Dana lowers DIP pricing; Calpine Canada bonds climb as other issues fall

By Paul Deckelman and Sara Rosenberg

New York, April 6 - Dana Corp. lowered pricing on the $700 million term loan tranche contained in its debtor-in-possession facility by 50 basis points Thursday, with market sources saying that the deal was well received.

Also on the automotive bank debt front, General Motors Corp.'s revolving credit facility loan paper - which had backtracked on Wednesday - was seen on the rebound Thursday.

Outside of the auto world, the bonds of Calpine Corp.'s Canadian financing subsidiary were seen sharply higher - while the bankrupt San Jose, Calif.-based power generating company's other issues were for the most part seen on the downside.

Following the lowered pricing on Dana's DIP facility, that term loan is now priced with an interest rate of Libor plus 225 basis points - down from original price talk at launch of Libor plus 275 bps, a source said.

Dana's $750 million asset-based revolver was left unchanged in terms of pricing, with the spread set at Libor plus 225 bps and the unused fee set at 37.5 bps.

Citigroup, Bank of America and JPMorgan are the lead banks on the $1.45 billion 24-month debtor-in-possession facility (B3/BB-), with Citi on the left.

The bankrupt Toledo, Ohio-based automotive components manufacturer's DIP was supposed to have a tenor of 18 months, but that was recently amended to extend the term to 24 months.

Dana already borrowed the $700 million DIP term loan on March 30 and used the proceeds to refinance its pre-bankruptcy revolver and to pay other pre-bankruptcy obligations, as well as for working capital and general corporate expenses.

In connection with this U.S. DIP transaction, Dana Canada is getting a $100 million Canadian revolver with an interest rate of Libor plus 225 bps.

A junk bond trader meantime saw Dana's 6½% notes due 2008 unchanged on the session, at 79.5 bid, 80.5 offered, while its 5.85% notes due 2015 were at 75 bid, 76 offered, and its 7% notes due 2028 were at 76.25 bid, 77.25 offered, each off half a point on the session.

GM revolver up on buying

Also among the auto names, GM's revolver rebounded during Thursday's market hours, a trader in the bank loan market said, as better buying interest was seen in the name.

The Detroit-based automotive giant's revolver closed out the day quoted in a 96 bid, 97 offered context, up from Wednesday's levels around 94.5 bid, 95.25 offered, the trader said. By comparison, on Tuesday, that revolver had been quoted in the 95.5 bid, 97 offered area.

GM's bank debt has been hopping around recently on continuous rumors that a refinancing may be soon to come. Volatility was also helped by the announcement earlier this week that GM has reached an agreement to sell a 51% stake in its financing arm, General Motors Acceptance Corp.

A bond trader meantime said that GM's benchmark 8 3/8% notes due 2033 were down about half a point at 71 bid, 71.5 offered, while GMAC's 8% notes due 2031 ended the day down ¾ point at 94 bid, 94.5 offered. And it could have been worse - the trader said that those bonds "were down more before but they've come back a bit."

The trader also saw GMAC's 6 7/8% notes due 2012 down half a point at 91.5 bid, 92 offered.

A market source at another shop saw those bonds at 92 bid, which he pegged down ¾ point, while the GM 7 1/8% notes due 2013 were a point lower at 73.

Yet another trader saw GM uunchanged, while the GMAC 8s were "down a bit."

Tower, Collins steady

Among other supplier names, he saw Tower Automotive's 12% notes due 2013 unchanged at 66 bid, 67 offered, with little impact seen from the news Wednesday that the bankrupt Novi, Mich.-based vehicular frames maker had come to an agreement with its retirees on controlling pension and retiree healthcare costs.

Also unchanged, despite news, was bankrupt Troy, Mich.-based automotive interior components company Collins & Aikman Corp. Its 10¾% senior notes due 2011 stayed at 31.75 bid, 32.75 offered and its deeply distressed 12 7/8% subordinated notes due 2012 continued to languish at bid levels around six or seven cents on the dollar - even as Collins said it would exit the interior fabrics business and would cut 1,200 jobs as it tries to get out of bankruptcy.

Collins & Aikman's equally bankrupt crosstown neighbor in Troy, Delphi Corp., was seen on the upside Thursday, with its 6.55% notes due 2006 a point better at 63.25 bid, 64.25 offered. Its 7 1/8% notes due 2029 were ¾ point better at that same level.

Exide higher

A trader saw the bonds of troubled Alpharetta, Ga.-based car battery maker Exide Technologies a point better, at 77 bid, 80 offered, this on top of a two-point gain on Wednesday. He did not know why the bonds were firming.

Calpine diverges

Apart from the auto names, Calpine showed signs of a split personality on Thursday, with the parent company's 8½% notes due 2011 seen down as much as five points on the session, a trader said, at 35.5 bid, 36.5 offered - while the 8½% notes due 2008 issued by its Calpine Canada Energy Finance ULC unit soared to 67 bid, 68 offered, which he called a seven-point gain.

"There's a feeling in the rumor mill that Calpine Canada's paper may achieve a higher claim in bankruptcy," he offered in possible explanation of the sharp divergence.

A market source saw those Canadian Calpine bonds at 67.5 bid, up from 60.75 previously.

Meantime, the rest of the bonds were about 1½ points lower at that shop, with its 8½% notes due 2011 at 36.5 bid, while its 10½% notes due 2006 were at 59.5.

At another shop, a trader said that while the Calpine Canada 81/2s had pushed upward - though he saw them around six points higher at 66 bid, 68 offered - its 7¾% notes due 2009 dropped to 58 bid, 60 offered from 61 bid, 63 offered, while its convertible 4¾% notes due 2023 retreated four points to 34 bid, 36 offered, and its 6% converts due 2014 were down six points at 26 bid, 28 offered.

Yet another trader saw the Canadian bonds 6½ points higher at 66 bid, 68, opining that they "really motored up."

He cited the possibility of "inter-company arguing" between the different classes of bond creditors, "just like we saw with Adelphia [Communications Corp]."

Meanwhile the bankrupt Greenwood Village, Colo.-based cable operator's 10¼% notes due 2011 were two points better at 62 bid, 63 offered, while its 9 7/8% notes due 2007 were a point up at 57.5 bid, 59.5 offered. However, the 8 7/8% notes due 2007 of Adelphia's subsidiary, Arahova Communications Corp. - also known as Century Communications - were seen down two points at 100.5 bid, 101.5 offered. Bondholders of the parent and the subsidiary have been clashing in the courts, each trying to get a higher recovery percentage.

"Adelphia and Century kind of split," a trader said, "but it was a little bit. Nothing crazy."

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