Quebecor floats rough structure, timing on exit loan; GM, Ford, Chrysler hold steady

By Sara Rosenberg

New York, May 18 - On the new deal front, some rough details on Quebecor World Inc.'s proposed exit financing credit facility surfaced on Monday, including estimated tranche sizes and a possible timeframe.

Meanwhile, over in the secondary market, General Motors Corp., Ford Motor Co. and Chrysler Financial Services LLC all saw their bank debt levels stay pretty firm during a very quiet trading session, which some interpret to be a good sign that last week's rally in these names is sustainable.

Also in trading, the LCDX 12 index was a little better, moving to 81.55 bid, 81.85 offered from 81.25 bid, 81.75 offered, in sympathy with equities.

Nasdaq closed up 52.22 points, or 3.11%, Dow Jones Industrial Average closed up 235.44 points, or 2.85%, S&P 500 closed up 26.83 points, or 3.04%, and NYSE closed up 202.98 points, or 3.58%.

Quebecor possible structure emerges

Quebecor World is still working on nailing down details on its exit financing credit facility. There are, however, already some expectations about the deal's structure and timing floating around the market, according to a source.

Currently, the intent is that the credit facility will include a revolver tranche and a term loan tranche, the source said.

Sizes on the tranches are still to be determined, but it is thought that they may each end up somewhere in the $300 million plus range, the source continued.

As was already reported, the company expects the total facility size to be around the $625 million to $700 million range.

Quebecor potential timing

A bank meeting date for the Quebecor exit facility is still in the process of being figured out, the source remarked.

However, it has been heard that the banks are targeting the launch sometime within the next couple of weeks, the source added.

Credit Suisse, GE Capital Markets and Wachovia are the lead arrangers on the deal.

According to a recent company news release, the facility is expected to be finalized by mid-July.

In addition to the exit facility, the company's new capital structure contemplated under its plan of reorganization would include up to $75 million in new unsecured notes, new convertible preferred shares, about 73.3 million of new common shares, about 10.7 million of new warrant bundles and a yet-to-be-determined cash payment.

The new capital structure would be exchanged for the $2.7 billion of liabilities subject to compromise and for repayment of the company's debtor-in-possession financing facility.

Quebecor is a Montreal-based printing and marketing company.

GM, Ford, Chrysler firm

Switching to trading happenings, General Motors, Ford and Chrysler Financial were all fairly steady on Monday after experiencing big run-ups last week, according to traders.

General Motors, a Detroit-based automotive company, saw its term loan quoted by one trader at 69¼ bid, 70¼ offered, compared to 69½ bid, 71 offered on Friday, by a second trader at 68½ bid, 72½ offered, unchanged from Friday, and by a third trader at 70 bid, 71½ offered, versus 70 bid, 72 offered on Friday.

Ford, a Dearborn, Mich.-based automotive company, saw its term loan quoted by one trader at 65 bid, 66 offered, compared to previous levels of 65 bid, 67 offered, and by a second trader at 64½ bid, 67½ offered, unchanged on the day.

And, Chrysler Financial, a provider of financial services for vehicles, saw its first-lien term loan quoted by the first trader at 84¼ bid, 85¾ offered, basically unchanged on the day, and by another trader at 85 bid, 85 offered, flat from Friday.

Autos steadiness a good sign

According to one trader, the rally that General Motors, Ford and Chrysler Financial underwent last week "firmed up" on Monday, since levels didn't go back down.

The trader explained that after having something like a 10 point run-up, it's a good sign that the bank debt was able to stay in the same context as the higher levels that were reached at the end of last week.

"Stuff was really quiet today. Nothing was really active today. I don't know if people are already on vacation or wish they were," the trader added.

What caused the rally is not totally clear, but some speculated that talk of a potential repayment of General Motors' bank debt may have been the impetus.

Rumor has it that last Thursday afternoon, news leaked out that there was a lawyer call with some group of lenders to talk about what's going to happen to General Motors' term loan and the revolver if the company files for bankruptcy, and that one of the scenarios discussed on the call was that the government might take the term loan and revolver out at par.

Market waiting on GM

One of the other traders told Prospect News on Monday that the next piece of news that everyone is waiting on for the auto sector is whether General Motors is going to file for bankruptcy in the next week and a half or so.

In April, the company launched offerings to exchange 225 shares of its common stock for $27 billion of its unsecured public notes.

If, prior to June 1, the company does not receive enough tenders of notes to consummate the exchange offers, it expects to seek relief under the U.S. Bankruptcy Code.

This relief may include seeking bankruptcy court approval for the sale of most or substantially all assets to a new operating company and a subsequent liquidation of the remaining assets, pursuing a plan of reorganization, or seeking another form of bankruptcy relief.

In an S-4/A filed with the Securities and Exchange Commission last week, General Motors said that it currently believes that if it pursues one of the alternatives. a sale would be the most likely.

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