Sirva trades down with lender call; Fresenius better on paydown plans; LCDX, cash market soften

By Sara Rosenberg

New York, June 18 - Sirva Inc.'s term loan headed lower on Monday after the company held a lender's call to discuss an amendment and its overall business performance.

In other trading news, Fresenius Medical Care AG & Co. KGaA's term loan B was a touch stronger as the company announced plans for a paydown.

Also, LCDX was weaker on the day with no real explanation for the downturn, and the cash loan market was softer as well, with technicals playing the main role there.

Sirva's term loan traded actively at lower levels during Monday's market hours as the company held a conference call for the current lenders under its senior secured credit facility at 10 a.m. ET to discuss amending the facility and to update the lenders on its financials, according to a trader.

The term loan ended the day at 96 bid, 96¾ offered, down about a point from previous levels, the trader said.

However, the paper was most actively traded in the 95½ to 96½ context, the trader added.

On Monday, Sirva told its lenders that as a result of the weaker-than-expected domestic real estate market, it is requesting covenant relief through 2008.

The weakness in the domestic real estate market resulted in higher-than-anticipated levels of home inventory for the company, increased losses on homes sold out of inventory, lower-than-expected moving volumes, increased reserves for loss on home sales and home sale expenses during the second half of 2006 and higher-than-expected gross investment in inventory homes.

Both the company's global relocation and moving services North America segments saw EBITDA negatively impacted by these events.

At the end of 2006, global relocation's EBITDA was $24.6 million, down from $33.1 million at the end of the previous year, and moving services North America's EBITDA was $27.6 million, down from $28 million at the end of 2005.

Sirva's consolidated EBITDA at the end of 2006 was $34 million, down from $42.2 million at the end of 2005.

The company went on to say that the covenant relief is driven by a need for more flexibility because of this market weakness and is also necessary for it to be able to present auditors with an acceptable covenant outlook for 10-K and 10-Q reports.

The credit facility consists of a $320 million term loan and a $175 million revolver, of which $48 million was drawn at the end of the first quarter.

JPMorgan is the lead bank on the amendment.

Lenders were also updated on Sirva's progress to bring its filings with the Securities and Exchange Commission up to date.

The company filed its restated 2004 10-K and 2005 10-K in January and its 10-Qs for the first three quarters of 2006 in May, and it expects to file its 2006 10-K in June.

The company anticipates being current with its second-quarter 2007 10-Q.

Sirva is a Westmont, Ill.-based relocation services provider.

Fresenius inches up

Fresenius' term loan B was slightly stronger during light trading in the name in reaction to the company's plans to repay some of its bank debt, according to a trader.

The term loan B closed the session at par bid, par 1/8 offered, up by about a sixteenth of a point on the day, the trader said.

On Monday, the company revealed that it will be selling $500 million in senior unsecured notes and that proceeds from this offering will in part be used to repay debt under its senior secured credit facility.

Remaining bond proceeds will be used to repay other short-term debt and for general corporate purposes.

Fresenius is a Bad Homburg, Germany-based dialysis products and services provider.

LCDX, cash market weaken

LCDX and the cash market were both lower on Monday, and while the LCDX movement was somewhat of a mystery, the cash market performance was seen as a technically driven event, according to traders.

LCDX went out on Monday at 100 bid, 100.04 offered, down from Friday's closing levels of 100.12 bid, 100.15 offered, traders said.

"I have no idea why it's down. Your guess is as good as mine," one trader remarked about the index's levels.

"It's just lower. There's no real explanation for it. It's definitely not from a lack of activity," a second trader added.

Meanwhile, the cash market had a weaker undertone and names in general looked like they gave up about an eighth of a point on the day, the second trader said.

According to this trader, the cash market softness is a result of investors looking at the forward calendar and realizing just how much paper will be hitting the secondary over the next couple of weeks.

"There's no mass panic or anything yet. It's just a technical picture," the trader concluded.

Trilogy sets talk

Switching over to the primary market, Trilogy International Partners is talking its $200 million five-year senior secured term loan (B2/B-) at Libor plus 350 basis points, according to a market source.

Deutsche Bank, JPMorgan, Bear Stearns and Goldman Sachs are the joint bookrunners on the deal, with Deutsche and JPMorgan the joint lead arrangers.

The term loan, which was launched with a bank meeting last Thursday, will be used to refinance debt and for general corporate purposes.

Trilogy is a Bellevue, Wash., telecommunications company.

AmWINS closes

AmWINS Group, Inc. closed on its new $432.5 million credit facility, according to a company news release.

The facility consists of a $50 million revolver (B2/B-), a $282.5 million first-lien term loan (B2/B-) priced at Libor plus 250 bps and a $100 million second-lien term loan (B3/CCC) priced at Libor plus 550 bps.

During syndication, pricing on the second-lien term loan was lowered from original talk of Libor plus 575 bps.

Wachovia and Madison Capital acted as the lead banks on the deal.

Proceeds were used to fund the acquisition of the American Equity Underwriters, Inc., refinance AmWINS' existing credit facilities and to fund a $100 million dividend to AmWINS' existing shareholders.

AmWINS is a Charlotte, N.C., wholesale distributor of specialty insurance products. American Equity Underwriters is a Mobile, Ala., provider of insurance programs for maritime employers.

Dollar Thrifty closes

Dollar Thrifty Automotive Group Inc. closed on its new $600 million credit facility (B1/BB-), according to a company news release.

The facility consists of a $250 million term loan B due June 2014 priced at Libor plus 200 bps, with a step down to Libor plus 175 bps upon the company achieving certain ratings, and a $350 million revolver due June 2013 that is priced at Libor plus 200 bps.

During syndication, pricing on the term loan B was reverse flexed from original talk at launch of Libor plus 225 bps with the addition of the step.

Deutsche Bank and Bank of Nova Scotia acted as the lead banks on the deal, with Deutsche the left lead.

Proceeds from the revolver were used to refinance the company's existing $300 million revolver, and proceeds from the term loan B were used to repay asset-backed vehicle debt.

Dollar Thrifty is a Tulsa, Okla., vehicle rental company.

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