Mold-Masters breaks; Charter, WCI drop on earnings; Tousa slides; RE/MAX sets talk

By Sara Rosenberg

New York, Nov. 8 - Mold-Masters' credit facility allocated and freed up for trading on Thursday, with the first-lien term loan quoted just above its original issue discount price, Charter Communications Inc. and WCI Communities Inc. saw their term loans fall after they both reported disappointing third-quarter numbers, and Tousa Inc.'s bank debt was lower as well.

Also in trading, LCDX and the market in general were weaker, which was particularly noticeable in the airlines sector as names like American Airlines Inc. and UAL Corp. both came in during the session.

In other news, RE/MAX International Inc. came out with price talk on its term loan as the deal was launched to investors during the Thursday session.

Mold-Masters' credit facility hit the secondary market on Thursday, with the $286 million seven-year first-lien term loan quoted at 98¼ bid, 98½ offered, according to a market source.

The first-lien term loan is priced at Libor plus 350 basis points and was sold to investors at a discount of 98.

During syndication, the discount on the first-lien term loan was revised from original guidance in the 99 to 99½ area.

Mold-Masters' $317 million credit facility also includes a $31 million six-year revolver that is priced at Libor plus 350 bps as well.

SocGen is the lead bank on the deal, which will be used to help fund the buyout of the company by 3i.

Other buyout financing will come from an $80 million seller mezzanine facility that wasn't syndicated.

Mold-Masters is a Georgetown, Ont., manufacturer of hot runner systems for the plastic injection molding industry.

Charter earnings send loan tumbling

Charter's term loan B dropped noticeably in trading as the company's third-quarter numbers were viewed by the market as a "disaster," according to a trader.

The term loan B ended the day at 94 bid, 95 offered, down from Wednesday's levels of 95 bid, 96 offered, the trader said.

For the quarter, Charter reported a net loss of $407 million, or $1.10 per common share, compared with a net loss of $133 million, or $0.41 per common share, last year. Third-quarter revenues increased 9.9% and operating costs and expenses increased 10.2% compared to year-ago results.

The company said that despite revenues increasing at a higher rate than operating costs and expenses, net loss increased primarily due to non-recurring gains in the third quarter of 2006 when it recognized a $128 million gain on a debt exchange and a $200 million gain on the sale of discontinued operations.

For the first nine months of 2007, the company reported a net loss of $1.15 billion, or $3.12 per common share, compared with a net loss of $974 million, or $3.04 per common share, in the same period last year. Revenues were $4.45 billion, an increase of 8.8% year over year, and operating costs and expenses were $2.90 billion, an increase of 8.3% from last year.

Charter is a St. Louis-based broadband communication company.

WCI weakens on financials

WCI's term loan dropped in trading on Thursday as investors were not pleased with the third-quarter numbers that were released, according to a trader.

The term loan was quoted all over the place, with the basic range being 94 bid, 96 offered, the trader said. On Wednesday, the term loan went out at 95½ bid, 96½ offered.

For the three months ended Sept. 30, WCI reported a net loss of $69.7 million, compared with net income of $10.7 million in the third quarter of 2006; diluted earnings per share from continuing operations was a loss of $1.66, compared with income of $0.24 for the same period a year ago; and revenues decreased 61% to $166 million from $425.6 million last year.

Also, company gross margin for the quarter was negative $40.6 million versus positive $62.6 million, or 14.7% of revenue, for the third quarter of 2006.

"Demand continues to be unpredictable from week to week and we saw an increase in defaults and cancellations during the third quarter," Jerry Starkey, president and chief executive officer, said in a news release.

"While lower demand and increased defaults have severely hampered our earnings, we continue to expect significant cash flow in the fourth quarter to result in about $210 million to $460 million of cash flow for the full year," Starkey added in the release, which includes $200 million to $450 million from operating activities and $10 million from investing activities.

For the nine-month period ended Sept. 30, the company reported a net loss of $118.8 million compared with net income of $73.6 million during the first nine months of 2006, diluted earnings per share from continuing operations declined to a loss of $3.17 versus income of $1.64 for the same period a year ago, and revenues decreased 51% to $746.5 million from $1.52 billion last year.

WCI also said on Thursday that, following the filing of its quarterly report, it expects to submit an amendment to loan lenders that would provide financial flexibility, including suspension of the fixed charge coverage covenant.

The company was unable to comply with the fixed charge coverage covenant for the quarter ended Sept. 30. This problem was fixed for the short term by a limited waiver that was obtained on Nov. 7 and is effective through Dec. 7.

WCI went on to say that the amendment would be expensive and that there is no assurance that it will be able to comply with the amended covenants and other requirements.

If the company is unable to obtain the amendment or comply with its terms, the lenders would have the right to exercise remedies specified in the loan agreements, including foreclosing on certain collateral and accelerating the maturity of the loans, which could result in the acceleration of substantially all other debt.

WCI is a Bonita Springs, Fla.-based builder of traditional and tower residences in highly amenitized lifestyle communities.

Tousa heads lower

Tousa's first- and second-lien bank debt was also softer during market hours as it followed WCI's lead, according to a trader.

The first-lien term loan was quoted at 96½ bid, 97½ offered, down half a point from previous levels, the trader said.

The second-lien term loan was quoted at 86 bid, 88 offered, down from Wednesday's levels of 87½ bid, 88½ offered, the trader added.

Tousa is a Hollywood, Fla.-based homebuilder.

LCDX softens

LCDX 9 once again traded lower as it continued to follow the primarily seen negative momentum in equities, according to a trader.

The index went out at 96.30 bid, 96.40 offered, down from 96.55 bid, 96.70 offered, the trader said.

As for stocks, Nasdaq closed down 52.76 points, or 1.92%, Dow Jones Industrial Average closed down 34.55 points, or 0.26%, and S&P 500 closed down 0.85 points, or 0.06%. However, NYSE managed to close up 47.32 points, or 0.48%.

Airlines down with market

The airline sector in general definitely took a hit during trading, with some saying that the softness was due to the overall market being down as opposed to anything specific to airlines.

American Airlines, a Fort Worth, Texas-based airline company, saw its term loan B quoted at 96 bid, 96¾ offered, down about half a point from previous levels, one trader said.

UAL, a Chicago-based airline company, saw its term loan B end the day at 94 bid, 95 offered, down from 94½ bid, 95½ offered, a second trader added.

RE/MAX price talk

Moving to the primary market, RE/MAX held a conference call on Thursday to kick off syndication on its $265 million five-year senior secured term loan, and in connection with the launch, price talk was announced, according to a market source.

The term loan is being talked at Libor plus 350 bps, with an original issue discount of 99, the source said.

Citigroup is the lead bank on the deal.

Proceeds will be used to refinance $260 million in funded term loan debt that was used to finance the acquisitions of RE/MAX of California and Hawaii and RE/MAX of Carolina and Florida.

The debt that is being refinanced was obtained earlier this year and consists of a $145 million eight-month funded term loan B and a $155 million eight-month delayed-draw term loan (not fully funded) that are both priced at Libor plus 175 bps. The delayed-draw term loan has a 50 bps undrawn fee.

RE/MAX is a Denver-based real estate company.

Houghton guidance emerges

Price talk on Houghton International Inc.'s credit facility surfaced now that the deal was launched with a bank meeting on Wednesday.

Both the $40 million revolver and the $160 million term loan are being talked at Libor plus 375 bps, the source said.

The term loan is being offered to investors with an original issue discount of 991/2, the source added.

Bank of Ireland and GE Capital are the lead banks on the $200 million deal, with Bank of Ireland the left lead.

Proceeds will be used to help fund the buyout of the company by AEA Investors LLC.

Houghton International is a Valley Forge, Pa., manufacturer and supplier of industrial fluids and chemical management services.

Enterprise closes

Enterprise GP Holdings LP's $850 million seven-year senior secured term loan B became effective on Thursday, according to a company news release.

The term loan B is priced at Libor plus 225 bps, was sold at an original issue discount of 99 and carries 101 call protection for one year.

Citigroup and Lehman acted as the lead banks on the deal.

Proceeds were used to refinance borrowings outstanding under the partnership's $850 million term loan A-2 that had a maturity date in May 2008.

Enterprise is a Houston-based midstream energy company.

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