday, as numerous participants were away from their desks to celebrate the opening day of Rosh Hashanah, according to a trader.

The LCDX 22 bank loan index was also unchanged at 100 7/8 bid, 101 7/8 offered, according to a hedge fund manager.

Primary market activity was also muted.

Berry Plastics Corp. LLC moved up the deadline on its $1.9 billion first-lien term loan (Ba3/BB-) to 5 p.m. ET Tuesday.

The previous timeline had the deal in the market until Sept. 22.

Although the dedicated bank loan funds have seen steady outflows, bank loans are the top-performer among the main asset classes, a bank loan portfolio manager said on Monday.

Loans returned 2.27% during the year to last Friday, the manager said, referring to the Standard & Poor’s loan index.

Double B rated loans, having returned 3.6% year-to-date, have done even better.

The double B sector was badly beaten up early in the year, in the risk-off trade that accompanied market volatility related to the phenomenal fall in oil prices, the manager explained.

Outflows from the bank loan funds have been consistent, and not tiny, the manager said.

That money should be shifting away from bank loans is somewhat counter-intuitive, the manager admitted. Given the volatility in the global capital markets, bank loans, which are mostly secured, should seem relatively safe.

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