AWAS flexes higher, revises call premiums; ILFC strengthens; Toys 'R' Us rises on IPO

By Sara Rosenberg

New York, May 28 - AWAS Aviation Capital Ltd. came out with a number of changes to its term loan to get the deal done, including increasing the spread, the Libor floor and the original issue discount, and sweetening call protection terms.

Meanwhile, over in the secondary market, International Lease Finance Corp.'s (ILFC) term loans moved higher, and Toys 'R' Us Inc.'s secured term loan B was better offered following news of an initial public offering.

AWAS tweaks pricing

AWAS made a round of revisions to its $530 million six-year term loan (Ba2/BBB-) that focused on spread, Libor floor and original issue discount, according to a market source.

Pricing on the term loan was lifted to Libor plus 575 basis points from initial talk of Libor plus 500 bps to 550 bps, the source said, which is not much of a surprise given that, recently, there had been some chatter that price talk could move to the Libor plus 575 bps to 600 bps area.

Also, the Libor floor on the term loan widened to 2% from 1.75%, another move that had been rumored by the market.

And, the original issue discount was increased to 97 from 98, the source continued, which again had been whispered unofficially prior to now.

AWAS sweetens call protection

Furthermore, as part of the changes, AWAS adjusted the call protection on its term loan to non-callable for one year, then at 102 in year two and par thereafter, the source remarked. By comparison, at launch the loan was being talked with 101 soft call protection for one year.

The source went on to say that there appears to be a sufficient amount of interest in the loan at the new terms for syndication to be successful.

Goldman Sachs and Credit Agricole are the joint lead arrangers on the deal that is hoped to allocate around middle of the May 31 week and close by the end of that week.

Security for the loan is interests in a portfolio of 30 aircraft.

Proceeds will be used to refinance the Dublin-based aircraft leasing company's outstanding JetStream and JetBridge loan facilities covering this collateral pool.

AWAS pricing swayed by ILFC

The source explained that one of the main reasons for the AWAS changes is because of the way ILFC's term loans have been moving in the secondary market, being that Los Angeles-based ILFC is also an aircraft leasing company

"This was very sensitive to where ILFC was trading and that moved down a lot over [the past few weeks]," the source said.

The reason for the downturn in ILFC, according to the source, was just the general weakness in the secondary market, and levels on the company's term loans recovered a little on Thursday with the rest of the market.

ILFC terms loans trade up

It turns out that ILFC's term loans gained some more ground in trading on Friday as well, according to traders.

The two term loans were quoted by traders at 98 bid, 99 offered, up from 97¾ bid, 98¾ offered at the close on Thursday.

The debt is comprised of a $750 million senior secured term loan (Ba2/BBB/BBB-) priced at Libor plus 475 bps and a $550 million six-year term loan priced at Libor plus 500 bps.

Both terms loans include a 2% Libor floor and were sold at an original issue discount of 98.

ILFC obtained the two term loans a few months ago to refinance existing debt.

Toys 'R' Us better with IPO

Levels on Toys 'R' Us' secured term loan B were stronger on Friday after the company announced plans for an initial public offering of common stock, according to traders.

The secured term loan B was quoted by one trader at 98½ bid, 99½ offered, up from 98 bid, 99 offered. A second trader, however, just had levels on the debt widening out to 98 bid, par offered, from 98 bid, 99 offered on Thursday.

Meanwhile, the second trader also saw wider levels on the unsecured term loan, but not in a favorable way. This tranche was quoted at 97 bid, 99 offered, compared to 98 bid, 99 offered previously, the trader remarked. The first trader did not see any levels on this debt.

Proceeds from the initial public offering will be used primarily to repay certain existing debt and for general corporate purposes.

Toys 'R' Us is a Wayne, N.J.-based specialty retailer of toys and juvenile products.

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