GM rises on exchange offer; Michael Foods breaks; Early market emerges on UPC; Inverness up

By Sara Rosenberg

New York, April 27 - General Motors Corp.'s bank debt gained a couple of points during Monday's trading session after the company announced that it is kicking off an offer to exchange notes for stock.

In more loan news, Michael Foods Inc.'s credit facility allocated and freed up for trading after the original issue discount on the term loan B was finalized earlier in the day.

Furthermore, early market levels surfaced on UPC Broadband Holding BV's term loan T that is expected to allocate on Tuesday, Inverness Medical Innovations Inc.'s first-lien term loan was higher as earnings were better-than-expected and Jarden Corp.'s term loan debt was stronger on some repayment news.

GM rallies with debt swap

General Motors' bank debt took a turn for the better following news that a notes-for-stock exchange offer is taking place in the hopes of completing a restructuring out of bankruptcy, according to traders.

The Detroit-based automaker's term loan was quoted by one trader at 63 bid, 64 offered, up from Friday's levels of 58 bid, 59 offered and from Monday morning's levels of 59 bid, 61 offered, while a second trader had it quoted at 62 bid, 65 offered.

And, the company's revolver was quoted at 53 bid, 55 offered, up from 47½ bid, 49½ offered at the end of last week, the trader added.

On Monday, General Motors said that it is commencing offerings to exchange 225 shares of its common stock for $27 billion of its unsecured public notes.

The exchange offers will expire on May 26.

Consummation of the exchange offers are contingent on various factors including voluntary employee benefit association modifications and U.S. Treasury debt conversion conditions that would result in an at least $20 billion reduction in liabilities.

GM may file if exchange fails

According to General Motors, the exchange offers are a vital component of its overall restructuring plan to achieve and sustain long-term viability.

The company went on to say that if it does not receive prior to June 1 enough tenders of notes to consummate the exchange offers, it expects to file for bankruptcy.

"We are taking tough but necessary actions that are critical to GM's long-term viability," said Fritz Henderson, president and chief executive officer, in a news release.

"Our responsibility is clear - to secure GM's future - and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team," Henderson added.

Michael Foods frees to trade

Michael Foods' credit facility allocated and hit the secondary market late in the day following the final determination of the original issue discount on the term loan B, according to a market source.

The term loan B was quoted at 99 bid, par offered, the source said.

Pricing on the $250 million five-year term loan B is Libor plus 450 basis points with a 2% Libor floor.

The original issue discount firmed up at 96, the tight-end of original talk that was in the 95 to 96 area, the source added.

Michael Foods revolver and A details

Michael Foods' $525 million credit facility (Ba3/BB) also includes a $200 million 31/2-year term loan A and $75 million 31/2-year revolver that are priced at Libor plus 400 bps with a 2% Libor floor, and an upfront fee that at its highest is two points.

Tranche sizes on the transaction just finalized at the end of last week. When the deal was announced, it was disclosed that the term loan A and the term loan B would total $450 million and that each tranche could be a maximum of $275 million, but specific sizes were going to be based on demand.

Proceeds are going to be used to refinance the company's existing credit facility.

Bank of America is the lead bank on the oversubscribed deal.

The credit facility was being marketed primarily to existing lenders and was just launched with a bank meeting last Tuesday.

Michael Foods is a Minnetonka, Minn.-based food processor and distributor.

UPC indicated in the 90s

UPC Broadband's term loan T saw an indicative market of 92 bid, 95 offered surface on Monday as allocations on the transaction are expected to go out by the close of business on Tuesday, according to a market source.

The $500 million term loan T is priced at Libor plus 350 bps.

Proceeds from the term loan T, along with a €1.65 billion term loan S priced at Euribor plus 375 bps, are being used to extend maturities on the company's term loan M, term loan M-5 and term loan N by a maximum of two years, and by rolling into the new tranches, lenders received a 175 bps bump in spread.

Originally, it was said that the company was looking to exchange $750 million of bank debt, but the size of the offer was increased due strong demand.

JPMorgan, Deutsche Bank and TD Securities are the lead banks on the deal.

UPC is a Netherlands-based cable company and a subsidiary of Englewood, Colo.-based Liberty Global, which provides video, voice, and broadband internet services.

Inverness improves

In more trading happenings, Inverness' first-lien term loan saw a bit of a bounce during market hours as first quarter numbers were released, according to traders.

The first-lien term loan B was quoted by one trader at 91½ bid, 93 offered post the company's earnings call, up from Friday's levels of 90 bid, 92 offered. A second trader said that he saw the term loan B at 92 bid late in the day, up from 90½ bid on Friday, adding that he hadn't seen any offers for the debt.

Both traders agreed that the company's second-lien term loan remained unchanged from previous levels at 83 bid, 87 offered.

Inverness posts profit

For the quarter ended March 31, Inverness said it recorded net income of $6.3 million, or $0.01 per diluted common share, compared to net loss of $4.2 million, or $0.05 per diluted common share, last year.

Net revenue for the quarter was $443.9 million compared to net revenue of $372.2 million in the first quarter of 2008.

Inverness is a Waltham, Mass.-based developer, manufacturer and marketer of consumer and professional medical diagnostic products, as well as a range of vitamins and nutritional supplements.

Jarden better on paydown

Jarden's term loan debt was seen at higher levels on Monday as the company announced plans to repay some of its bank debt, according to a trader.

The term loan B-1 and B-2 were quoted at 94½ bid, 96½ offered, up from an offer of 94½ on Thursday, the trader said.

Early in the day, the company revealed that it plans to repay a portion of its senior term loan debt using proceeds from a $250 million senior unsecured notes offering.

Jarden is a Rye, N.Y., provider of niche consumer products, including outdoor products, consumer services and branded consumables.

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