CamelBak Products’ second-lien bank debt plunged 20 points on talk the company has posted bad financial results. Its second-lien bank debt fell to the low 80s, while its first-lien bank debt fell 12 points to 88. One banker said he had seen the second lien quoted as low as 70.
CamelBak’s financial loss could not be learned by press time, but a banker said there was softness in the company’s revenues. This was partly owing to a drop in orders from the military, its largest customer. A trader said the numbers were supposedly poor, but said he did not know the exact financial loss because it is private information.
A banker estimated $8-10 million of first lien paper exchanged hands. He said selling was triggered by one holder selling a chunk of debt, which drove other to sell. Another banker said the number of trades was low because only a few banks trade the debt, which led to a large bid-ask spread. He said it is possible the company will trip covenants because of the bad results, adding that it has yet to publicize its financial results for March. The company releases monthly financial statements.
CamelBak makes hands-free hydration systems. Bear Stearns Merchant Banking, the private equity arm of Bear Stearns, owns the company. BNP Paribas leads the bank deal, which was reworked earlier this year. Leverage ratios were reset and its private equity sponsor added new equity, according to a banker.
The reworked deal consists of a $100 million term loan priced at LIBOR plus 3 3/4% and a $37 million second lien, priced at LIBOR plus 7-7 1/2%. A spokeswoman for Bear Stearns Merchant Banking did not return calls. Calls to Joe Brunetti, cfo, were also not returned.