Valley National drops term loan covenants; GM holds steady in wake of Chrysler rumors

By Sara Rosenberg

New York, Feb. 16 - In primary happenings, Valley National Gases Inc. eliminated the maintenance covenants on its term loan, but left pricing on the transaction in line with initial talk.

On the secondary side of things, General Motors Corp.'s term loan held firm at previous levels despite rumors of a potential bid for the Chrysler Group.

Valley National Gases dropped the maintenance covenants on its $165 million seven-year first-lien term loan (Ba3/B+), while leaving pricing unchanged at Libor plus 225 basis points, according to a market source.

The $50 million six-year revolver (Ba3/B+) retained its full covenant package, the source added. Pricing on this tranche is also set at Libor plus 225 bps, with a 50 bps unused fee.

Originally, the first-lien term loan and the revolver were being talked at Libor plus 225 to 250 bps, but pricing was revised to only Libor plus 225 bps once ratings on the deal emerged.

Valley National Gases' $290 million senior secured credit facility also includes a $75 million 71/2-year second-lien term loan (B3/CCC+) priced at Libor plus 600 bps.

Credit Suisse, UBS and Morgan Stanley are the lead banks on the deal, with Credit Suisse the left lead.

Proceeds will be used to help fund Caxton-Iseman Capital's leveraged buyout of the company in a transaction valued at about $312 million, including about $249 million to purchase outstanding shares and the assumption of debt.

Valley National is a Washington, Pa., packager and distributor of industrial, medical and specialty gases, welding equipment and supplies, propane and fire protection equipment.

GM steady on Chrysler speculation

General Motors' term loan was unmoved in Friday's quiet, pre-holiday session by unconfirmed speculation that the company may be looking to purchase the Chrysler Group from DaimlerChrysler AG, according to traders.

The term loan ended the day at 101 5/8 bid, 101 7/8 offered, right in line with where it had been trading previously, traders said.

General Motors is a Detroit-based automaker. DaimlerChrysler is a Germany-based automotive company.

Visteon firm on numbers

Visteon Corp.'s term loan was steady in trading after the company released fourth quarter and full year 2006 results, according to traders.

The term loan ended the day at 101 1/8 bid, 101 5/8 offered, unchanged from previous levels, traders said.

For the fourth quarter, the company reported a net loss of $39 million, or $0.30 per share, on total sales of $2.84 billion. By comparison, for the fourth quarter of 2005, the company reported net income of $1.3 billion, or $10.25 per diluted share.

Other fourth quarter results included EBIT-R of a loss of $37 million, an improvement of $82 million over the same period a year ago, capital expenditures of $108 million, a decrease of $77 million from the same period a year ago, and free cash flow of positive $131 million, compared with negative $143 million in the same period of 2005.

For full year 2006, Visteon reported a net loss of $163 million, or $1.28 per share, on total sales of $11.4 billion. By comparison, for full year 2005, the company reported a net loss of $270 million, or $2.14 per share.

Other full year results included EBIT-R of $27 million compared with a loss of $388 million for 2005, capital expenditures of $373 million, $212 million lower than 2005, and free cash flow of negative $92 million compared with negative $168 million for full year 2005.

As for the full year 2007 outlook, the company estimates EBIT-R will be in the range of breakeven to a loss of $100 million on anticipated 2007 product sales of $11.1 billion. In addition, Visteon expects free cash flow for 2007 to be in the range of negative $125 million to negative $225 million, assuming a constant level of receivables sales.

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

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