Alltel, TXU, Georgia-Pacific firm in otherwise weaker secondary; LCDX down

By Sara Rosenberg

New York, Nov. 26 - Alltel Communications Inc., Texas Competitive Electric Holdings Co. LLC (TXU) and Georgia-Pacific Corp. all saw their term loan levels inch a little bit higher on Monday in a secondary market that was overall lower.

In addition, LCDX lost some ground during the session as it followed the stock market's performance.

Alltel, Texas Competitive and Georgia-Pacific were slightly better in trading, which was not the general norm for the session, with some suggesting that they were supported by opportunistic buyers.

Alltel, a Little Rock, Ark., provider of wireless voice and data communications services, saw its term loan B-3 end the day at 95¼ bid, 95¾ offered, up from around 95 bid, 95½ offered, traders said.

Texas Competitive, a Dallas-based energy company, saw its term loan B-2 close the day at 97½ bid, 97 7/8 offered, up from around 97 3/8 bid, 97 5/8 offered, traders continued.

Georgia-Pacific, an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals, saw its term loan B end the day at 94¼ bid, 95 offered, up from around 94 bid, 94½ offered.

"I imagine there are guys just putting some money in the more liquid names that have gotten beaten up the most," one trader speculated.

"The rest of the names across the board were down," the trader remarked, putting cash in general lower by about an eighth to a quarter of a point.

For example, First Data Corp., a Greenwood Village, Colo., provider of electronic commerce and payment services for businesses, saw its term loan B-2 go out at 94 bid, 94½ offered, down from 94¼ bid, 94 5/8 offered, the trader added.

"Things were down and quiet and negative," another trader said. "There wasn't a lot of activity out there. First day back and people are trying not to buy anything because balance sheets are full coming up to year end. Definitely seemed to have a negative bias out there for us today."

LCDX softens with stocks

As for LCDX 9, that started the day at stronger levels but came back in during the afternoon with equities, according to a trader.

The index went out around 95.20 bid, 95.40 offered, down from around 95.55 bid, 95.70 offered on Friday, the trader said.

Around midday on Monday, the index was quoted as high as 95.70 bid, 95.80 offered before it settled in at the lower levels, the trader added.

Stocks closed lower on the day, with Nasdaq down 55.61 points, or 2.14%, Dow Jones Industrial Average down 237.44 points, or 1.83%, S&P 500 down 33.48 points, or 2.32%, and NYSE down 193.48 points, or 2.02%.

Education Media ups OIDs, readies allocations

Switching to the primary, Education Media & Publishing increased the original issue discounts on its first- and second-lien debt, is offering only a portion of the tranches and is hoping to allocate the deal sometime this week, according to market sources.

Both the $4.95 billion 61/2-year first-lien term loan (B1/B) and the $1.7 billion seven-year second-lien mezzanine loan (Caa2/CCC) are now being offered at a discount of 96, sources said. Previously, the first-lien was being offered in the 99 area and the second-lien was being offered first at par and then at 98.

Of the total first-lien amount, only $1.5 billion is being offered to investors and of the total second-lien amount, only $850 million is being offered to investors, sources continued. Originally, the tranches were hoped to be sold in their entirety.

The first-lien term loan is priced at Libor plus 375 basis points and carries call protection of 103 in year one, 102 in year two and 101 in year three.

The second-lien loan is priced at Libor plus 850 bps and is non-callable for 18 months, then at 104 for a year, at 102 for a year and at par after that.

Education Media's $7.15 billion credit facility also includes a $500 million six-year revolver (B1/B) priced at Libor plus 375 bps, with a 50 bps commitment fee.

Credit Suisse, Lehman Brothers and Citigroup are the lead banks on the deal.

Proceeds will be used to help fund Houghton Mifflin Co.'s acquisition of the Harcourt Education, Harcourt Trade and Greenwood-Heinemann divisions of Reed Elsevier for $4 billion, consisting of $3.7 billion in cash and $300 million of common stock of Houghton Mifflin Riverdeep Group plc, Houghton Mifflin's parent company.

Existing investors, including J&E Davy, have committed to provide $235 million of new equity financing to support the transaction.

In connection with the acquisition, Boston-based Houghton Mifflin will be renamed Education Media & Publishing.

CreditCards.com pulled

CreditCards.com Inc.'s $100 million credit facility was put on hold as a result of its initial public offering of common stock being postponed due to market conditions, according to a source.

The facility was comprised of a $25 million revolver and a $75 million term loan, with both tranches talked at Libor plus 200 bps.

BMO Capital Markets was acting as the lead bank on the deal.

Proceeds were going to be used to repay debt and for general corporate purposes.

CreditCards.com is an Austin, Texas-based online credit card marketplace.

Generics firms OIDs

Generics International Inc. firmed up the original issue discounts on its first- and second-lien term loan debt within the original guidance and successfully wrapped syndication of the deal, according to a market source.

The $265 million funded first-lien term loan B (B1/B+) and the $27 million delayed-draw term loan (B1/B+) both sold at 99, with pricing set at Libor plus 350 bps, and the $140 million second-lien term loan (Caa1/CCC+) sold at 991/2, with pricing set at Libor plus 750 bps, the source said. Originally, both the first- and the second-lien term loans were guided at a discount that was in the 99 to 99½ range.

Generics International's $507 million credit facility also includes a $75 million revolver (B1/B+) that priced at Libor plus 350 bps.

RBC Capital acted as the lead arranger and bookrunner on the deal, with General Electric Capital Corp. signing on as first-lien co-arranger and syndication agent.

Proceeds were used to help fund Apax Partners' acquisition of Qualitest and Vintage Pharmaceuticals, a Huntsville, Ala.-based distributor and manufacturer of generic pharmaceuticals.

Pro forma leverage is roughly 3.5 times through the first-lien debt and 5.5 times through the second-lien debt.

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