Hertz cuts revolver spread; Nasdaq breaks around 101; Portfolio auction grabs attention

By Sara Rosenberg

New York, Dec. 6 - The Hertz Corp. reverse flexed pricing on its asset-based revolving credit facility tranche by 25 basis points on strong demand, and all other tranches of the deal have also been catching investor interest as they have filled up as well.

In secondary doings, The Nasdaq Stock Market Inc. allocated its credit facility, with the term loan B freeing for trading right around the 101 area. And, some traders' focus were tied up elsewhere as bids were due Tuesday on a portfolio of mostly par names that was being auctioned off.

Hertz reduced pricing on its $1.6 billion asset-based revolver (Ba2/NA/BBB) to Libor plus 200 basis points from original talk at launch of Libor plus 225 basis points as the deal has received a nice reception from market players, according to a sellside source.

The company's $2 billion term loan (Ba2/NA/BBB-) and $250 million synthetic letter-of-credit facility (Ba2/NA/BBB-) have also been very well received, with both tranches currently oversubscribed. However, pricing has yet to firm up on these loans with talk remaining at Libor plus 250 to 275 basis points for now, the source added.

Deutsche Bank, Lehman Brothers and Merrill Lynch are the lead banks on the $3.85 billion credit facility, with Deutsche the left lead.

Proceeds from the loan, along with proceeds from a proposed $2.8 billion equivalent bond offering, will be used to help fund the acquisition of Hertz by Clayton, Dubilier & Rice Inc., The Carlyle Group and Merrill Lynch Global Private Equity.

The equity sponsors are purchasing the Park Ridge, N.J, vehicle rental organization from Ford Motor Co. in a transaction valued at $15 billion.

AREP pulls second lien

AREP Oil & Gas LLC has decided to pull its $200 million second-lien term loan from the market as the bank debt was no longer perceived as being economical, according to a market source.

"Pricing was going to have to be raised to a point where it didn't make sense to the company," the source explained. Original price talk on the second-lien term loan had been Libor plus 350 basis points.

The company does, however, plan on reassessing the loan and the bond markets in 2006 to see if it wants to raise this money in one form or another, the source continued.

Although the second lien was pulled, the company is still going forward with the remaining portion of its in-market credit facility - a $500 million revolver that is talked at Libor plus 175 basis points, the source added.

The revolver borrowing base will initially be set at $335 million of availability so AREP Oil & Gas will only be paying fees on that available amount.

Security for the revolver is a first-lien interest in oil and gas reserves.

Citigroup and Bear Stearns are the lead banks on the deal that will be used to refinance existing debt and to fund a dividend payment, with Citi the left lead.

AREP Oil & Gas is an oil and gas exploration company.

Mirant price talk

Talk has it that Mirant Corp. has set price talk on its entire $1.5 billion exit financing credit facility (Ba3) at Libor plus 200 basis points, according to a market source.

The exit facility, which launched with a bank meeting on Monday, consists of an $800 million six-year revolver, a $500 million seven-year term loan and a $200 million pre-funded letter-of-credit facility.

Originally, the deal was expected to consist of a $1 billion revolver and a $500 million term loan, with pricing on the revolver expected at Libor plus 200 basis points if the deal is rated Ba3 or BB- or higher and Libor plus 225 basis points if its rated B1 or B+ or lower, and pricing on the term loan expected at Libor plus 175 basis points if rated Ba3 or BB- or higher and Libor plus 200 basis points if rated B1 or B+ or lower.

JP Morgan, Deutsche Bank and Goldman Sachs are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to fund intercompany restructuring transactions and help pay claims against the consolidated Mirant Americas Generation LLC debtors.

Mirant is an Atlanta-based power company.

Nasdaq trades around 101

Nasdaq Stock Market's credit facility freed for trading during market hours on Tuesday, with the $750 million six-year term loan B quoted by one trader at par ½ bid, 101 offered and by a second trader at par ¾ bid, 101¼ offered.

The term loan is priced with an interest rate of Libor plus 150 basis points.

Nasdaq's $800 million credit facility (Ba2/BBB-) also contains a $50 million five-year revolver with an interest rate of Libor plus 150 basis points.

JPMorgan and Merrill Lynch are the lead banks on the deal, with JPMorgan the left lead.

Proceeds will be used to help fund Nasdaq's purchase of Instinet Group Inc. for a total purchase price of about $1.88 billion in cash, or $5.44 per share. Upon completion of the transaction, INET, Instinet's electronic marketplace, will be combined with Nasdaq's current operations. However, Instinet, The Institutional Broker business, will be acquired by Silver Lake Partners from Nasdaq immediately following the acquisition.

Nasdaq is a New York-based provider of securities listing, trading, and information products and services.

Portfolio auction nabs spotlight

The auction of an approximately $180 million loan portfolio came to a close Tuesday as bids were due and Citigroup was said to have come out on top with the winning bid, according to a market source.

ING was the seller of the portfolio that was comprised primarily of par names, the source added.

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