Mills stealing trading spotlight; Airlines soften; NRG heads higher; Sensata gets strong reception

By Sara Rosenberg

New York, April 7 - In trading Friday, Mills Corp. was still seeing investors clamoring to buy its bank debt after a very strong run-up over the course of the week, UAL Corp. and Delta Air Lines Inc. traded off a touch and NRG Energy Inc. traded up.

Meanwhile, in primary happenings, Sensata Technologies' billion-plus institutional term loan has already received enough orders to put the book at strong oversubscription.

Mills' bank debt has been on the top of everybody's list of paper to buy this week, creating a rallying affect that has the loan higher by 3 to 4, or maybe even more, points over the past few days, according to a trader.

The bank debt closed Friday's session at 97¾ bid, 98½ offered, the trader said. On Thursday, prior to an auction for a chunk of the paper, the bank debt was quoted at 96 bid, 96½ offered. However, the auction helped to push levels higher as it was heard to have gone off at around 98.

"Everybody wants it," the trader said about Mills' bank debt. "I think there was an amendment that got put through. And, people are realizing that this thing has full asset coverage so they're willing to pay up for it.

"But, with that guys are paying for it now, there's got to be some kind of announcement coming, like a refinancing or a sale."

Mills has previously said that it is aggressively pursuing the exploration of strategic options to enhance shareholder value, which may include a sale of all or part of the company or a recapitalization. However, there has been no official announcement on any specific strategic option being decided upon.

Goldman, Sachs & Co. and J.P. Morgan Securities are assisting the company with this process.

Mills is an Arlington, Va.-based developer, owner and manager of a diversified global portfolio of retail destinations including regional shopping malls, market dominant retail and entertainment centers, and international retail and leisure destinations.

UAL, Delta trade off

The airline sector appeared to be somewhat weaker during Friday's market hours, primarily just due to market technicals, according to a trader.

Two noticeable names included UAL Corp. and Delta Air Lines Inc. - with UAL's term loan trading down about a quarter of a point to 102½ bid, 103 offered, and Delta's term loan trading down by about a quarter of a point as well to 101 3/8 bid, 101 5/8 offered, the trader said.

UAL is an Elk Grove Township, Ill., airline, and Delta is an Atlanta-based airline.

NRG trades up

NRG Energy's term loan B, on the other hand, was influenced well by market technicals as its bank debt traded higher by about a quarter of a point, according to a trader.

The term loan closed the session quoted at 101¼ bid, 101½ offered, the trader said, adding that people buy into the deal since they know it's a safe investment.

NRG is a Princeton, N.J.-based wholesale power generation company.

Sensata fills up fast

Sensata Technologies' $1.2 billion term loan B was already at least two times oversubscribed by Friday, as investors jumped into the deal quickly after the official syndication launch earlier in the week, according to a market source.

The term loan B is being talked at Libor plus 200 basis points.

Sensata's $1.35 billion credit facility (B1/BB-), of which some may be done in euros, also contains a $150 million revolver that is talked at Libor plus 200 basis points as well.

Morgan Stanley, Bank of America and Goldman Sachs are the lead banks on the deal that will be used to fund the leveraged buyout by Bain Capital LLC of Texas Instruments Inc.'s Sensors & Controls business for $3 billion in cash.

In addition to the credit facility, the company plans on issuing $900 million equivalent of high-yield bonds for LBO financing, divided between dollar-denominated and euro-denominated senior notes, and dollar-denominated senior subordinated notes with tranche sizes and maturities to be determined. The bonds are expected to price late in the week of April 17.

Sensata Technologies is an Attleboro, Mass., supplier of engineered sensors and controls to the appliance, climate control, industrial, automotive, lighting and aircraft markets.

Xerox closes

Xerox Corp. closed on its new $1.25 billion unsecured five-year revolver Friday that was used to replace the company's existing $1 billion secured credit facility.

Citigroup and JPMorgan acted as the lead arrangers and bookrunners on the Stamford, Conn., document company's deal.

The revolver, which contains a $200 million letter-of-credit subfacility, can carry an interest rate ranging from Libor plus 32 to 120 basis points, depending on ratings.

There is a $750 million accordion feature and a one-year extension option.

Financial covenants include a maximum leverage ratio ranging from 4.25 to 3.25 over the life of the facility and a minimum interest coverage ratio of 3.00:1.

At close, the revolver was undrawn, but the company has given notice that it plans to draw down about $50 million in the next several days, according to an 8-K filed with the Securities and Exchange Commission.

dj Orthopedics closes

dj Orthopedics Inc. closed on its new $400 million credit facility (Ba3/BB-) consisting of a $350 million seven-year term loan with an interest rate of Libor plus 150 basis points and a $50 million revolver.

During syndication, the term loan was downsized from $360 million because of the company generating strong cash flow and pricing was reverse flexed from Libor plus 175 basis points.

Wachovia acted as the lead bank on the deal that was used to fund the acquisition of Aircast Inc. from its shareholders, including majority owner Tailwind Capital, for about $290 million in cash.

dj Orthopedics is a Vista, Calif., medical device company specializing in rehabilitation and regeneration products for the non-operative orthopedic and spine markets. Aircast is a Summit, N.J., designer and manufacturer of orthopedic devices, including ankle bracing products, and vascular systems.

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