The multi-currency deal, which was marketed to U.S. and European accounts, is split between a $1.9 billion term loan, a 525 million euro-denominated term loan and a $400 million revolving credit.

The seven-year U.S. dollar term loan cleared the market at LIB+325 with a 1 percent Libor floor and sold at an original issue discount of 99.5. It traded up to 100.75-101.25 on the break.

During syndication, the Libor spread was decreased twice from initial price talk of LIB+400-425, first to LIB+350, followed by another 25bp reduction. The issue price was also tightened to 99.5 from 99 earlier. At the same time the loan was increased by $100 million from $1.8 billion at launch.

Price guidance on the seven-year euro term loan was also decreased, finalizing at EUR+375, with a 1 percent Libor floor and 99.5 discount price. Initial guidance was set at EUR+425-450, offered at a discount of 99.

There continues to be a lot of investor demand in the marketplace, said one institutional investor. While loan-starved investors will consider virtually any deal, investors are particularly focused on the perception of higher-quality credits with large liquid loan issues, he noted.

Loan investors point to the industrial manufacturer's market position, performance track record as well as the visibility and lead time surrounding the buyout as key factors in getting investors comfortable with the B2 credit profile at arguably aggressive leverage levels.

"With over $2 billion in revenue, good end market diversification, no region accounting for more than 50 percent of the business - even in a weak environment, we expect it would generate cash. For what it is, lenders are comfortable with that amount of debt," said Zev Halstuch, senior analyst at Moody's Investors Service.

Additionally, private equity sponsor KKR, and the large liquid nature of the institutional debt were also attractive elements, investors said.

With all these things, "all the flies are around the lantern," said the institutional investor.

The willingness of institutional investors to lend to the pump and fluid handling manufacturer also indicates just how quickly the loan market shrugged off recent market turbulence.

At the end of June, volatility roiled financial markets in reaction to the likelihood the Fed might soon ease its monetary stimulus. U.S. companies - facing skittish investors - promptly canceled more than $14 billion in leveraged loans to refinance debt or fund dividends to sponsors at low interest rates.

Just one month later, lenders piled into Gardner Denvers' highly leveraged buyout loan. Senior secured leverage is 4.6 times on a pro forma basis and 6.0 times total, said sources. Even at those levels, the $1.9 billion term loan was reportedly more than two times oversubscribed.

Money continues to flow into the asset class. In the week ended July 24, bank loan mutual funds received $1.85 billion in inflows, the largest weekly amount in history, according to Lipper FMI. Meanwhile, high yield bond mutual funds drew in a massive $3.28 billion.

Average secondary leveraged loan bids have also ticked up since selling off in late June. The average bid in the SMi100 ticked up to 98.6 on July 24 after falling to 98.21 on July 5.

"If earlier in the year investors were complacent on rates, then became worried about rates, now they are more relaxed about the interest rate outlook," Halstuch said. "Gardner Denver found itself at the back end of that volatility, marketing the debt at a time when investors are feeling more confident and the market is not in panic mode," he noted.

(Editing By Jon Methven)

By Leela Parker