Waldo’s Heard Flexed Up

Waldo’s, the Mexican low-end retailer, is heard to have flexed up the price on a $120m loan in the wake of a generalized re-targeting of yield requirements by banks lending to highly leveraged borrowers. For the $70m 5-year A-tranche the company is now offering Libor plus 450bp, from a previously announced 400bp, say bankers away from the deal. For the $50m 7-year B-tranche, the margin has moved to Libor plus 750bp, from 650bp. Flexing is relatively rare for the Latin market and typically lambasted by bankers not actually leading a loan that has price changes after going to market. However, there seems to be increasing support for price adjustment – common in the US loans market – especially during times of market stress. The up-front fee is heard to be at 100bp and Citi is leading. Bankers close to the deal said the Waldo’s now has $95m in commitments and that the deal is moving along well.