Visteon up with numbers; GM dips on GMAC concerns; Capella sets talk; Hudson book building

By Sara Rosenberg

New York, Feb. 14 - Visteon Corp.'s term loan headed higher on Thursday after the company released financial results, General Motors Corp.'s term loan was softer as worries over GMAC LLC were pushed back into investors' minds and LCDX 9 was down with equities.

Over in the primary, Capella Healthcare came out with details on its credit facility as it launched with a bank meeting on Thursday, and Hudson Group's credit facility is coming along as some orders have come in and more are being worked on.

Visteon's term loan traded up during market hours as the company released fourth-quarter and full-year 2007 results that people found to be somewhat positive, according to a trader.

The term loan was quoted at 79 bid, 81 offered, up from 77 bid, 80 offered, the trader said.

For the fourth quarter, Visteon reported a net loss of $43 million, or $0.33 per share, on sales from continuing operations of $2.9 billion. By comparison, for the fourth quarter of 2006, the company reported a net loss of $39 million on sales from continuing operations of $2.8 billion.

The fourth-quarter net loss includes $30 million of non-cash asset impairments and $32 million of restructuring expenses that were not eligible for reimbursement from the escrow account.

EBIT-R for the fourth quarter was $15 million, an improvement of $52 million over the same period of 2006.

The company generated $331 million of cash from operating activities during the quarter, an increase of $92 million, or 38%, compared to the fourth quarter of 2006.

Free cash flow was $187 million for the quarter, an increase of $56 million over last year.

"For the fourth quarter and full year 2007, Visteon delivered on the financial guidance we provided," Michael F. Johnston, chairman and chief executive officer, said in a news release. "We continue to progress with our restructuring activities as planned, and have now completed 18 of the 30 items that are part of our three-year plan. By implementing our restructuring and continuing to improve our operations and global capabilities, we are positioning Visteon for long-term success."

For full-year 2007, Visteon reported a net loss of $372 million, or $2.87 per share, on sales from continuing operations of $11.3 billion. By comparison, for full-year 2006, the company recorded a net loss of $163 million, or $1.27 per share, on sales from continuing operations of $11.3 billion.

The net loss for 2007 includes $107 million of non-cash asset impairments and $32 million of restructuring expenses that were not reimbursed from the escrow account.

EBIT-R for the year was negative $49 million, compared with positive $27 million in the same period of 2006.

Cash provided from operations totaled $293 million, compared with $281 million for full-year 2006.

For full-year 2008, the company expects EBIT-R to be in the range of negative $25 million to positive $25 million on product sales of about $9.7 billion, and free cash flow is projected to be in the range of negative $350 million to negative $250 million.

"The progress Visteon is making, combined with what we will execute in 2008, lays the foundation for Visteon to be free cash flow positive in 2009," Johnston added in the release. "With almost $1.8 billion of cash as of year-end 2007 and additional available liquidity, Visteon has flexibility to execute its plans."

Visteon is a Van Buren Township, Mich.-based automotive supplier.

GM inches lower

General Motors' term loan was a bit weaker on Thursday after news reports emerged about concerns regarding GMAC, according to a trader.

The term loan was quoted at 87½ bid, 88½ offered, down from 87¾ bid, 88¾ offered, the trader said.

According to the reports, Cerberus Capital Management, which owns a 51% interest in the financial services company, said that GMAC may be facing substantial difficulty if the credit markets continue to decline, the trader said.

"It's no big surprise but it's kind of in peoples' faces again," the trader remarked. "Not too much movement [on the loan] because it was mainly expected."

General Motors, a Detroit-based developer, producer and marketer of cars, trucks and parts, own a 49% interest in GMAC.

LCDX slips with stocks

LCDX 9 weakened in trading as equities were down, but cash managed to hold in at pretty much unchanged levels, according to a trader.

The index went out around 91.60 bid, 91.75 offered, down from 91.70 bid, 91.80 offered, the trader said.

As for stocks, Nasdaq closed down 41.39 points, or 1.74%, Dow Jones Industrial Average closed down 175.26 points, or 1.40%, S&P 500 closed down 18.35 points, or 1.34%, and NYSE closed down 105.07 points, or 1.16%.

Meanwhile, the cash market held firm despite the equity sell off. "Gains we saw yesterday were pretty much preserved, which is a positive sign," the trader added.

Capella details surface

Capella Healthcare also launched its credit facility with a bank meeting on Thursday morning, at which time it too came out with pricing details, according to a market source.

The $45 million six-year revolver (B1/BB-) and the $312 million seven-year first-lien term loan B (B1/BB-) are both being talked at Libor plus 350 bps, with a 3.25% Libor floor, the source said.

Revolver pricing will be based on a leverage grid.

The first-lien term loan B is being offered to investors at an original issue discount of 93 and carries 101 soft call protection for one year.

Meanwhile, the $178 million eight-year second-lien term loan (Caa1/CCC+) is being talked at 13%, with an original issue discount of 99, and is non-callable for one-and-a-half years, then at 104, 102 and 101, the source continued.

Citigroup, Bank of America and GE Capital are the lead banks on the $535 million deal, with Citi the left lead.

Proceeds will be used to help fund the acquisition of nine general acute care hospitals from Community Health Systems Inc. for $315 million.

Commitments are due on Feb. 28.

Capella is a Franklin, Tenn., for-profit hospital company.

Hudson nets interest

Hudson Group's credit facility is moving along in terms of syndication as a number of commitments have been placed and "many more" are currently being worked on at initial terms, according to a market source.

"The credit quality is selling even in this tough market," the source added.

The $295 million first-lien credit facility consists of a $60 million revolver and a $235 million first-lien term loan that are both being talked at Libor plus 400 bps, with an original issue discount of 99.

CIT Group is the lead bank on the deal.

The company is also getting a $125 million second-lien term loan that is being led by hedge fund Magnetar and is already spoken for.

Proceeds will be used to help fund Advent International's buyout of the company.

Hudson Group is an East Rutherford, N.J.-based travel retail specialist that operates more than 550 newsstands, bookstores, cafes and specialty retail shops in 69 airports and transportation terminals.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.