PIMCO's Gross says LBO debt not cheap enough-CNBC

NEW YORK, Jan 30 (Reuters) - The manager of the world's biggest bond fund said on Wednesday that discounts on a backlog of leveraged buyout debt are not yet big enough to tempt him to bargain-hunt in the securities.

Speaking on CNBC television, Bill Gross, chief investment officer of bond fund management company Pacific Investment Management Co., or PIMCO, said underwriters are continuing to expect prices of 96 to 97 cents on the dollar for leveraged buyout debt, "and these loans have to be dropped to the low 90s or high 80s."

Asked if it was a good time to try to buy some of the debt on the cheap, Gross said, "not yet."

Wall Street banks are holding an estimated $230 billion backlog of high-yield bonds and loans they have been unable to sell since a global credit crunch last summer dried up demand for riskier debt.

Underwriters on Wednesday pulled a $2.2 billion loan they were trying to syndicate for computer retailer CDW Corp when they failed to draw buyers with a 96 cents-on-the-dollar discount, according to Reuters Loan Pricing Corp. The deal floundered even though underwriters were willing to boost the discount to the low 90s, potential investors said.

Bankers on Wednesday also revised the discount on a loan for Dana Corp's DCNAQ.PK bankruptcy exit to 92 cents on the dollar from 97 cents, sources told Reuters LPC. (Reporting by Dena Aubin, Editing by Chizu Nomiyama)