GM rally progresses; Ford, Chrysler follow suit; Unvision, First Data move on earnings

By Sara Rosenberg

New York, May 15 - General Motors Corp.'s bank debt continued to head higher during Friday's market hours with the chatter attributing the two-day run-up to speculation over what would happen to the loans if the company were to file for bankruptcy.

Also in the secondary market, Ford Motor Co.'s bank debt gained a couple of points as well, probably just in sympathy with General Motors' recent performance, and Chrysler Financial Services LLC's bank debt was also better as the company held a lender call.

In more trading happenings, Univision Communications Inc.'s term loan B rose following the release of financial results, First Data Corp.'s term loan B-2 weakened on its earnings news, Las Vegas Sands Corp.'s strip of institutional debt gained on talks of a possible initial public offering and the LCDX 12 index slipped slightly lower.

General Motors up some more

General Motors' bank debt was stronger by another few points during the trading session with talk being that some investors are thinking they might be facing a par paydown in the not-so-distant future, according to traders.

The Detroit-based automotive company's term loan was quoted at 70 bid, 71 offered, up from 66 bid, 68 offered, and the revolver was quoted at 70 bid, 71 offered, up from the low-60 context, one trader said.

Meanwhile, a second trader had the term loan at 70 bid, 71½ offered, up from 66 bid, 68 offered, and the revolver at 70 bid, 72 offered, up from 63½ bid, 65½ offered.

By comparison, on Wednesday, the term loan was quoted around the 58½ bid, 61 offered area and the revolver was quoted in the 54 bid, 56 offered area.

"Revolver used to trade around two points back from the term loan. Now we see them on top of each other," the first trader remarked.

General Motors may see repayment

According to one trader, General Motors has been on the rise since Thursday afternoon after news leaked out that there was a lawyer call with some group of lenders to talk about what's going to happen to the term loan and the revolver if the company files for bankruptcy.

The trader went on to say that one of the scenarios discussed on the call was that the government might take the term loan and revolver out at par.

As a result of this potential par repayment, the term loan and revolver have been rallying, and the revolver is now trading in line with the term loan, the trader added.

General Motors fate decided soon

Whether General Motors is going to file for bankruptcy is expected to be revealed within the next few weeks.

In April, the company launched offerings to exchange 225 shares of its common stock for $27 billion of its unsecured public notes.

If, prior to June 1, the company does not receive enough tenders of notes to consummate the exchange offers, it expects to seek relief under the U.S. Bankruptcy Code.

This relief may include seeking bankruptcy court approval for the sale of most or substantially all assets to a new operating company and a subsequent liquidation of the remaining assets, pursuing a plan of reorganization, or seeking another form of bankruptcy relief.

In an S-4/A filed with the Securities and Exchange Commission late Wednesday, General Motors said that it currently believes that if it pursues one of the alternatives. a sale would be the most likely.

Ford also strengthens

Ford's term loan saw an improvement on Friday as well, with some saying that it was likely just following General Motors since there was no news specific to the credit.

The term loan was quoted by one trader at 65 bid, 67 offered, up from 62¾ bid, 63¾ offered.

A second trader had the term loan quoted at 67 bid, 68 offered, up from 65 bid, 66 offered, and the revolver quoted at 58 bid, 60 offered, up from 54 bid, 55 offered.

Ford is a Dearborn, Mich.-based automotive company.

Chrysler Financial rises, too

Chrysler Financial's first-lien term loan and revolver also saw a noticeable gain during the trading session, according to a trader.

The first-lien term loan was quoted at 85 bid, 86 offered, up from 81½ bid, 82½ offered, and the revolver was quoted at 84 bid, 85 offered, up from 79 bid, 80 offered, the trader said.

On Friday, the company held a lender call to discuss financial results.

"Traded up before, during and after the call," the trader remarked. "Could be moving with GM and Ford, or on its own because of this call."

Chrysler Financial is a provider of financial services for vehicles.

Univision up with numbers

Univision's term loan B headed up in trading after the company released first-quarter results that showed a decrease in net loss and an improvement in OIBDA, according to a trader.

The term loan B was quoted at 67¼ bid, 68¼ offered, up from 64 bid, 65 offered, the trader said.

For the first quarter, Univision reported net loss of $55.2 million, compared to net loss of $166.2 million in the first quarter of 2008.

OIBDA for the quarter was $153.8 million versus $148.6 million in the 2008 first quarter.

And, net revenue for the quarter was $410.3 million, down 12% to from $466.4 million in the comparable period last year.

Univision is a Los Angeles-based Spanish-language media company.

First Data dips on results

Also coming out with first-quarter earnings on Friday was First Data, although its term loan B-2 fell on the news being that the company's net loss increased, and revenues and EBITDA were down, according to a trader.

The term loan B-2 was quoted at 70¾ bid, 71¼ offered, down from Thursday's levels of 72½ bid, 73½ offered, the trader said.

For the first quarter, First Data saw a net loss of $231.3 million, compared to a net loss of $221.7 million in the prior year's first quarter.

Revenues for the quarter were $2.076 billion, down 2% from $2.127 billion in the comparable period last year.

And, EBITDA for the quarter was $490.5 million, down 15% from $574.7 million in the first quarter of 2008.

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

Las Vegas Sands gains

In more trading happenings, Las Vegas Sands's strip of term loan debt was better in trading on rumors that the company may do an initial public offering to spin off its Macau assets, according to traders.

The strip of term loan was quoted at 69 bid, 70 ½ offered, up from Thursday's levels that were in the context 66 bid, 69 offered, traders said.

Las Vegas Sands is a Las Vegas-based developer of multi-use integrated resorts.

LCDX softens

The LCDX 12 index was a touch weaker on Friday as stocks were a little lower on the day, according to a trader.

The index was quoted at 81.25 bid, 81.75 offered, down from 81.70 bid, 82 offered, the trader said.

Nasdaq closed down 9.07 points, or 0.54%, Dow Jones Industrial Average closed down 62.68 points, or 0.75%, S&P 500 closed down 10.19 points, or 1.14%, and NYSE closed down 70.56 points, or 1.23%.

Nalco closes

In other news, Nalco Holding Co. closed on its $1 billion credit facility, consisting of a $750 million seven-year term loan B and a $250 million five-year revolver, according to a news release.

The term loan B is priced at Libor plus 350 basis points with a 3% Libor floor, and it was sold to investors at an original issue discount of 971/2.

During syndication the term loan B was upsized from $500 million due to strong demand.

Deutsche Bank, Bank of America and HSBC acted as the joint lead arrangers on the term loan B. Those three banks plus BMO were also the joint bookrunners.

The revolver was supplied by a consortium of seven banks.

Nalco refinancing debt

Proceeds from Nalco's new credit facility were used to help to refinance the majority of a term loan due in November 2010, replace a revolver that would have expired in November 2009, and will be used to retire $475 million of senior notes otherwise due in November 2011.

Other funds for the refinancing are coming from cash on hand and $500 million of senior notes that carry a coupon of 8¼% and were priced to yield 8 5/8%.

The bond offering was upsized from $300 million during its marketing period.

Nalco is a Naperville, Ill.-based provider of water treatment and process improvement products and services.

Level 3 closes

Level 3 Financing Inc. closed on its $60 million add-on term loan (B+) due March 13, 2014 that is priced at Libor plus 850 bps with a 3% Libor floor, according to an 8-K filed with the SEC.

Lenders paid 101 for the add-on.

Bank of America acted as the lead bank on the deal.

Proceeds are being used for general corporate purposes.

Level 3 is a Broomfield, Colo.-based provider of fiber-based communications services.

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