AttachmateWRQ floats talk ahead of launch, nets orders; Secondary starts week in downward spiral

By Sara Rosenberg

New York, May 22 - AttachmateWRQ came out with price talk on its credit facility in preparation for its Tuesday launch, and investor interest has been piqued, with some orders already finding their way into the book.

Meanwhile, in trading, the overall market felt significantly softer on Monday, leaving some with a sinking feeling that the recent trend of weakening levels may be here to stay for at least a little while longer.

AttachmateWRQ released price talk on its proposed $505 million credit facility ahead of the Tuesday morning bank meeting that will officially kick off syndication on the deal that has already received market interest, according to a source.

Both the $20 million five-year revolver and the $320 million six-year first-lien term loan B will be presented to lenders with opening price talk of Libor plus 325 basis points, the source said.

As for the $165 million 61/2-year second-lien term loan, that will presented with opening price talk of Libor plus 700 basis points and call protection of 102 in year one and 101 in year two, the source continued.

And, even though the official launch has not yet taken place, the transaction has generated a lot of interest already with some early commitments being placed since the deal was first announced, the source added.

Credit Suisse and UBS are the lead banks on the deal that will be used to fund the acquisition of NetIQ Corp. for $12.20 per share in cash, in a transaction valued at about $495 million.

AttachmateWRQ, which is owned by an investment group led by Francisco Partners, Golden Gate Capital and Thoma Cressey Equity Partners, is a Seattle-based provider of access and integration software for legacy systems. NetIQ is a San Jose, Calif.-based provider of integrated systems and security management solutions.

Secondary freefall continues

The general secondary market started the week on a low note as levels continued to head lower, forcing investors to take a very cautious stance about getting involved in any sizable volume, according to a trader.

"The market felt substantially weaker than last week," the trader said, somewhat in disbelief since the majority of last week was categorized by softening and low volume.

"It was off probably three eighths from Thursday, about a quarter from Friday since we did have that slight pick-up in levels on Friday.

"High-yield market was off probably about three eighths, but it's very rare that the loan market squares off with the high-yield market," the trader continued.

"People seem very cautious to enter the market. We're seeing some people step in. Volume did pick up, although nothing traded in size, but it doesn't feel like this is the bottom.

"If there's one or two good days where the market is up an eighth to a quarter, then we'll probably see buyers really step in," the trader added.

Some of the sizable deals out in the market that were leading the pack to lower ground on Monday included SunGard Data Systems Inc., Georgia-Pacific Corp. and Goodyear Tire & Rubber Co.

SunGard saw its term loan trade off Monday by about an eighth to a quarter of a point to par 5/8 bid, 101 offered, a trader said.

As for Georgia-Pacific, its term loan B was off an eighth of a point as closing levels settled at par 1/8 bid, par 3/8 offered, the trader continued.

And, Goodyear's second-lien term loan dropped by a quarter of a point to close the day quoted at 101 bid, 101½ offered, the trader added.

SunGard is a Wayne, Pa.-based provider of integrated software and processing solutions, primarily for financial services. Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals. Goodyear is an Akron, Ohio-based tire company.

Allegheny Energy closes

Allegheny Energy Inc. closed on its all pro rata $579 million five-year credit facility consisting of a $400 million revolver and a $179 million term loan A, according to a company news release.

The new bank debt carries an interest rate of Libor plus 100 basis points, and the revolver has an undrawn fee of 25 basis points.

Proceeds were used to refinance the company's existing $579 million credit facility, which was set to mature in June 2010 and carried an interest rate of Libor plus 150 basis points.

Citigroup and Credit Suisse acted as joint lead arrangers on the deal.

Allegheny is a Greensburg, Pa., diversified utility holding company.

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