Ford, GM down, Chrysler up; Consumer names fall; LCDX rollercoasters; Venture Transport sets launch

By Sara Rosenberg

New York, March 19 - Ford Motor Co. and General Motors Corp. both saw their term loans weaken during Wednesday's trading hours, but Chrysler Financial Services LLC's first-lien term loan gained ground.

Also in the secondary, consumer names in general came under pressure on recession fears, although Michaels Stores Inc. was better on good cash generation, and LCDX 9 was pretty active with levels moving up earlier in the session and then coming back in as equities sold off.

In other news, Venture Transport Logistics LLC finalized timing on its senior credit facility as invites went out to investors.

Ford and General Motors slid lower in relatively active trading, and Chrysler Financial inched higher on relatively light volume, with some speculating that the difference in technicals between the names played a big part in the movement.

Ford, a Dearborn, Mich.-based automaker, saw its term loan quoted at 80 1/8 bid, 81 1/8 offered, down from 80¾ bid, 81¾ offered, traders said.

General Motors, a Detroit-based automaker, saw its term loan quoted at 87 bid, 88 offered, down from 87 3/8 bid, 88 3/8 offered, traders continued.

And, Chrysler Financial, a provider of financial services for vehicles in the NAFTA region, saw its first-lien term loan quoted at 81 3/8 bid, 82 3/8 offered, up from 80½ bid, 81½ offered, traders reamrked.

"Most likely, a guy was watching [Chrysler], liked it, bought the name and pushed it up. Chrysler's been beaten up more than the rest of the autos," one trader told Prospect News.

"Ford, GM - guys trade bonds versus the bank debt [and] LCDS is more liquid. Chrysler - there's no bonds and LCDS is less liquid, so there's a different technical picture," the trader explained.

"It also depends when these things traded. Cash market was relatively unchanged. Some names up an eighth, some down an eighth, some unchanged. Just depended at what point during the day they were trading," the trader added.

Consumer sector softens

Consumer names took a pretty big hit during Wednesday's market hours with names like Herbst Gaming Inc., Claire's Stores Inc. and OSI Restaurant Partners Inc. trading lower as recession talk circulated, according to a trader.

Herbst, a Las Vegas-based casino and slot route operator, saw its term loan quoted at 68 bid, 69 offered, down about two points on the day, the trader said.

Claire's, a Pembroke Pines, Fla.-based specialty retailer of value-priced jewelry and accessories, saw its term loan B quoted at 75 bid, 76 offered, down from 76 bid, 77 offered, the trader continued.

And, OSI Restaurant Partners, a Tampa, Fla., casual dining restaurant company, saw its loan quoted at 75½ bid, 76½ offered, down about a point and a half on the day, the trader added.

Michaels Stores rises

Michaels Stores, however, was one consumer name that saw an opposite reaction in trading as its term loan was stronger due to the good cash flow generation that the company revealed in its recent earnings announcement, according to a trader.

The term loan was quoted at 82½ bid, 83½ offered, up from 82 bid, 83 offered, the trader said. On Monday, the loan was quoted at 81½ bid, 82½ offered.

In its earnings release on Tuesday, the company said that net cash provided by operating activities in fiscal 2007 was up $111 million to $268 million versus $157 million for fiscal 2006.

The company's cash balance at the end of fiscal 2007 was $29 million, a decrease of $1 million from last year's ending balance of $30 million.

And, capital spending for fiscal 2007 was down $43 million to $100 million, versus $143 million in the prior year.

"It was weak numbers, but the company generated some cash flow. Hoping for cash flow sweep to pay down some of the bank debt. Gave initial comfort, but not sure it'll be able to maintain it at these levels," the trader added.

For the fourth quarter, the company reported total sales of $1.301 billion, a 4.4% decrease from fiscal 2006 fourth quarter sales of $1.361 billion, and net income was $53 million, up from a net loss of $67 million in fiscal 2006, primarily due to the absence of merger-related expenses.

Adjusted EBITDA for the quarter was $266 million or 20.4% of sales.

For full year, total sales were $3.862 billion, an increase of 0.5% from $3.843 billion for the same period last year, and net loss was $32 million, down from net income of $41 million in fiscal 2006.

Adjusted EBITDA for the fiscal year was $587 million or 15.2% of sales, compared to $620 million or 16.1% of sales for fiscal 2006.

For fiscal 2008, the company expects that net cash from operations and adjusted EBITDA will be consistent with fiscal 2007 levels.

Michaels is an Irving, Texas, specialty retailer for the hobbyist and do-it-yourself home decorator.

LCDX bounces around

LCDX 9 was "very active" on Wednesday, with levels trading higher and then moving back down with equities, according to a trader.

The index was quoted at 92.15 bid, 92.25 offered, down from Tuesday's levels of 92.40 bid, 92.50 offered, the trader said. During the session, the index traded as high as 93.05.

"The initial bounce was guys trying to cover some shorts. Came back in by the end of the day as stocks plummeted," the trader explained.

Nasdaq closed down 58.30 points, or 2.57%, Dow Jones Industrial Average closed down 293 points, or 2.36%, S&P 500 closed down 32.32 points, or 2.43%, and NYSE closed down 276.94 points, or 3.14%.

Venture Transport firms timing

Venture Transport Logistics sent out invites to potential lenders announcing the upcoming Tuesday bank meeting for its proposed $200 million senior credit facility, according to a market source.

Previously, it was expected that the deal would launch next week and it was known that Tuesday was the targeted date, but timing had not been firm until now.

The facility consists of a $50 million revolver and a $150 million term loan B, with price talk still to be determined.

GE Capital and CIT are the lead banks on the deal that will be used to help fund acquisitions and refinance existing debt.

Venture Transport, a Welsh, Carson, Anderson & Stowe portfolio company, is a Lafayette, La.-based provider of expedited land transportation and logistics services.

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