Navistar floats talk as deal launches; Liberty Cablevision breaks; Allied Waste, Visteon move on earnings

By Sara Rosenberg

New York, Feb. 10 - Navistar International Corp. came out with price talk on its billion dollar-plus unsecured term loan as the deal quickly came to market with a Friday bank meeting.

In the secondary, Liberty Cablevision of Puerto Rico freed up for trading, Allied Waste Industries Inc. headed higher in reaction to firm fourth-quarter results and solid forecasts, and Visteon Corp. saw its bank debt rev up in the morning on newly released financials before settling back in to unchanged levels.

Navistar set opening price talk on its $1.5 billion three-year senior unsecured term loan as the deal was officially launched into syndication during a quickly scheduled Friday bank meeting being that the loan commitment letter had just been signed by the company on Thursday.

The unsecured term loan was presented to lenders with price talk of Libor plus 475 basis points, according to a syndicate document.

The interest rate will increase by an additional 50 basis points at the end of the 12-month period following the date of the first borrowing and by an additional 25 basis points at the end of each subsequent six-month period, according to the commitment letter that was filed with the Securities and Exchange Commission late Thursday.

Credit Suisse and Bank of America are joint lead arrangers on the deal, with Credit Suisse the left lead. J.P. Morgan Chase Bank and Citigroup Global Markets are involved in the deal as well.

Proceeds from the term loan could be used to refinance any or all of the company's outstanding notes that are allegedly in default as the result of a delay in filing its fiscal 2005 annual report. The filing delay is a result of ongoing discussions with outside auditors about a number of complex and technical accounting items.

Last week Navistar received, and is now disputing, notices from the trustee of its existing notes saying that the company has defaulted on its $190 million 2½% senior convertible notes due 2007, $400 million 9 3/8% senior notes due 2006, $250 million 6¼% senior notes due 2012 and $400 million 7½% senior notes due 2011.

All of the bond issues contain provisions that allow the company a cure period from receipt of the notice to file its annual report. The 2½% notes carry a 60-day cure period, while all other notes provide 30 days.

The unsecured term loan commitment expires on Aug. 7.

Navistar is a Warrenville, Ill.-based commercial truck and mid-range diesel engine producer.

Liberty Cablevision wraps around 101

Liberty Cablevision of Puerto Rico allocated its new credit facility, with the $150 million term loan freeing for trading in the par ¾ bid, 101¼ offered context where it also closed out the session, according to traders.

The term loan is priced with an interest rate of Libor plus 225 basis points.

Liberty Cablevision's $160 million credit facility also contains a $10 million revolver with an initial interest rate of Libor plus 225 basis points.

Bank of America and TD Securities are the lead banks on the deal, which will be used to refinance existing debt.

Liberty Cablevision of Puerto Rico is Puerto Rico-based cable company.

Allied Waste trades up

Allied Waste's term loan inched higher during a relatively quiet Friday trading session as investors were pleased with the company's higher-than-expected fourth quarter earnings results and future earnings forecast, according to a trader.

The term loan closed the day quoted at 101 1/8 bid, 101 5/8 offered, the trader said, up about an eighth of a point when compared to previous closing levels.

Late in the day Thursday, Allied Waste announced fourth-quarter results that included diluted earnings per share of $0.15 compared with $0.04 for the same period last year and revenue of $1.468 billion, up $81 million, or 5.9%, from $1.387 billion in the fourth-quarter 2004.

Analysts surveyed by Thomson Financial expected earnings of $0.08 per share on revenue of $1.4 billion for the fourth quarter.

For the full year, Allied Waste reported diluted earnings per share from continuing operations of $0.43 compared with $0.11 for 2004 and revenue of $5.735 billion, up 4% from last year.

As for 2006, the company expects revenue growth of about 4% to 5%, including price growth of 2% to 3% and volume growth of 2% to 3% and operating income of about $900 million to $975 million.

The company also expects cash flow from operations of about $850 million to $900 million in 2006, free cash flow of about $150 million to $200 million and debt repayment of about $100 million to $150 million.

Allied Waste is a Scottsdale, Ariz.-based waste services company.

Visteon sees early gains

Visteon's bank debt generated stronger levels during morning trading hours Friday on the release of fourth-quarter and full-year numbers, but by late day loan quotes had come back in along with the company's stock, according to a trader.

Both the delayed-draw term loan and the funded term loan were up about an eighth in trading early on in the day, but then settled back down to unchanged levels of par 1/8 bid, par 5/8 offered on the delayed-draw and par ¼ bid, par ¾ offered on the funded by the close, the trader said.

The company's stock, meanwhile, had been up by as much as $0.50 after the earnings came out, but like the bank debt, came back in before the close.

For the fourth quarter, Visteon reported net income of $1.338 billion, or $10.25 per diluted share, on total sales of $2.9 billion. By comparison, for the fourth quarter of 2004, the company reported a net loss of $138 million.

For full year 2005, Visteon reported a net loss of $270 million, or $2.14 per share, on total sales of $17 billion. By comparison, for full-year 2004, the company reported a net loss of $1.5 billion.

In addition, the Van Buren Township, Mich.-based automotive supplier raised its estimate for 2006 full-year earnings before net interest expense and the provision for income taxes, to a range of $45 million to $75 million an earlier estimate of $20 million to $50 million, reflecting reduced depreciation and amortization expense estimates.

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