MetroPCS breaks; Blockbuster up with numbers; Spirit, Grosvenor set price talk

By Sara Rosenberg

New York, Nov. 2 - In the secondary market Thursday, MetroPCS Communications Inc.'s credit facility freed for trading with the term loan B quoted atop par, Blockbuster Inc.'s bank debt headed higher on third-quarter financial results and Michaels Stores Inc.'s term loan came under some pressure.

Meanwhile, on the primary side of things, Spirit AeroSystems Holdings Inc. came out with price talk on its proposed amended and restated credit facility and Grosvenor released price talk on its term loan as both transactions were launched during market hours.

MetroPCS' credit facility allocated and broke for trading on Thursday, with its $1.6 billion term loan B active in the 100.375 bid, 100.575 offered context, according to a market source.

The term loan B is priced at Libor plus 250 basis points. During syndication, the tranche was upsized from $1.4 billion and pricing was reverse flexed from original talk at launch of Libor plus 275 bps as more than 100 accounts for a total of about $3 billion in orders were in the book.

MetroPCS' $1.7 billion credit facility (B1/B) also includes a $100 million revolver with a 50 bps commitment fee.

Bear Stearns is lead arranger on the deal and joint bookrunner with Merrill Lynch and Bank of America.

Proceeds from the facility, along with $900 million of bonds (downsized from $1.1 billion when the term loan B was upsized), will be used to refinance $900 million of existing debt and fund the purchase of wireless spectrums won in the Federal Communications Commission's Auction 66.

MetroPCS is a Dallas-based provider of wireless communications services.

Blockbuster trades up

Blockbuster's bank debt was stronger by about a quarter of a point after the company came out with third-quarter results that were overall viewed positively by the market, according to a trader.

The company's revolver closed the day at 97 bid, 97½ offered, up from 96¾ bid, 97¼ offered, and the term loan B closed the day at par ¼ bid, par ¾ offered, up from par bid, par ½ offered, the trader said.

For the third quarter, Blockbuster reported a net loss of $24.7 million, or $0.15 per common share, compared with a net loss of $491.4 million, or $2.67 per common share, for the third quarter of 2005. Adjusted net loss for the quarter totaled $11.5 million, or $0.08 per common share, compared with adjusted net loss of $25.9 million, or $0.14 per common share, last year.

Revenues for the third quarter declined 2.9% to $1.33 billion from $1.37 billion for the third quarter of last year, primarily due to a reduction in rental revenues caused by the closure of stores and a 1.4% decrease in worldwide same-store revenues caused, in part, by an unfavorable home video release schedule.

Operating income for the quarter totaled $1.9 million, compared with an operating loss of $332.4 million for the same period last year.

For the first nine months of 2006, operating income totaled $29 million, compared with an operating loss of $453.4 million for the same period last year and free cash flow improved to $129.8 million for the from a negative $247.9 million for the same period in 2005.

Blockbuster is a Dallas-based provider of in-home movie and game entertainment.

Michaels softens

Michaels Stores' term loan traded a touch lower on Thursday as the debt appeared to just be under the influence of some selling pressure, according to a trader.

The term loan closed the day at par ¼ bid, par ½ offered, down from previous levels of par 3/8 bid, par 5/8 offered, the trader said.

Michaels Stores is an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

Spirit price talk

In primary news, Spirit AeroSystems launched its approximately $590 million amended and restated term loan to lenders with a conference call Thursday afternoon at price talk of Libor plus 175 bps, according to a market source.

The amended and restated term loan, which will be due in June 2013, will replace the company's existing approximately $690 million term loan B that carries an interest rate of Libor plus 225 bps and matures on Dec. 31, 2011.

The new term loan is smaller than the existing term loan B to accommodate for an expected $100 million paydown that the company will make with proceeds from its proposed initial public offering of common stock that is being done in conjunction with this amendment and restatement.

In addition to the new term loan, the company is amending and restating its senior secured credit facility (BB+) to increase its revolver to $400 million from $175 million. Pricing on the upsized revolver will remain tied to the existing pricing grid, the source said.

Furthermore, the company plans to replace the existing financial covenants with a covenant limiting the maximum total secured leverage ratio of Spirit and its subsidiaries on a consolidated basis, and remove the mandatory prepayment requirements with respect to proceeds of equity issuances.

Citigroup is the lead bank on the deal.

Spirit is a Wichita, Kan., non-OEM designer and manufacturer of aerostructures.

Grosvenor spread guidance

Grosvenor also came out with opening price talk Thursday as the transaction was presented to investors with a bank meeting at 1 p.m. ET at the W Hotel in N.Y., according to a market source.

The $315 million term loan was launched at Libor plus 200 bps to 225 bps, the source said.

The company's $330 million credit facility also includes a $15 million revolver.

Goldman Sachs is the lead bank on the deal that will be used to affect a recapitalization and for general corporate purposes.

Grosvenor is a high-quality asset manager.

Beacon Roofing closes

Beacon Roofing Supply, Inc. closed on its new $500 million-plus credit facility consisting of a $350 million seven-year term loan priced at Libor plus 200 bps, a $150 million asset-based revolver priced at Libor plus 100 bps with a 25 bps unused fee and a C$15 million asset-based revolver, according to a company news release.

During syndication, pricing on the term loan firmed up at the high end of original guidance of Libor plus 175 to 200 bps.

The revolver is secured by a first lien on receivables, and the term loan is secured by a first lien on inventory and plant property and equipment.

There is a $200 million accordion feature.

General Electric Capital Corp. acted the lead bank on the deal that was used to refinance the company's existing $360 million credit facility.

Leverage is around the mid-two times area.

Beacon is a Peabody, Mass., distributor of roofing materials and complementary building products.

Rent-A-Center closes

Rent-A-Center, Inc. completed documentation on its new $1.3225 billion credit facility (Ba2/BB), according to a company news release. JPMorgan acted as the lead bank on the deal.

The facility consists of a $400 million five-year revolver priced at Libor plus 175 bps, a $197.5 million five-year term loan A priced at Libor plus 175 bps and a $725 million six-year term loan B priced at Libor plus 175 bps.

During syndication, pricing on the term loan B was reverse flexed from original talk at launch of Libor plus 200 bps.

Proceeds are being used to repay the company's existing senior debt, currently $365.2 million outstanding, finance the proposed acquisition of Rent-Way, Inc., and for general corporate purposes.

The funding of the new senior credit facility is contingent upon the closing of the pending acquisition of Rent-Way.

Rent-A-Center is a Plano, Texas, rent-to-own operator. Rent-Way is an Erie, Pa., rental purchase company.

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