Coal firm Murray Energy became the latest commodity issuer to face a pushback in the leveraged finance market as it looked to raise US $3.8bn to finance its planned acquisition of a majority stake in Foresight Energy and to refinance existing debt. Murray is yet to price a US $1.55bn dual-tranche bond financing that was due to be printed last Thursday.
Last Thursday, the bonds had an official price talk of 10.25%-10.50% on a five-year bond and 10.75%-11.00% on an eight-year tranche, in line with whispers of 10.5% area and 11% area.
Since the whisper stage, the company has also made several changes to covenants but all this does not seem to be enough to woo investors, some of whom now want to be paid 11%-12%, market sources said.
"What was 10.5%-11% is being talked wider with the loan expected to clear wide of 8%," said one high-yield investor.
A US $1.6bn term loan being raised by Murray is guided at Libor plus 575bp with a 1% floor and a discount of 98, while another US $625m term loan for Foresight is guided at Libor plus 475bp with a 1% floor and a 99 discount. Commitments were due April 1.
The company declined to comment on the status of the loan pricing, but Murray is expected to put out a statement later in the day, banking sources said.
Books on the two-part senior secured deal were heard only two-thirds covered as of Thursday, a buyside source told IFR.
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