Leveraged Loan Insight & Analysis – 1/26/2015

After a slow start, flex activity reactivated in the institutional loan market last week. So far in January, upward priced flexes on first-lien institutional term loans are outnumbering downward price revisions by over two times. The trend of the last few months in which stronger deals have garnered much investor attention, while weaker credits have to make some concessions to lure investors, seems to have trickled into this year. ANGUS Chemical Company, for instance, reduced pricing on both the euro and dollar portions of its $570 million buyout credit. Pricing on both tranches of the term loan was reduced to LIB/Euribor+425 with a 1 percent floor at 99.5 OID from 450bp with a 1 percent floor at 99 OID. On the other end of the spectrum IPC Systems widened pricing to LIB+550 from LIB+475 on its first-lien term loan and to LIB+950 from LIB+850 on its second-lien term loan. The OIDs were also widened to 97 from 99 on the first-lien and to 95.5 to 98.5 on the second-lien. All in all, yields are up so far this year. The average yield, assuming a three-year term to repayment is 6.52 percent so far in January, up from 6.11 percent in December. Underliers