Lear rise continues; MetroPCS up with numbers; Georgia-Pacific, Kinder higher; LCDX bounces around

By Sara Rosenberg

New York. Aug. 3 - Lear Corp.'s term loan continued to edge its way higher on Friday, still spurred on by the recent news of good quarterly numbers, and MetroPCS Communications, Inc.'s term loan rose as well as it reported financial results.

Also in trading, Georgia-Pacific Corp. and Kinder Morgan Inc. both saw their term loan Bs gain ground as the cash market in general seemed to feel better, and LCDX was seen stronger early in the session before settling in at lower levels on a day-over-day basis.

Lear's term loan posted some additional gains during Friday's market hours as investors continued to react to the company's recently released positive second-quarter results, according to a trader.

The term loan ended the day at 97 bid, 97 5/8 offered, up from Thursday's levels of 96½ bid, 97½ offered, the trader said.

On Thursday morning, the company announced second-quarter numbers that included net income of $123.6 million, or $1.58 per share, compared with a net loss of $6.4 million, or $0.10 per share, for the second quarter of 2006.

Free cash flow was $204 million as compared to $0.8 million in the second quarter of 2006. The improvement reflects primarily the improvement in earnings and lower capital spending.

The company also reported net sales of $4.2 billion and pretax income of $143.9 million, including restructuring costs of $34.8 million and other special items of $3.4 million, whereas for the same period last year, the company reported net sales of $4.8 billion and pretax income of $31.5 million, including restructuring costs and other special items of $24.3 million.

As for full-year 2007, the company said that it now expects net sales of approximately $15 billion, up about $200 million from the prior outlook.

And, core operating earnings for full-year 2007 are expected to be in the range of $600 million to $640 million. This is unchanged from the last full-year outlook provided, but the company now sees earnings at or near the high end of this range.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems.

MetroPCS stronger

MetroPCS' term loan was higher in trading after the company came out with second-quarter numbers, despite the fact that its stock took a hit, according to a market source.

The Dallas-based wireless services provider saw its term loan end the day at 97 bid, 98 offered, up from previous levels of 96½ bid, 97½ offered, the source said.

In sympathy, Leap Wireless International Inc., a San Diego-based provider of wireless services, saw its term loan head up to 96¾ bid, 97¾ offered from prior levels of 96 bid, 97 offered, the source added.

On Friday morning, MetroPCS announced that total revenues for the second quarter were $551 million, an increase of 50% over the second quarter of 2006, and income from operations was $132 million, up 144% over the second quarter of 2006.

Net income was $58 million versus $23 million for the second quarter of 2006, and diluted net income per common share was $0.17, compared with $0.06 per share last year.

In addition, the company recorded second-quarter growth in consolidated adjusted EBITDA of 21% over the first quarter of 2007 and 63% growth when compared to the fourth quarter of 2006.

Despite the improvements, the company's stock fell off by $7.86, or 20.14%, to $31.16 because investors were soured by the addition of only 155,000 subscribers during the quarter.

Georgia-Pacific, Kinder trade up

Georgia-Pacific and Kinder Morgan both saw their institutional term loan debt rise in trading on Friday as the cash market in general had a better tone, according to a market source.

Georgia-Pacific's term loan B ended the day at 95 1/8 bid, 96 5/8 offered, up from 94¼ bid on Thursday, the source said.

Kinder Morgan's term loan B ended the day at 94¾ bid, 95¾ offered, up from 94¼ bid, 95¼ offered on Thursday, the source added.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals. Kinder Morgan is a Houston-based energy infrastructure provider.

LCDX rollercoasters

LCDX seesawed around in Friday's trading, with levels quoted higher early on in the day and then steadily getting lower and lower as the day progressed, according to a trader.

By late day, the index was seen quoted at 93.50 bid, 93.75 offered, down from Thursday's closing levels of 93 7/8 bid, 94 1/8 offered, the trader said.

However, in the morning, LCDX was seen as high as 94 1/8 bid, 94 3/8 offered, the trader remarked.

"The market is a little overdone," the trader said in explanation of LCDX's fall.

"And, equities took a turn for the worse in the afternoon so that may have brought it in," the trader added.

Nasdaq closed the day down 64.73 points, or 2.51%, Dow Jones Industrial Average closed the day down 281.42 points, or 2.09%, S&P 500 closed the day down 39.14 points, or 2.66%, and NYSE closed the day down 248.73 points, or 2.59%.

Production Resource tweaks deal

Moving to the primary, Production Resource Group LLC made some changes to its institutional bank debt, increasing pricing and adding an original issue discount and call protection, according to a market source.

The $325 million first-lien term loan is now priced at Libor plus 350 basis points, up from original guidance in the Libor plus 225 bps to 250 bps area, the source said.

In addition, the term loan is now being sold to investors at a discount of 99, as opposed to at par, and the paper now carries 101 hard call protection for one year, as opposed to no call protection, the source remarked.

Production Resource Group's $400 million credit facility (B1/B+) also includes a $75 million revolver.

Goldman Sachs is the lead bank on the deal, which will be used to help fund the buyout of the company by the Jordan Co. and management.

Production Resource Group is a New Windsor, N.Y., supplier of entertainment technology products, including video, lighting, audio, scenery and automation systems.

Enterprise/EPCO postpone term Bs

Enterprise GP Holdings LP and EPCO Holdings Inc. have postponed syndication of their term loan Bs, but are continuing to syndicate their pro rata tranches and, depending on demand, may end up increasing the pro rata tranche sizes, according to a market source.

As launched, Enterprise's pro rata debt is comprised of a $200 million five-year revolver, and EPCO's pro rata debt is comprised of a $300 million five-year revolver and a $500 million five-year term loan A.

"Final tranching has not yet been determined," the source said, adding that in the case of increased bank demand, the arrangers would consider an upsizing to the pro rata and a downsizing to the institutional.

Enterprise's and EPCO's pro rata tranches are being talked at Libor plus 175 bps, in line with original talk at launch.

The institutional debt that has been postponed because of market conditions includes a $1 billion seven-year term loan B at Enterprise and a $900 million seven-year term loan B at EPCO.

Both term loan B tranches were being talked at Libor plus 200 bps.

Citigroup and Lehman Brothers are the joint lead arrangers on the deals, with Lehman the left lead on the EPCO term loan B and Citi the left lead on everything else.

Proceeds from both senior secured credit facilities (Ba2/BB-/BB) will be used to refinance interim credit facilities at the two Houston-based midstream energy companies.

Hunt postpones loan

Hunt Refining Co. postponed syndication of its in-market $760 million credit facility, but plans to come back with the transaction in early September, according to a market source.

Barclays is the lead bank on the deal.

The facility consists of a $400 million term loan, a $100 million synthetic letter-of-credit facility, a $130 million construction facility and a $130 million revolver.

Price talk on the term loan and synthetic letter-of-credit facility had been in the Libor plus 275 bps area, and price talk on the construction facility and the revolver had been Libor plus 275 bps to 300 bps.

Proceeds will be used to fund the expansion of an existing refinery.

Hunt is a Tuscaloosa, Ala., petroleum refining and marketing company.

Chrysler closes

Cerberus Capital Management, LP completed its acquisition of a majority interest in Chrysler Holding LLC, which consists of Chrysler Financial and Chrysler Corp. LLC, from DaimlerChrysler AG, according to a news release.

To help fund the buyout, Chrysler Financial got a new $8 billion credit facility consisting of a $2 billion five-year ABL revolver (B1/BB-) priced at Libor plus 400 bps; a $4 billion five-year first-lien term loan B (B1/BB-/BBB-) priced at Libor plus 400 bps, with call protection of 103 in year one, 102 in year two and 101 in year three, and that was issued with an original issue discount of 95; and a $2 billion six-year second-lien term loan (B2/CCC+/BB) priced at Libor plus 650 bps, with call protection of 103 in year one, 102 in year two and 101 in year three, and that was also issued with an original issue discount of 95.

During syndication, pricing on the revolver and first-lien term loan B was flexed up from revised talk of Libor plus 300 bps and original talk at launch of Libor plus 275 bps, and pricing on the second-lien term loan was flexed up from revised talk of Libor plus 550 bps and from original talk at launch of Libor plus 500 bps.

Also during syndication, call protection on the first-lien term loan was revised from just 101 in year one to 102 in year one and 101 in year two and then revised again to final terms, and call protection on the second-lien term loan was revised from just 102 in year one and 101 in year two.

Furthermore, the original issue discounts were added to the first- and second-lien term loans, with the first-lien expected at 991/2, then at 99 and then somewhere in the 95 to 96 area, and the second-lien expected at 99, then at 98½ and then somewhere in the 95 to 96 area.

The ABL and the first-lien term loan share the same collateral and the same covenants.

JPMorgan, Citigroup, Goldman Sachs, Bear Stearns and Morgan Stanley acted as the joint bookrunners on the Chrysler Financial deal, with JPMorgan, Citigroup and Goldman Sachs the joint lead arrangers.

Meanwhile, Chrysler Corp. got a new $12 billion credit facility that consists of a $2 billion delayed-draw seven-year second-lien term loan (Caa1/B-/BB+) and a $10 billion first-lien term loan B (B1/B+/BB+).

The second-lien term loan was funded by Cerberus, who took down $500 million, and DaimlerChrysler, who took down $1.5 billion, and the first-lien term loan B was funded by the lead banks.

The second-lien term loan is delayed-draw for 12 months and must fund after that time. Originally, the tranche was expected to be funded at close.

It is anticipated that the banks will bring the first-lien term loan B back to market when conditions improve, but the second-lien term loan will definitely not come back for broad syndication for at least a year.

Before being postponed, the first-lien term loan B was being guided at Libor plus 375 bps, after flexing up from original talk at launch of Libor plus 325 bps, and carried call protection of non-callable for one year then at 101 in year two.

As for the second-lien term loan, that was being talked at Libor plus 700 bps (up from original talk of Libor plus 600 bps), with call protection of non-callable for one year, then at 103 in year two and 101 in year three.

JPMorgan, Goldman Sachs, Citigroup, Bear Stearns and Morgan Stanley are the joint bookrunners on the Chrysler Corp. debt, with JPMorgan, Goldman and Citigroup the joint lead arrangers.

Chrysler Financial is a provider of financial services for vehicles in the NAFTA region. Chrysler Corp. is a producer and seller of Chrysler, Dodge and Jeep vehicles.

Limited Stores closes

Sun Capital Partners completed its buyout of a 75% ownership interest in Limited Stores from Limited Brands Inc., according to a news release.

To help fund the buyout, Limited Stores got a new $75 million credit facility.

Limited Stores is a Columbus, Ohio, retailer of contemporary upscale branded women's apparel through 260 stores in 42 states.

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