OSI Restaurant rises on tender offer; GM moves around with amendment; LCDX holds steady

By Sara Rosenberg

New York, Feb. 18 - OSI Restaurant Partners LLC's term loan headed higher on Wednesday as the company said that it is tendering for some bonds to help its loan covenant situation; however, the positive momentum was hindered somewhat by the release of uninspiring preliminary fourth-quarter numbers.

Also in trading, General Motors Corp. was unchanged to slightly weaker on the back of amendment news and the company's presentation of an updated plan to the government, and LCDX 10 was relatively unchanged.

OSI better with bond tender

OSI Restaurant's term loan gained some ground during the trading session on news of a Dutch auction senior notes tender offer, but levels probably didn't climb as high as they could have since preliminary financials also came out and they weren't that great, according to a trader.

The term loan was quoted at 47 bid, 49 offered, up from Tuesday's levels of 46 bid, 48 offered, the trader said.

On Wednesday morning, OSI announced the commencement of a cash tender offer to purchase the maximum aggregate principal amount of its 10% senior notes due June 15, 2015 that is allowed under its credit facility agreement.

The company can purchase notes for $73 million, excluding accrued interest. There is currently $488.2 million aggregate principal amount of the notes outstanding.

The tender is being done as a modified Dutch auction with an acceptable bid price range of $225 to $275 per $1,0000 principal amount of the notes.

OSI tender should help with covenants

OSI said upon disclosing its tender offer plans that it is doing the transaction to improve its financial covenant position under its senior credit facility.

The other purpose of the tender is to reduce debt, the company explained in a news release.

Funding for the tender is coming from cash on hand and an equity contribution of at least $47 million from parent company, OSI HoldCo Inc.

The offer will expire at midnight ET on March 18.

OSI reveals early fourth-quarter results

Also on Wednesday, OSI came out with preliminary fourth-quarter results in an 8-K filing that included revenues of $928 million, down 10.2% from revenues of $1.034 billion during the same quarter last year.

The company went on to say in the filing that it is not aware of any items that would cause it not to be in compliance with its credit facility financial covenants at Dec. 31.

In addition, the company revealed that in January, it received a default notice in connection with a $35 million uncollateralized line of credit that it guaranteed for T-Bird Nevada LLC.

The default was a result of T-Bird not paying the outstanding balance of roughly $33 million that was due on the Dec. 31, 2008 maturity date.

In February, OSI purchased the note and all related rights from the T-Bird lender, including the principal balance due on maturity and accrued unpaid interest, and now intends to pursue all available remedies against T-Bird.

OSI Restaurant is a Tampa, Fla., casual dining restaurant company.

General Motors unchanged to down

General Motors' term loan was unchanged to a little bit weaker, depending on which trader was asked, as the company announced a credit facility amendment and its updated plan that was presented to the U.S. Department of the Treasury.

One trader had the term loan quoted at 35½ bid, 36½ offered, down from 35¾ bid, 37¼ offered, while a second trader was quoting it wider at 35 bid, 38 offered, in-line with previous levels.

On Wednesday, General Motors said that it amended its credit facility to, among other things, permit the granting of junior liens to secure the loan from the U.S. Department of the Treasury

In addition, the amendment provides for a minimum Libor rate and an increase in the interest and default rates, all consistent with the terms of the Treasury loan.

General Motors looking for more funding

In more General Motors news, late Tuesday, the company came out with the updated plan that it gave to the government, and in this plan, the company is now asking for $22.5 billion in federal funding support.

Previously, the company was looking for $18 billion in funding and assumed that its $4.5 billion U.S. secured revolver would be renewed when it matures in 2011. Now, however, the thought is that the revolver may not be able to be rolled over at maturity, so the extra federal funds are being sought after.

The plan also discussed the issue of bankruptcy as a potential option for restructuring, with the conclusion being that it would be a highly risky, extremely costly and time-consuming process.

General Motors is a Detroit-based automotive company.

LCDX unmoved

Also in trading on Wednesday, LCDX 10 was pretty much unchanged on the day, with levels quoted around 72.50 bid, 72.80 offered, according to a trader.

The cash market seemed to be a little tougher to read, as one trader said it was a bit weaker across the board with not much going on and a second trader said that it was unchanged to maybe even a touch better.

Nasdaq closed down 2.69 points, or 0.18%, NYSE closed down 14.57 points, or 029%, S&P 500 closed down 0.75 points, or 0.10%, and Dow Jones Industrial Average closed up 3.03 points, or 0.04%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.