Huntsman softens with numbers; Mueller Water holds steady; TNS reaches oversubscription

By Sara Rosenberg

New York, Nov. 4 - Huntsman Corp.'s term loan C was weaker following the company's release of third-quarter numbers that showed an increase in net loss on a year-over-year basis, and Mueller Water Products Inc.'s term loans remained firm with its quarterly results.

In other news, TNS Inc.'s credit facility has more than filled out ahead of the upcoming Thursday commitment deadline and plans are to give out allocations on the deal early next week, and it looks like CF Industries Holdings Inc.'s proposed credit facility may not happen since Terra Industries Inc. turned down the company's latest acquisition proposal.

Huntsman slides

Huntsman's term loan C headed lower after the company announced earnings that included a larger net loss and a drop in revenues when compared to last year's results, according to traders.

The term loan C was quoted by one trader at 90 1/8 bid, 90 5/8 offered, down from 92 bid, 92½ offered, and by a second trader at 90 3/8 bid, 91 1/8 offered.

Meanwhile, the company's term loan B was quoted by the second trader at 90 bid, 90¾ offered versus 90 bid, 92 offered on Tuesday.

For the third quarter, Huntsman reported a net loss of $68 million, or $0.29 loss per diluted share, compared to a net loss of $20 million, or $0.09 loss per diluted share, last year. In the second quarter 2009, the company reported net income of $406 million, or $1.51 per diluted share.

Adjusted net loss for the quarter was $55 million or $0.24 loss per diluted share, compared to adjusted net loss of $2 million, or $0.01 loss per diluted share, in the previous year. Second quarter of 2009 adjusted net loss was $64 million, or $0.27 loss per diluted share.

And, revenues for the quarter were $2.108 billion, a decrease of 23% compared to $2.731 billion for the third quarter of 2008. Second quarter 2009 revenues were $1.866 billion.

Huntsman EBITDA improves

Also on Wednesday, Huntsman revealed that its adjusted EBITDA for the third quarter was $200 million, compared to $194 million in the previous year. Second quarter 2009 adjusted EBITDA was $96 million.

As of Sept. 30, the company had $2.412 billion of combined cash and unused borrowing capacity compared to $1.291 million at Dec. 31, 2008.

The company went on to say that it intends to substantially reduce the committed amount of its $650 million revolving credit facility that matures in August 2010.

In addition, on Oct. 16, the company terminated its existing 364-day accounts receivable securitization program that was scheduled to mature November 2009 and replaced it with two new multi-year securitization programs: a U.S. program and a European program.

The U.S. program contains a committed amount of $250 million, of which $125 million is for three years at Libor plus 375 basis points and $125 million for two years at the commercial paper rate plus 350 bps, while the European program contains a committed amount of €225 million for two years at Euribor plus 375 bps.

Huntsman is a Salt Lake City, Utah-based manufacturer and marketer of differentiated chemicals.

Mueller firm on numbers

Mueller Water Products was another company to release quarterly earnings on Wednesday, but, unlike Huntsman, its term loan debt was steady on the news, according to a trader.

Mueller's term loan A was quoted at 98 bid, par offered and its term loan B was quoted at 98½ bid, par offered, with both tranches unchanged on the day, the trader said.

For the fiscal fourth quarter ended Sept. 30, the company had a net loss of $10.9 million, or $0.09 per share, compared to net income of $17.6 million, or $0.15 per share, last year.

Net sales for the quarter were $374.8 million, down 24.6% compared to $496.9 million for the 2008 fourth quarter.

And, adjusted EBITDA was $36.7 million in the quarter, compared to $72.3 million in the previous year.

Also, during the quarter, the company reduced its total debt by $221 million to $740.2 million and generated free cash flow of $36.6 million.

Mueller Water is an Atlanta-based manufacturer and marketer of infrastructure and flow control products for use in water distribution networks and treatment facilities.

TNS overfills ahead of deadline

Over in the primary market, TNS' $400 million credit facility (BB) is 1.5 times oversubscribed and it may even end up being more like two times over before the books are closed on Thursday, according to a market source.

The facility consists of a $75 million five-year revolver and a $325 million six-year term loan B, with both tranches talked at Libor plus 400 bps with a 2% Libor floor.

Pricing on the term loan B will be able to step down to Libor plus 350 bps if corporate ratings are upgraded to 4-B status and leverage is below 1.5 times.

The original issue discount on the term loan B is talked at 981/2.

Allocations on the deal are expected to go out on Monday, the source added.

TNS refinancing loan

Proceeds from TNS' credit facility will be used to refinance an existing senior credit facility, comprised a $15 million undrawn revolver and $363.5 million in term loan debt.

Included in the existing term loan debt is a $230 million incremental term loan that the company obtained a few months ago at Libor plus 600 bps with a 3.5% Libor floor and 101 soft call protection for one year. Investors were offered the loan at an original issue discount of 90.

SunTrust is the lead bank on the deal that is being done on a best-efforts basis.

TNS is a Reston, Va.-based provider of business-critical, cost-effective data communications services for transaction-oriented applications.

CF Industries deal fading away

CF Industries' proposed $1.3 billion senior secured credit facility may not ever see the light of day since Terra Industries has once again rejected the company's buyout offer.

Terra Industries said on Wednesday morning that the acquisition proposal is inadequate, opportunistic and not in the best interests of the company and its shareholders.

In response, CF Industries said that it made a full, fair and compelling offer, which provides Terra stockholders with certainty of value and closing.

Under the turned down proposal, CF Industries was offering to acquire Terra for $32 in cash and 0.1034 of a share of CF Industries common stock for each Terra share.

CF Industries financing details

To fund the acquisition of Terra, CF Industries received a commitment from Morgan Stanley for a $1 billion five-year term loan B and a $300 million five-year revolver, with both tranches priced at Libor plus 375 bps with a 2.25% Libor floor and an original issue discount of 98.

The company was also planning to sell $1.2 billion of senior secured notes.

As a backup for the bonds, the company received a commitment for a $1.2 billion one-year senior secured bridge loan initially priced at Libor plus 500 bps and increasing by 50 bps 30 days later and every 30 days thereafter. There is a 2.5% Libor floor on the bridge loan.

CF Industries is a Deerfield, Ill.-based manufacturer and distributor of nitrogen and phosphate fertilizer products. Terra is a Sioux City, Iowa-based producer and marketer of nitrogen and methanol products for agricultural and industrial markets.

Grocery Outlet wraps upsized deal

Grocery Outlet Inc. completed its $175 million credit facility after upsizing the deal from $165 million and reducing the Libor floor to 2.5% from 2.75%, according to a market source.

The facility now consists of a $155 million term loan, up from $145 million, and a $20 million revolver.

Pricing on both tranches finalized in line with initial talk at Libor plus 575 bps.

Societe Generale and Bank of Scotland acted as the lead banks on the facility that funded on Tuesday.

The deal was done in connection with an equity investment by Berkshire Partners LLC.

Grocery Outlet is a Berkeley, Calif.-based value grocery retailer.

Language Line closes

Language Line Holdings Inc. closed on its $575 million credit facility (Ba3/B+), according to a news release.

The facility consists of a $50 million five-year revolver and a $525 million six-year term loan, with both tranches priced at Libor plus 350 bps with a 2% Libor floor.

The term loan was sold at an original issue discount of 99.

During syndication, price talk firmed at the high end of the initial Libor plus 325 bps to 350 bps talk and a 50% excess cash flow sweep was added to the structure.

Bank of America, Credit Suisse and Morgan Stanley acted as the lead banks on the deal that was used to refinance existing debt.

Language Line is a Monterey, Calif.-based provider of language-based services.

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