Building Materials quoted stronger; LCDX inches higher; Cash firms in light volume

By Sara Rosenberg

New York, Aug. 23 - Building Materials Corp. of America's first-lien term loan was quoted better on Thursday as the paper was helped by a recent investor conference call to continue to rebound from its post-earnings plummet.

LCDX was stronger in the morning on the back of the Countrywide Financial Corp. investment news, and then levels came back in to end the day just a touch better from previous levels. The cash market was higher with extremely light trading volume.

Building Materials first-lien term loan was quoted higher on the heels of an investor call that was held on Wednesday, continuing its post-earnings results rebound, according to a trader.

The first-lien term loan was quoted around 89 bid, 92 offered, compared with Wednesday's quote of around 87 bid, 90 offered, the trader said.

"They put out numbers last week. It was quoted in the mid-80s but it didn't really trade there. There were only buyers at those levels and that's why it's bounced back up," the trader remarked.

"They had a call yesterday and now it's pretty much moved back up to where it was before," the trader continued.

When asked whether the call was to discuss the recently announced earnings results, the trader responded "most likely."

The company's second-lien term loan was quoted at 83 bid, 88 offered on Thursday, a second trader added.

On Aug. 15, the company released second-quarter numbers that included a net loss of $44.48 million, compared with a net gain of $20.23 million last year.

Net sales for the quarter were up to $663.27 million from $535.89 million in the 2006 second quarter.

For the six months ended July 1, the company reported a net loss of $59.77 million, compared with a net gain of $30.58 million for the comparable period last year.

Net sales for the six months were up to around $1.19 billion from around $1.04 billion for the same timeframe in 2006.

Also, this past Wednesday, the company revealed in an 8-K filing that it now estimates the total cost savings from synergies related to its acquisition of ElkCorp and from plant rationalizations previously disclosed to be at a run-rate of approximately $150 million per year by the end of the first quarter of 2008.

As of July 1, the company estimated that it has realized in excess of 30% of these annual cost savings.

Building Materials is a Wayne, N.J.-based building products company.

LCDX trades up

LCDX started Thursday's session with trades going off at noticeably higher levels as investors quickly reacted to Countrywide's equity infusion announcement. However, by the end of the session, the index had come back in most of the way so that its total gain on a day-over-day basis was fairly minimal, according to traders.

The index went out around 95.60 bid, 95.80 offered, up from Wednesday's closing levels of around 95.50 bid, 95.75 offered, traders said. Early on in the session, though, the index traded as high as 961/2.

On Wednesday night, Countrywide said that it has received a $2 billion strategic equity investment from Bank of America that came in the form of a non-voting convertible preferred security yielding 7.25% annually. The security can be converted into common stock at $18.00 per share, with resulting shares subject to restrictions on trading for 18 months after conversion.

"Bank of America's investment in Countrywide represents a vote of confidence and strengthens our balance sheet, enabling us to position Countrywide for future growth and success," Angelo R. Mozilo, Countrywide chairman and chief executive officer, said in a company news release. "This transaction benefits all of Countrywide's constituents, including investors, shareholders, mortgage customers, deposit holders, business partners and employees."

"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," Kenneth D. Lewis, Bank of America chairman and CEO, said in the release. "This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country. We hope this investment will be a step toward a return to a more normal liquidity in the mortgage markets. Countrywide has a strong mortgage origination business and it services the mortgages of one in seven American households."

Last week, Countrywide, a Calabasas, Calif., diversified financial services provider, revealed that it drew down on $11.48 billion under its credit facilities to supplement its funding liquidity position.

The company drew $2.64 billion under its 364-day credit facility with JPMorgan that matures on May 7, 2008, $6.44 billion under its five-year credit facility with JPMorgan due May 10, 2011, $660 million under its 364-day credit facility with Barclays due Nov. 16, 2007, $1.54 billion under its five-year credit facility with Barclays due Nov. 17, 2011, $60 million under its 364-day credit facility with William Street due May 8, 2008 and $140 million under its five-year credit facility with William Street due May 10, 2011.

Cash tone improves

The secondary loan cash market also felt better on Thursday with the Countrywide news, but trading activity was pretty light, according to traders.

"Things jumped in the morning, then came back in with equities, LCDX. On the run stuff is still up like a quarter of a point and everything else may be up an eighth," one trader said.

For example, Kinder Morgan Inc., a Houston-based energy infrastructure provider, saw its term loan B end the day at 95½ bid, 96½ offered, up from around 95¼ bid, 96¼ offered, the trader said.

And, Georgia-Pacific Corp., an Atlanta-based manufacturer and marketer of tissue, packaging, paper, building products and related chemicals, saw its term loan B end the day at 95½ bid, 96½ offered, also up from around 95¼ bid, 96¼ offered, the trader added.

As for equities, at the close, Nasdaq was down 11.10 points, or 0.43%, Down Jones Industrial Average was down 0.25 points, or 0.00%, S&P 500 was down 1.57 points, or 0.11%, and NYSE was up 1.49 points, or 0.02%.

Symbion closes

Crestview Partners, LP completed its buyout of Symbion Inc. for $22.35 in cash per share, according to a news release.

To help fund the transaction, Symbion got a new $350 million senior secured credit facility (Ba3) consisting of a $100 million six-year revolver, a $125 million term loan A and a $125 million seven-year term loan B.

During syndication, the revolver was upsized from $75 million, the term loan A was added to the capital structure, a $25 million seven-year delayed-draw term loan was eliminated from the structure and the term loan B was downsized from $250 million.

In addition, syndication of the term loan B was postponed to the fall, while syndication on the pro rata bank debt continued.

Before being postponed, the term loan was being talked at Libor plus 250 basis points with an original issue discount of 991/2.

Merrill Lynch and Bank of America acted as the lead banks on the deal.

Symbion is a Nashville owner and operator of short-stay surgical facilities.

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