Allison postponed; Orbitz breaks; United Rentals up on buyout; LCDX, cash slide progresses

By Sara Rosenberg

New York, July 23 - Allison Transmission has decided to postpone the institutional syndication of its credit facility; however, banks are still able to look at the deal.

Over in the secondary, Orbitz Worldwide Inc.'s credit facility broke for trading during Monday's market hours, with the term loan wrapping around the par context, United Rentals Inc.'s term loan headed higher on news of a buyout, and LCDX and cash were softer once again.

Allison Transmission has opted not to pursue the institutional syndication of its $3.5 billion credit facility (B1/BB-) at this time due to poor market conditions, according to a market source.

But, banks will continue to be given a look at the deal in its entirety, making this stage of the syndication somewhat like a senior managing agents round, the source explained.

The credit facility, which had already been launched to institutional investors and banks with a meeting on July 18, consists of a $3.1 billion term loan B and a $400 million revolver.

Price talk on the two tranches was launched at Libor plus 250 basis points, and the term loan B was being offered to lenders with an original issue discount of 991/2.

Citigroup, Lehman Brothers and Merrill Lynch are the lead banks on the deal, which is expected to come back for institutional syndication at a later date.

Proceeds from the credit facility, along with $1.1 billion in senior notes, will be used to help fund the acquisition of Allison Transmission by the Carlyle Group and Onex Corp. from General Motors Corp. for $5.575 billion.

The senior notes offering has also been postponed at this time, the source remarked.

Despite the delay in the financing, the acquisition is still expected to close on time, the source added.

Allison Transmission is a Speedway, Ind., designer and manufacturer of automatic transmissions for on-highway trucks and buses, off-highway equipment and military vehicles.

CCS Medical sets talk

Also in the primary, CCS Medical Holdings Inc. released price talk on its in-market $415 million senior secured credit facility (B3), according to a market source.

The $50 million six-year revolver is being talked at Libor plus 250 bps and the $365 million seven-year term loan is being talked at Libor plus 300 bps, the source said.

Wachovia, Goldman Sachs and Lehman Brothers are the bookrunners on the deal.

Proceeds will be used to help repay the company's existing credit facility. As of Dec. 31, there was $330.3 million outstanding under the first-lien facility, $110 million outstanding under the second-lien term loan and $59.3 million outstanding under an unsecured note payable.

The facility is linked to the company's proposed initial public offering of common stock, but the IPO is not conditioned on the closing of the new credit facility. If the new facility is not completed, then the company's existing facility will remain in place.

CCS Medical is a Clearwater, Fla., medical supply management company.

Orbitz frees to trade

Moving to the secondary market, Orbitz Worldwide's credit facility broke for trading during the session, with the $600 million seven-year term loan quoted at 99¾ bid, par 1/8 offered, according to a trader.

The term loan is priced at Libor plus 300 bps.

During syndication, pricing on the term loan was flexed up from original talk at launch of Libor plus 250 bps.

Oribitz's $685 million senior secured credit facility (B1/BB-) also includes an $85 million six-year revolver that is priced at Libor plus 300 bps as well.

During syndication, the revolver was upsized from $75 million and pricing was also increased from original talk at launch of Libor plus 250 bps.

Also during syndication, a $125 million six-year synthetic letter-of-credit facility tranche was eliminated from the capital structure because the company's liquidity needs will be met by parent company Travelport Ltd.

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

The deal is being done in connection with the company's initial public offering of 34 million shares of common stock, which priced last Thursday at $15 per share.

Proceeds from the credit facility, along with IPO proceeds, will be used to fund a dividend to Travelport.

Travelport plans to use the proceeds from the payment to repay a portion of its senior credit facility debt.

The completion of the IPO is scheduled for July 25.

Orbitz is a Chicago-based online travel company.

United Rentals heads towards par

United Rentals' term loan moved higher on Monday after news hit the market that Cerberus Capital Management LP will be buying the company, according to a trader.

The term loan ended the day at 99 bid, par offered, up from 98½ bid, 99½ offered, primarily because investors are expecting a par paydown with the buyout, the trader said.

Under the terms of the agreement, United Rentals stockholders will receive $34.50 in cash per share, with the transaction valued at approximately $6.6 billion, including the assumption of roughly $2.6 billion in debt obligations.

Debt financing for the buyout will be led by Bank of America, Credit Suisse, Morgan Stanley and Lehman Brothers.

Completion of the transaction is subject to customary closing conditions, including stockholder approval and regulatory review.

United Rentals is a Greenwich, Conn., equipment rental company.

LCDX, cash softer again

LCDX and the cash market in general were once again lower, still on market technicals, according to a trader.

The index ended the session at 94.15 bid, 94.35 offered, down from 94.50 bid, 94.75 offered on Friday, the trader said.

"LCDX opened weaker at 94.30 bid, 94.50 offered, traded as high as 94.75 and then steadily traded off as the day moved on," the trader remarked.

Meanwhile, the cash market had a weaker tone, with certain names down an eighth to a quarter of a point and other names remaining unchanged, the trader continued.

Some of the names that moved lower included Georgia-Pacific Corp. and Kinder Morgan Inc.

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 97 5/8 bid, 98 1/8 offered, down from 97¾ bid, 98¼ offered, the trader said.

Kinder Morgan, a Houston-based energy infrastructure provider, saw its term loan B end the day at 97 5/8 bid, 98 1/8 offered, down from 98 bid, 98½ offered, the trader added.

Also weaker was Dothan, Ala.-based video rental company Movie Gallery Inc., with its first-lien term loan B ending up at 92 bid, 93 offered, down from 93½ bid, 94½ offered, a second trader said.

On Monday, Movie Gallery announced that its first-lien credit facility lenders have agreed to forbear until Aug. 14 from exercising rights and remedies arising from existing defaults.

"The forbearance was known about since last week," the trader said. "This is market technicals. The market was just really bad today."

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