Dollar General moves with numbers; Ford continues to climb; Conseco down with amendment

By Sara Rosenberg

New York, March 24 - Dollar General Corp.'s term loan B-2 was a little better on Tuesday after the company came out with earnings numbers, while the term loan B-1 was higher or just tighter on the day depending on who was asked.

Also in secondary happenings, Ford Motor Co.'s term loan was once again stronger in follow through from the recent news regarding the company's term loan tender offer and Conseco Inc.'s term loan weakened on the back of an amendment announcement.

Dollar General B-2 heads up

Dollar General's term loan debt saw levels move around following the release of quarterly results, with some saying that both the B-2 and the B-1 were stronger, and others placing the B-1 tighter and relatively unchanged.

The term loan B-2 was quoted by one source at 86 bid, 86½ offered, up from Monday's levels of 84 bid, 86 offered, and by a second source at 86 bid, 86½ offered, up from 85 bid, 86 offered.

Meanwhile, the term loan B-1 was quoted by the first source at 88¾ bid, 89½ offered, compared to wider levels on Monday of 88¾ bid, 90¼ offered, by the second source at 88½ bid, 89½ offered, up from levels of 88 bid, 89 offered, and by a third source at 89 bid, 90 offered, compared to 88½ bid, 90 offered during the previous session.

Dollar General increases income

For the fourth quarter, Dollar General reported net income of $81.9 million, up 47.8% from $55.4 million in the 2007 fourth quarter.

Sales for the quarter increased 11.2% to $2.85 billion when compared to $2.56 billion in the prior year.

And, adjusted EBITDA for the quarter was $276.9 million, an increase of 9.3% from $253.3 million in the 2007 quarter.

"We are very pleased with our fourth quarter and fiscal 2008 financial results," said Rick Dreiling, chairman and chief executive officer, in a news release.

"During the year, we grew sales, expanded gross profit and reduced our SG&A rate by successfully implementing programs to improve our store operations and merchandising efforts."

In addition, the company announced on Tuesday that its same-store sales increased 15.1% in February compared to an increase of 4.6% in February 2008.

Dollar General cuts long-term obligations

As of Jan. 30, Dollar General's outstanding long-term obligations, including the current portion, were $4.137 billion, with no borrowings outstanding its asset-based revolving credit facility.

By comparison, as of Feb. 1, 2008, long-term obligations were $4.282 billion and at the closing of its merger on July 6, 2007, long-term obligations were $4.678 billion.

The ratio of long-term obligations to adjusted EBITDA decreased to 4.5 times as of Jan. 30 from 6.3 times as of Feb. 1, 2008 and 7.1 times as of the closing of the merger transaction in July 2007.

Dollar General is a Goodlettsville, Tenn.-based discount retailer.

Ford rise progresses

Ford's term loan continued to trade higher on Tuesday as the market was still reacting to the company's recent announcement that it increased the amount of debt it will buy back in its term loan tender offer, according to a trader.

The Dearborn, Mich.-based automaker's term loan was quoted at 46 bid, 47 offered, up from previous levels of 45 bid, 46 offered, the trader said.

On Monday morning, Ford said that its $500 million Dutch auction cash tender offer for senior secured term loan debt was oversubscribed, and that it is increasing the cash for the tender to $1 billion, which would result in the repurchase of $2.2 billion of the $6.9 billion term debt outstanding.

The price at which the company is buying back the debt is 47. When the tender had been launched, the company was seeking responses from lenders in a price range of 38 to 47.

Conseco softens

Conseco's term loan lost some ground during market hours after news emerged that the company is looking to amend its credit facility, according to a fund manager.

The term loan was quoted at 20 bid, 30 offered, down from Monday's levels of 25 bid, 35 offered, the fund manager said.

Under the amendment proposal, the company is looking to revise and/or waive financial covenants, and in return, pricing on the deal will be increased.

Bank of America is leading the amendment.

Conseco is a Carmel, Ind.-based insurance company.

LCDX holds steady

In more trading happenings, the LCDX 10 index was quoted in relatively the same context as Monday, while the cash market was described as feeling a little firmed with levels up maybe a half a point, according to traders.

The index was seen at 73.30 bid, 73.0 offered, compared to Monday's levels of 73.10 bid, 73.50 offered, traders said.

Meanwhile, stocks were weaker, with Nasdaq closing down 38.58 points, or 2.48%, Dow Jones Industrial Average closing down 115.65 points, or 1.49%, S&P 500 closing down 16.67 points, or 2.03%, and NYSE closing down 121.53 points, or 2.34%.

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