Ameritrade breaks above par; Visteon trades up on Ford numbers; Kodak stronger on better buyers

By Sara Rosenberg

New York, Jan. 23 - Ameritrade Holding Corp. allocated its credit facility Monday, with the term loan B freeing for trading atop par. In other secondary happenings, Visteon Corp.'s bank debt headed higher as Ford Motor Co. releases higher-than-expected earnings numbers and Eastman Kodak Co. inched higher on good buying interest.

Ameritrade allocated its credit facility during Monday's market hours, with the $1.65 billion seven-year term loan B opening for trading at par 3/8 bid, par ¾ offered and then moving up on the bid side to par ½ bid, while remaining at par ¾ offered by the close, according to a trader.

The term loan B is priced with an interest rate of Libor plus 150 basis points. Pricing on the tranche was reverse flexed last week from Libor plus 175 basis points on strong demand.

Ameritrade's $2.2 billion credit facility (Ba1/BB/BB) also contains a $250 million six-year term loan A and a $300 million five-year revolver, with both of these pro rata tranches priced with an interest rate of Libor plus 150 basis points.

Citigroup is the lead bank on the deal that will be used to help fund the acquisition of TD Bank Financial Group's U.S. brokerage business, TD Waterhouse. The combined company will operate under the name TD Ameritrade.

Under the transaction agreement, in exchange for the U.S. brokerage business, TD Bank will receive approximately 32% ownership in TD Ameritrade and Ameritrade shareholders will receive a special cash dividend of $6.00 per share.

Ameritrade is an Omaha, Neb.-based provider of securities brokerage services and technology-based financial services.

Visteon up on Ford results

Visteon's bank debt traded up by about a quarter of a point as it was given a boost by Ford's release of higher-than-expected earnings numbers, according to a trader.

Visteon's bank debt closed the session quoted at 101 bid, 101½ offered, the trader said.

On Monday morning, Ford announced fourth-quarter and full-year 2005 financial results and outlined a plan to restore profitability to its automotive business in North America.

In the fourth quarter, the Dearborn, Mich., automotive company reported net income of $124 million, or $0.08 per share, compared to net income of $104 million, or $0.06 per share, in 2004. Excluding special items, fourth-quarter after-tax income from continuing operations totaled $511 million, or $0.26 per share, compared to $554 million, or $0.28 per share, a year ago.

Total sales and revenue in the fourth quarter were $47.6 billion, compared to $44.9 billion in the year-ago period.

Full-year 2005 net income was $2 billion, or $1.04 per share, compared to $3.5 billion, or $1.73 per share in 2004. Excluding special items, 2005 full-year after-tax income from continuing operations totaled $2.5 billion, or $1.28 per share, compared to $4.3 billion, or $2.11 per share, excluding special items, in 2004.

Full-year sales and revenue for 2005 was $178.1 billion, up from $171.7 billion a year ago.

As for the plan to restore profitability to its automotive business in North America, targets include material cost reductions of at least $6 billion by 2010, reducing capacity by 1.2 million units, or 26%, by 2008 and reducing plant-related employment by 25,000 to 30,000 people by 2012, in addition to salaried personnel reductions and a reduction in the company's officer ranks.

Meridian is a Dearborn, Mich., auto parts company. Visteon is a Van Buren Township, Mich., automotive supplier.

Kodak trades up

Eastman Kodak's bank debt traded up by about an eighth of a point amid good flow on Monday as better buyers were seen in the market, according to a trader.

The funded term loan closed the day quoted at par 3/8 bid, par 5/8 offered, the trader said.

"The market felt firm as a whole today," the trader explained. "It had a better bid."

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

UAL cuts spread

UAL Corp. reverse flexed pricing on its $3 billion six-year exit facility (B1/B+) by 75 basis points and shifted $100 million of funds out of its revolver tranche and into its term loan tranche, according to a market source.

The revolver is now sized at $200 million, down from an original size of $300 million, and pricing on the tranche came down to Libor plus 375 basis points from original price talk of Libor plus 450 basis points, the source said.

Meanwhile, the term loan is now sized at $2.8 billion, up from an original size of $2.7 billion, and pricing on this tranche also dropped down to Libor plus 375 basis points from original price talk of Libor plus 450 basis points, the source added.

The revolver has a 50 basis point commitment fee.

Financial covenants under the credit facility include a maximum fixed charge coverage ratio of 0.90:1.00 for the 12-month period ending December 2006 that gradually increases all the way up to 1.20:1.00 for the 12-month period ending December 2009 and thereafter.

In addition, there's a covenant that requires the company to maintain at least $1.2 billion of unrestricted cash, which then reduces to $1 billion after Dec. 31 if the company is in compliance with the fixed charge coverage ratio.

JPMorgan and Citigroup are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan the left lead. General Electric Capital Corp. is the syndication agent.

Proceeds will be used to repay the company's debtor-in-possession facility, to make other required payments, to finance the working capital needs and for other general corporate purposes.

The Elk Grove Township, Ill., airline carrier anticipates exiting from Chapter 11 in February 2006.

NRG tweaks include upsizing

NRG Energy Inc.'s recent round of credit facility changes included, in addition to the reverse flex in institutional pricing, upsizing the total size of the credit facility to a $5.575 billion senior secured credit facility (Ba2/BB-/BB) from $5.2 billion through an increase in the term loan B size, according to a market source.

The seven-year term loan B is now sized at $3.575 billion, up from $3.2 billion, the source said. And, as was previously reported, pricing on this tranche was cut to Libor plus 200 basis points from Libor plus 225 basis points. Furthermore, a step down in pricing was added under which the spread can drop to Libor plus 175 basis points when leverage falls below 31/2x.

NRG also reverse flexed pricing on its $1 billion five-year synthetic letter-of-credit facility to Libor plus 200 basis points from Libor plus 225 basis points, with the addition of the step down to Libor plus 175 basis points when leverage falls below 31/2x, this past Friday, the source continued.

The company's $1 billion five-year revolver remained priced at Libor plus 200 basis points with a 50 basis point undrawn fee.

Morgan Stanley and Citigroup are joint lead arrangers and joint bookrunners on the deal, with Morgan Stanley on the left.

Co-managers on the deal include Lehman Brothers, Goldman Sachs, Credit Suisse, Bank of America, Deutsche Bank and Merrill Lynch.

Senior managing agents on the deal include CIT, Commerce Bank, General Electric Capital Corp., ING and Royal Bank of Scotland.

Proceeds from the credit facility will be used to help finance NRG's acquisition of Texas Genco LLC.

Princeton, N.J.-based energy company, NRG, announced in early October that it will pay $5.8 billion for Houston-based Texas Genco, $4 billion in cash and $1.8 billion in NRG shares representing about 25% of the combined company's stock.

Hart-Scott-Rodino clearance and approvals from the Federal Energy Regulatory Commission and Nuclear Regulatory Commission have already been received for the acquisition, resulting in a target closing timeframe for the week of Jan. 30.

AMC reverse flexes

AMC Entertainment Inc. reduced pricing on its $650 million term loan late last week to Libor plus 212.5 basis points from original price talk at launch of Libor plus 250 basis points, according to a market source.

Pricing on the company's $200 million revolver was left unchanged at Libor plus 175 basis points, the source added.

Citigroup Global Markets Inc., JPMorgan Chase Bank and Credit Suisse are the lead banks on the $850 million senior secured credit facility (Ba3/B+/BB).

The facility is being obtained in connection with AMC's merger with Loews Cineplex Entertainment Corp., and proceeds will be used to refinance both Loews' and AMC's existing senior secured credit facilities.

Under the agreement, Marquee Holdings, AMC's current holding company, which is controlled by affiliates of J.P. Morgan Partners LLC and Apollo Management LP, will continue as the holding company for the merged company. The current stockholders of LCE Holdings Inc., Loew's current holding company, including affiliates of Bain Capital Partners, The Carlyle Group and Spectrum Equity Investors, would hold about 40% of the outstanding capital stock of the continuing holding company.

The merged theatrical exhibition company will be called AMC Entertainment and will be based in Kansas City, Mo.

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