The company chose loans over issuing new bonds as “the term loan has a more favorable call structure, which gives us maximum flexibility in our capital structure,” Susan Henderson, a spokeswoman for Camp Hill, Pennsylvania-based Rite Aid said in an e-mail.
Stephanie Walter, a spokeswoman for Denver-based Atkins Nutritional declined to comment on the company’s financing.
The less liquid securities usually sold in smaller portions than junk bonds are benefiting from low default rate expectations and as investors turn to debt that stands to gain during a period of rising interest rates.
“The demand side of the market remains very strong,” Invesco’s Baskind said. “More issuance of second-lien debt is a natural evolution of the supply-demand imbalance.”