“Demand for loans has been very strong this year and hence the ability to get dividend deals done,” Adam Richmond, a credit strategist at Morgan Stanley in New York, said in a telephone interview. “The cost of debt is cheap making it an optimal time for companies to issue debt.”

Investors have poured about $26.2 billion into funds that purchase bank loans this year through May 23, according to Bank of America. Fed Chairman Ben S. Bernanke told U.S. lawmakers May 22 the central bank could taper its $85 billion monthly bond purchase program designed to spur growth and lower unemployment if it can be confident of sustained gains in the economy.

“From a timing perspective, there may be incentive to get debt deals done now ahead of the typical summer slowdown and ahead of any tapering of bond purchases by the Fed, which could lead to rising rates,” Richmond said.

Beats Electronics

Dividend transactions, which fund payouts to owners and increase leverage without enlarging the asset base supporting the debt, “weaken credit quality,” Moody’s analysts led by David Keisman in New York wrote in a May 1 report.

The U.S. speculative-grade default rate rose to 3.1 percent in April from 3 percent the prior month, according to Moody’s.

While Moody’s Liquidity-Stress Index rose to 3.2 percent in mid-May from a record-low 2.8 percent at the end of April, most U.S. speculative grade companies have enough liquidity to withstand “tepid” growth in revenue and a sluggish economy, analysts led by Tom Marshella wrote in a May 15 report.

Barclays Plc, Citigroup Inc., and JPMorgan are arranging a $500 million term loan and $200 million line of credit for Santa Monica, California-based Beats Electronics, Bloomberg data show. The company obtained a $225 million term loan last July for working capital, Bloomberg data show.

Air Medical

Onex’s Carestream Health Inc., a provider of medical supplies, may pay interest at 3.25 percentage points to 3.5 percentage points more than the London interbank offered rate on a $1.85 billion, first-lien term loan due in six years and at 7.5 percentage points more than Libor on a $500 million second- lien portion maturing in 6.5 years, Bloomberg data show.