US Airways, Delta active with numbers; Metaldyne revised again, breaks; Gateway may retranche

By Sara Rosenberg

New York, Oct. 20 - US Airways Group Inc. and Delta Air Lines Inc. were both trading quite a bit on Wednesday after the release of positive earnings results, and Asurion's existing term loan headed lower now that syndication of the incremental deal is basically done.

In other news, Metaldyne LLC came out with a second round of changes to its oversubscribed term loan, reducing the spread once again and trimming the Libor floor, and then proceeded to allocate and free up for trading.

Continuing on the new deal front, structure on Gateway Casinos & Entertainment's credit facility is still evolving, even though the deal was officially launched to lenders on Wednesday, with there now being the possibility for a term loan A tranche.

Also, Getty Images Inc. and Rural/Metro Corp. released price talk on their new bank deals as both transactions were presented to investors during the session, and Columbian Chemicals Co. and Illumination and Detection Solutions announced guidance ahead of their bank meetings.

US Airways inches up

US Airways' term loan gained some ground in trading on Wednesday as the company released third-quarter numbers that showed a year-over-year improvement in earnings and revenues, according to traders.

The term loan was quoted by one trader at 88¼ bid, 89¼ offered, up from 88 bid, 89 offered, and by a second trader at 88¼ bid, 89¾ offered, up from 87½ bid, 89½ offered.

For the third quarter, the Tempe Ariz.-based airline company reported a net profit of $240 million, or $1.22 per diluted share, compared to a net loss of $80 million, or $0.60 per share, last year.

Total operating revenues for the quarter were $3.18 billion, up 16.9% from 2.72 billion in the third quarter of 2009.

And, as of Sept. 30, the company had $2.4 billion in total cash and investments, of which $389 million was restricted, up from $2 billion and of which $530 million was restricted on Sept. 30, 2009.

Delta unchanged to higher

Delta also came out with good quarterly results on Wednesday, but its bank debt was quoted flat to a little stronger, depending on which trader was asked.

The old first-lien term loan was quoted by one trader at 98¼ bid, 99¼ offered, unchanged on the day, and by a second trader at 98 1/8 bid, 99 1/8 offered, up from 98 bid, 99 offered.

Meanwhile, the new term loan was quoted by both traders at the same levels that were seen during the previous session, with the first trader placing it at 101 1/8 bid, 101 5/8 offered and the second trader placing it at 101 bid, 102 offered.

"Airlines performed very well today in term of flows. Actively trading today," the first trader added, regarding both US Airways and Delta.

Delta posts profit

For the September quarter, Delta reported net income of $363 million, or $0.43 per diluted share, compared to a net loss of $161 million, or $0.19 per share, last year.

Total operating revenue for the quarter was $8.95 billion, an increase of 18% from $7.57 billion in the prior year.

And, as of Sept. 30, the Atlanta-based airline company had $5.5 billion in unrestricted liquidity, including $3.9 billion in cash and short-term investments and $1.6 billion in undrawn revolving credit facilities.

Asurion softens in trading

Asurion's existing term loan moved down to 91¾ bid, 92½ offered form 92½ bid, 93½ offered as the company's $900 million incremental first-lien term loan has filled out, according to a trader.

"The old [loan] will move down because on a relative value basis it's not as attractive," the trader explained.

The new term loan is priced at Libor plus 525 basis points with a 1.5% Libor floor and an original issue discount of 96. There's call protection of 102 in year one and 101 in year two.

During syndication, pricing was flexed up from Libor plus 450 bps, the discount was widened from initial talk at launch of 99 and the call protection was sweetened from just 101 in year one.

Barclays, Credit Suisse, Morgan Stanley and Goldman Sachs are the lead banks on the new term loan that will be used to fund a dividend.

Asurion is a Nashville, Tenn.-based provider of technology protection services.

Metaldyne reworks pricing

In other loan happenings, Metaldyne announced further changes to its $250 million term loan (B1/B+), including another flex in spread and a reduction to the Libor floor, as demand continued to be overwhelmingly strong following the first round of changes, according to sources.

The term loan is now priced at Libor plus 600 bps, down from most recent talk of Libor plus 650 bps and from initial talk at launch of Libor plus 750 bps, sources said.

Also, the Libor floor is now set at 1.75%, down from the initially proposed 2%, sources continued.

The original issue discount on the term loan is still 99, which is where it was reduced to from 98 earlier in the syndication process.

Left unchanged throughout syndication is the term loan's call protection of 102 in year one and 101 in year two.

Metaldyne frees to trade

After announcing the changes in the morning and shutting the books at 1 p.m. ET, Metaldyne allocated and started trading in the secondary market, according to sources.

The term loan was quoted at par bid, par ½ offered on the break and then it moved up to par ¼ bid, par ¾ offered, sources said.

Deutsche Bank and Barclays Capital are the lead banks on the term loan that will be used to refinance existing debt and fund a dividend.

The amount of the planned dividend payment was increased the other day when the term loan was upsized from $225 million.

Metaldyne is a Plymouth, Mich.-based designer and supplier of metal-formed components and assemblies for engine and transmission applications.

Gateway mulls restructuring

Gateway Casinos & Entertainment is now anticipating adding a Canadian dollar amortizing term loan A to its credit facility structure to take advantage of significant early interest from Canadian banks, a market source told Prospect News.

Prior to the Wednesday bank meeting, it was thought that the facility would be sized at $285 million and comprised of a $35 million revolver and a $250 million five-year first-lien term loan B.

Price talk on the term loan B had been circulating at Libor plus 525 bps to 550 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Now, price talk on the term loan B is simply being described as being in the low 7% range, the source added.

Gateway Casinos lead banks

Jefferies, RBS, Goldman Sachs, JPMorgan and Morgan Stanley are the lead banks on Gateway Casinos' credit facility.

Proceeds will be used to refinance an exit financing term loan.

Other funds for the refinancing are expected to come from $250 million of seven-year second-lien notes.

When asked whether the bond offering would be downsized as a result of the possible addition of a term loan A, the source responded that the exact structure "will evolve around interest."

Gateway Casinos is a Burnaby, B.C.-based casino and entertainment company.

Getty guidance emerges

Getty Images held a bank meeting on Wednesday afternoon to kick off syndication on its proposed credit facility, at which time price talk of Libor plus 425 bps with a 1.5% Libor floor and an original issue discount of 99 was revealed on the $1.27 billion six-year term loan B, according to a market source.

Commitments towards the term loan B are due on Oct. 29.

Barclays, JPMorgan, GE Capital, Bank of America and Goldman Sachs are the lead banks on the $1.37 billion credit facility that also includes a $100 million revolver.

Proceeds will be used to refinance existing debt and fund a dividend payment.

Getty Images is a Seattle-based creator, aggregator and distributor of visual and multimedia content to creative and communication professionals.

Rural/Metro sets talk

Also on the topic of pricing, Rural/Metro announced talk of Libor plus 425 bps to 450 bps on its $175 million secured credit facility (Ba1) - comprised of a $75 million term loan and a $100 million revolver - as the deal was launched to investors with a conference call on Wednesday, according to a market source.

The term loan has a 1.75% Libor floor and is being offered at an original issue discount of 99 to 991/2, and the revolver is being offered with a 75 bps upfront fee and has a 75 bps commitment fee, the source said.

RBC Capital Markets is the lead bank on the deal that will be used, along with $200 million of senior notes, to refinance the company's existing senior secured revolver, term loan and letter-of-credit facilities, to fund a tender offer for its senior discount notes, to pay off cash collateralized letters of credit and for working capital and general corporate purposes.

Rural/Metro is a Scottsdale, Ariz.-based provider of medical ambulance response services.

Columbian Chemicals pricing

Columbian Chemicals is talking its $375 million senior secured credit facility (Ba3/BB) due in 2015 at Libor plus 375 bps ahead of the Thursday bank meeting that will launch the deal into syndication, according to a market source.

The facility consists of a $300 million term loan A and a $75 million revolver.

UBS and JPMorgan are the lead banks on the deal that will be used to refinance existing bank debt.

Columbian Chemicals is a Marietta, Ga.-based manufacturer of carbon black.

Illumination and Detection Solutions reveals talk

Illumination and Detection Solutions disclosed that it is talking its $215 million credit facility at Libor plus 650 bps with a 1.75% Libor floor and an original issue discount of 98, according to a market source.

The facility, which will launch with a bank meeting on Thursday, consists of a $15 million revolver and a $200 million term loan. The term loan was upsized from initial expectations of $178 million, the source said.

UBS and Credit Suisse are the lead banks on the deal that will be used to help fund the buyout of the company by Veritas Capital from PerkinElmer Inc. for about $500 million in cash.

Closing is expected by the end of the year, subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Illumination and Detection Solutions is a provider of specialty lighting and sensor components, subsystems and integrated products to OEMs for health, environmental and security segments.

DaVita closes

In other news, DaVita Inc. closed on its $3 billion secured credit facility (Ba2/BB/BB), consisting of a $1.75 billion six-year term loan B, a $1 billion five-year term loan A and a $250 million five-year revolver, according to a news release.

Pricing on the term loan A and the revolver is Libor plus 275 bps, and pricing on the term loan B is Libor plus 300 bps with a step-down to Libor plus 275 bps if corporate ratings are upgraded to Ba2/BB. The B loan has a 1.5% Libor floor and 101 soft call protection for one year and was sold at an original issue discount of 991/2.

During syndication, pricing on the term loan B was flexed down from Libor plus 350 bps, the discount tightened from 99 and call protection was added, and pricing on the revolver and term loan A was reduced from Libor plus 300 bps.

DaVita refinances debt

Proceeds from DaVita's credit facility are being used to help refinance $1.8 billion of outstanding bank debt, $700 million of 6 5/8% senior notes due 2013 and $850 million of senior subordinated notes due 2015 as well as for general corporate purposes.

JPMorgan, Bank of America, Credit Suisse, Barclays, Goldman Sachs and Wells Fargo acted as the joint lead arrangers and bookrunners on the deal.

DaVita is a Denver-based provider of dialysis services.

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