Borrowers have had to sweeten terms on their leveraged loans in order to entice investors in a crowded market. Issuers have added approximately US$35bn of deals into the October pipeline, meaning loans tied to struggling businesses or facing sector challenges must find a way to compete for money. "At one point this week there were fifty deals in the market. When you have that type of opportunity set, naturally there will some credits that face pushback," an investor said. Pet supplies retailer PETMATE, led by BMO, widened the margin on a US$525m first-lien term loan that funds the company's buyout by private equity sponsor Platinum Equity. Petmate will then merge with peer Cosmic and be combined into a single entity. The seven-year loan firmed at 550bp over Libor with a 0.75% floor, wider than initial guidance of 475bp-500bp with a 0.5% floor. The 99 OID was unchanged.
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