Newsday, Express break; Strategic Materials sets OID; Weather firms spread; Nations Petroleum sets talk

By Sara Rosenberg

New York, July 10 - Newsday LLC's term loan freed up for trading on Thursday morning, with both the fixed- and floating-rate pieces quoted above the discount prices at which they were sold during syndication.

Also, breaking for trading was Express Energy Services' credit facility, with its term loan B seen atop the original issue discount as well.

In other trading news, General Motors Corp.'s term loan was softer with bankruptcy buzz and Harrah's Entertainment Inc. fell on Las Vegas revenue numbers.

Over in the primary, Strategic Materials Inc. came out with original issue discount guidance on its credit facilities, The Weather Channel set pricing on its term loan now that a conference call with select investors has taken place, and price talk on Nations Petroleum LLC surfaced in conjunction with the deal's launch.

Newsday's $650 million of five-year term loan debt (B1/BB+) hit the secondary market early on in the session, with the fixed- and floating-rate tranches trading above their discount prices, according to a trader.

Both the $525 million fixed-rate term loan and the $125 million floating-rate term loan were quoted at 99¼ bid, par offered in the morning and then they moved up to 99½ bid, par ¼ offered, the trader said.

The fixed-rate piece is priced at 9¾% and was sold at 99.035, while the floating-rate piece is priced at Libor plus 550 basis points and was sold at an original issue discount of 99.

Both tranches are non-callable for 2½ years.

During syndication, pricing on the fixed-rate tranche firmed wide of original guidance of 9% to 9¼%, and the amount of fixed-rate debt was downsized as the floating-rate tranche was carved out of the deal based upon investor demand.

Bank of America, Merrill Lynch and Citigroup are the joint bookrunners on the deal that was targeted to both high-yield and loan investors, with Bank of America and Merrill the joint lead arrangers.

Proceeds will be used to help fund Cablevision Systems Corp.'s acquisition of Newsday Media Group from Tribune Co. for $632 million, plus Tribune will also receive $18 million at closing as prepaid rent under certain leases of property used in the business.

Cablevision is buying the business through a new partnership that it is forming. Cablevision will have about 97% and Tribune will have about 3% of the equity in the partnership that will own Newsday.

To form the new partnership, Tribune will contribute the Newsday assets, and Cablevision will contribute newly issued parent company bonds with a fair market value of $650 million on the contribution date.

The completion of this transaction is subject to certain customary closing conditions, including regulatory approval.

Newsday is a daily newspaper serving Long Island and New York City.

Express Energy frees to trade

Express Energy's credit facility allocated on Thursday morning and then broke for trading, with the $325 million first-lien term loan B moving up to 98¾ bid, 99½ offered from opening levels of 98¼ bid, 99¼ offered, according to a trader.

The five-year term loan B is priced in line with original talk at Libor plus 525 bps with a 3.25% Libor floor, was sold at an original issue discount of 98 and carries 101 soft call protection for one year.

Express Energy's $360 million credit facility (B2/B) also includes a $35 million five-year revolver that is priced at Libor plus 525 bps with a 3.25% Libor floor as well.

Credit Suisse and Lehman are the joint lead arrangers on the deal that will be used to help fund Macquarie's purchase of a majority interest in the company.

Leverage is 2.7 times on a run rate basis.

Express Energy is a Houston-based provider of oilfield services.

General Motors slides

General Motors' term loan traded lower on Thursday as rumors over a possibly bankruptcy circulated throughout the market; however, reports later emerged that the company called the speculation inaccurate, according to a trader.

The term loan was quoted at 80 bid, 81 offered, down about half a point to a point on the day, the trader said.

General Motors is a Detroit-based automotive company.

Harrah's weakens

Harrah's term loan B debt lost some ground during the trading session after news surfaced that revenues for Las Vegas casinos were down in May.

The bank debt was quoted at 87 bid, 87½ offered, down from Wednesday's closing levels of 87½ bid, 88 offered, the trader said.

According to the reports, gambling revenue for Las Vegas casinos was down a little more than 16% in May compared to the comparable period last year, the trader added.

Strategic Materials OID guidance

Switching to primary happenings, Strategic Materials revealed the original issue discount talk on its proposed about $135 million credit facilities as the deal was launched with a bank meeting during the session, according to a market source.

All tranches under the credit facility are being offered to investors at an original issue discount in the area of 98½ to 99, the source said.

Price talk on all of the tranches emerged last week at Libor plus 375 bps with a 3% Libor floor.

Tranching on the deal is comprised of a $40 million revolver, a $65 million term loan, a $5 million capex facility, a C$10 million revolver and a C$15 million term loan.

Comerica is the lead bank on the deal that will be used to refinance existing debt.

Strategic Materials is a Houston-based glass processing company.

Weather Channel sets pricing

Weather Channel firmed up pricing on its $1 billion term loan at the wide end of early guidance on the heels of a conference call with select investors that occurred on Wednesday, according to a market source.

The term loan is priced at Libor plus 425 bps with a 3.25% Libor floor and an original issue discount of 97, the source said. Early talk on the deal had been in the area of Libor plus 400 bps to 425 bps with a 3.25% Libor floor and an original issue discount in the range of 97 to 98.

The company's $1.2 billion credit facility also includes a $200 million revolver with pricing still to be determined, the source remarked.

Allocations on the transaction won't go out until next week at the earliest, the source added.

Deutsche Bank and GE Capital Markets are the co-lead arrangers on the credit facility, with Deutsche the left lead.

Proceeds will be used to help fund the acquisition of the company by NBC Universal, Bain Capital and Blackstone Group from Landmark Communications for about $3.5 billion.

Other financing for the buyout is coming from $600 million of senior unsecured notes in a private placement.

Deutsche Bank Securities is the placement agent for the notes and the notes will be placed with private equity sponsors, including GSO Capital Partners, a subsidiary of Bain Capital, and Sankaty Advisors LLC.

In addition, the sponsors plan to put up $2 billion of equity representing about 50% of the capital structure.

Following completion of the buyout, Weather Channel will be operated as a separate entity, based in Atlanta, with management services to be provided by NBC Universal.

The transaction includes The Weather Channel Networks, the third-most distributed cable network, The Weather Channel Interactive, which includes the web site weather.com, and Weather Services International, a weather forecasting provider.

Closing is anticipated to take place by year-end, subject to receipt of customary regulatory approvals.

Nations Petroleum releases talk

Nations Petroleum held a bank meeting on Thursday to kick off syndication on its proposed $325 million term loan, and in connection with the launch, price talk was announced, according to a market source.

The term loan was presented to lenders with talk of Libor plus 750 bps with a 3.25% Libor floor and an original issue discount of 98, the source said.

Call protection on the loan is 103 in year one, 102 in year two and 101 in year three, the source added.

Credit Suisse is the lead bank on the deal that will be used to fund the development of the Lost Hills field in the San Joaquin Valley Basin of Kern County, Calif.

Nations acquired the field in 2006, and is investing over $365 million in Lost Hills to restore and acquire additional leases, build new facilities and steam flood the whole field.

A drilling program commenced in 2007, with the aim of completing 265 new wells to fully develop the lease.

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