NRG firms structure on upsized deal, price talk; Ameritrade sets talk; Morgan Stanley wins auction

By Sara Rosenberg

New York, Jan. 4 - NRG Energy Inc. has set structure, resulting in a deal that is $400 million larger than originally expected, and narrowed down price talk on its credit facility ahead of Thursday's bank meeting.

Also in the primary, Ameritrade Holding Corp. came out with price talk on its multi-billion dollar credit facility as the deal is also gearing up to launch with a Thursday bank meeting.

Meanwhile, in secondary doings, the primary focus of the day was the nearly $500 million portfolio of par loan names that was being auctioned off, with Morgan Stanley coming out on top with the winning bid.

In other trading news, Visteon Corp.'s recently upsized term loan allocated and freed for trading, with the paper closing the day in the mid-par to 101 type of range.

NRG has firmed up the structure on its credit facility, which will now contain a larger-than-expected revolver tranche, resulting in an overall deal size of $5.2 billion, up from the previously expected $4.8 billion, according to a market source.

Furthermore, price talk on the credit facility has been narrowed a bit, with the syndicate opting to launch the deal on Thursday at the tight end of previously expected spread guidance that was based on ratings.

The credit facility is now set to consist of a $1 billion five-year revolver, up from the $600 million amount that was given in the company's commitment letter, a $1 billion five-year synthetic letter-of-credit facility and a $3.2 billion seven-year term loan B, the source said.

Opening pricing on the revolver will go out at Libor plus 200 basis points with a 50 basis point undrawn fee, while opening pricing on the synthetic letter-of-credit facility and the term loan B will go out at Libor plus 225 basis points, the source continued.

According to the company's credit facility commitment letter, interest on the term loan and letter-of-credit facility was expected to be Libor plus 225 basis points if the facility is rated Ba3 and BB, with a stable outlook or better, otherwise Libor plus 250 basis points. And, interest on the revolver was expected to be at Libor plus 200 basis points if the facility is rated Ba3 and BB-, with a stable outlook or better, otherwise Libor plus 225 basis points.

Morgan Stanley and Citigroup are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley on the left.

Proceeds from the facility will be used to help finance NRG's acquisition of Texas Genco LLC.

Princeton, N.J.-based energy company NRG announced in early October that it will pay $5.8 billion for Houston-based Texas Genco, $4 billion in cash and $1.8 billion in NRG shares representing about 25% of the combined company's stock; the current Texas Genco owners may also receive as much as $400 million of preferred stock.

Ameritrade floats talk

Ameritrade came out with opening price talk on its $2.2 billion credit facility (Ba1/BB/BB) as the deal is getting ready to kick off syndication with a Thursday bank meeting, according to a market source.

The $1.65 billion seven-year term loan B is being talked at Libor plus 175 basis points, and the 250 million six-year term loan A and $300 million five-year revolver are being talked at Libor plus 150 basis points, the source said.

Citigroup is the lead bank on the deal that will be used to help fund the acquisition of TD Bank Financial Group's U.S. brokerage business, TD Waterhouse. The combined company will operate under the name TD Ameritrade.

Under the transaction agreement, in exchange for the U.S. brokerage business, TD Bank will receive approximately 32% ownership in TD Ameritrade and Ameritrade shareholders will receive a special cash dividend of $6.00 per share.

Ameritrade is an Omaha, Neb.-based provider of securities brokerage services and technology-based financial services.

Morgan Stanley wins auction

A good portion of secondary attention was turned to the auction for an approximately $490 million portfolio as bids were due at 11 a.m. ET on Wednesday, according to traders.

Morgan Stanley won the portfolio, beating out Credit Suisse First Boston's cover bid of 101.01, traders said.

The seller was Franklin Templeton.

The portfolio, which was put up for sale on Tuesday, contains about 250 issuers that are primarily considered to be par names.

Visteon breaks atop par

Visteon's $350 million 18-month secured term loan freed for trading on Wednesday with levels quoted at par 3/8 bid, par 7/8 offered on the break and then moving up to par ½ bid, 101 offered where it closed the session, according to a trader.

The term loan is priced with an interest rate of Libor plus 450 basis points. During syndication, the tranche was upsized from $300 million due to strong market interest.

JPMorgan Securities and Citicorp Inc. are the lead arrangers on the deal.

Proceeds will be used to replace an existing $300 million short-term secured revolving credit facility, which expired Dec. 15.

Closing on the loan is targeted for next week.

Visteon is Van Buren Township, Mich., automotive supplier.

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