Dresser sets bank meeting for $1.15 billion term loan, AMD paper down on lower revenue forecast

By Paul A. Harris

St. Louis, April 9 - A quiet Monday session saw timing firm on four of the deals known to be in the leveraged loan market, including the Dresser Inc. $1.15 term loan.

Meanwhile in the secondary market, the paper of Advanced Micro Devices, Inc. traded off as the company issued a first quarter revenue warning.

Dresser sets bank meeting

Dresser Inc. will hold a bank meeting on Thursday for its $1.15 billion first-lien term loan and its $750 million second-lien PIK term loan.

Lehman Brothers, Morgan Stanley, Credit Suisse and UBS, are the bookrunners. Lehman is the left lead.

The Dallas-based engineering firm will use the proceeds to help fund the buyout by Riverstone Holdings LLC, First Reserve and Lehman Brothers Co-Investment Partners.

Oceania Cruises sets structure

Elsewhere in the primary market, Miami-based Oceania Cruises Inc. will hold a bank meeting on Wednesday for its $415 million credit facility.

The upper-premium cruise line plans to put in place a $40 million revolver, a $300 million first-lien term loan and a $75 million second-lien term loan.

Pricing remains to be determined. Moody's Investors Service has rated the first-lien debt B1 and the second-lien tranche Caa1.

Lehman Brothers and UBS are leading the LBO deal.

Smart & Final timing

In other primary market news, Smart & Final Inc. will hold a Thursday bank meeting for its credit facilities backing the LBO of the company by Apollo Management, LP.

The deal, which is being led by Bank of America, Bear Stearns and Credit Suisse, is comprised of a $360 million first-lien term loan, $160 million of which will be designated as delayed draw. In addition, Smart & Final will put in place a $175 million four-year second-lien PIK toggle term loan and a $150 million asset-based revolver.

The company is a City of Commerce, Calif., operator of non-membership warehouse stores for food and foodservice supplies.

Iasis plans holdco PIK loan

Finally, Iasis Healthcare LLC will hold a bank meeting on Wednesday for its $300 million seven-year senior unsecured holdco PIK loan.

Bank of America and Citigroup are leading the dividend deal.

The Franklin, Tenn., owner and operator of medium-sized acute care hospitals is also in the market with a new $829 million senior secured credit facility that is comprised of a $439 million seven-year term loan, a $150 million seven-year delayed-draw term loan, a $200 million six-year revolver and a $40 million seven-year synthetic letter-of-credit facility.

AMD lower on revenue warning

A revenue warning from Sunnyvale, Calif.-based AMD caused the chip-maker's loan paper and loan CDS to trade lower on Monday, according to sources.

The company announced on Monday that its revenues declined sharply quarter-over-quarter for its computing solutions segment, primarily due to lower overall average selling prices and significantly lower unit sales, especially in the resale channel.

In its press release, AMD stated that it plans to restructure its business model to increase operational efficiencies and lower its operating cost structure. AMD will reduce 2007 capital expenditures by approximately $500 million, which the company believes will not materially impact capacity plans for the year. AMD will also significantly reduce discretionary expenses and limit hiring to critical positions.

Before the mid-day mark, one source spotted the company's loan trading at 100 bid, 100.25 offered while another shop had it at 100.125 bid, 100.50.

A leveraged loan investor said that the paper was trading more actively than normal.

In the afternoon a trader said that AMD was a little lower, but added that the loan credit default swaps (LCDS) were leading the charge.

"The underlying cash was off an eighth of a point to start with, but nothing drastic," the trader said, adding that the loan paper was an eighth to three-eighths lower on Thursday, then opened wrapped around par on Monday, and by mid-Monday afternoon was at 100 bid, 100.375 offered.

The trader marked the cash paper unchanged on the day, while the LCDS was seven or eight basis points wider on the day.

This source said that the broad market seemed flat trailing Friday's sanguine jobs numbers.

"We thought things would feel better but they are really unchanged, and perhaps slightly weaker.

"In terms of overall volume it has been a very quiet day," the trader said.

After the close, a syndicate official who focuses on both bonds and bank loans said that the AMD cash paper was an eighth lower on the day, and the bonds were off as much as three-quarters to a point. Other bond traders were also marking AMD's bonds lower.

The syndicate official remarked that the sell-off in the loans and bonds had taken place against the backdrop of an improvement in AMD's share price.

The source said that Monday's press release did not disclose much, however the news may not have been as bad as expected, triggering some short covering in the stock.

Realogy holds in

A leveraged loan investor said that Realogy Corp.'s $1.95 billion Libor plus 300 basis points term loan, which broke for trading late last week, was holding: one deal was marking it 100 bid, while another had it at 100.50 bid, the source said.

"A 300 basis points coupon on the dominant firm in its industry, with no immediate problems, is initially going to trade okay because people are desperate for coupon," the investor commented.

"The issue is what will happen over the next 12 months, and there are people who bought this deal who don't expect to hold it for the next 12 months."

The source said that Realogy five-year LCDS was being quoted at 223 basis points, not quite 80 basis points tight of the Libor plus 300 bank loan.

"That means that there are people who are willing to make a negative basis trade, and they don't give a damn if the company files for bankruptcy," the source asserted.

Later another market source spotted the Realogy term loan at 100.375 bid, 100.625 offered.

Evergreen Tank closes

Odyssey Investment Partners, LLC said it completed its acquisition of the tank rental division of NEW Rental Holdings, Inc. and renamed the business Evergreen Tank Solutions, Inc.

Funding for the acquisition included a $90 million covenant-light second-lien term loan (B3/B-) talked at Libor plus 375 bps, with call protection 102, then 101.

Bank of America and General Electric Capital Corp. were lead arrangers, with Bank of America as left lead.

Odyssey paid $196 million for the company, which has a fleet of 6,200 units for the temporary liquid and solid storage containment industry.

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