Solo up on refinancing; LCDX slides; QVC catching some interest; BRSP readies allocations

By Sara Rosenberg

New York, June 22 - Solo Cup Co.'s term loan headed higher on Monday on the back of news that the company will be refinancing the debt, and the LCDX 12 index and the cash market in general were both softer in light activity.

Over in the primary market, market talk is that QVC Inc.'s term loan B is chugging along in terms of syndication, with some orders already coming in, but it isn't exactly moving at blowout speed as a lot people were out at the end of last week.

In other news, BRSP LLC is getting close to distributing allocations on its new term loan, with the expectation being that they might even go out as early as Tuesday morning.

Solo term loan rises

Solo Cup's term loan gained by a few points during the trading session in follow through from Friday's news that a refinancing plan is in the works, according to a trader.

The term loan was quoted at 99 bid, par offered, up from 96 bid, 98 offered, the trader said.

On Friday afternoon, Solo Cup announced that it will be getting a new $200 million asset-based revolving credit facility (Ba2) and issuing $300 million of senior secured notes.

Proceeds from these debt deals will be used to repay all amounts outstanding under the company's existing first-lien credit agreement.

Solo Cup is a Highland Park, Ill.-based manufacturer of single-use products used to serve food and beverages.

LCDX, cash weaken

The LCDX 12 index and the overall cash market both felt lower on Monday and activity was once again light, according to traders.

"Just doesn't seem like anybody's trading anything. I think there's new money out there. It's difficult to find sellers. Only a handful of names are trading," one trader remarked about the cash market.

Meanwhile, the LCDX 12 index was quoted at 83.80 bid, 84.10 offered, down from 85.10 bid, 85.40 offered on Friday, traders said.

Stocks were also down on Monday, with Nasdaq closing lower by 61.28 points, or 3.35%, Dow Jones Industrial Average closing lower by 200.72 points, or 2.35%, S&P 500 closing lower by 28.19 points, or 3.06%, and NYSE closing lower by 209.17 points, or 3.52%.

QVC sees a few orders

Switching to new deal happenings, QVC's in-market $500 million term loan B (Ba2/BBB) has received a few commitments from lenders, but sources said that it has been coming along slowly possibly because investors were distracted by non-market related events.

"Going OK but hasn't had much traction due to most of the market being out Friday for the U.S. Open and part of today as well," one source told Prospect News.

The source went on to say that as of Friday afternoon, there was less than $100 million in the book.

"Imagine time will tell whether or not they have to sweeten the deal, but no changes as of now," the source added.

QVC loan details

As was previously reported, QVC's term loan B is talked at Libor plus 350 basis points with a 2% Libor floor, and investors are being offered an original issue discount in the 98 to 98½ range.

Bank of America and JPMorgan are the lead banks on the deal that will be used for general corporate purposes.

QVC already has a good amount of outstanding bank debt already and recently the maturities on some of that debt were extended.

Under an amendment, the company's existing credit facility will mature in six tranches between June 2010 and March 2014 with 11% of the outstanding principal due in 2010, 16% due in 2011, 9% due in 2012, 9% due in 2013 and 55% due in 2014.

Lenders consenting to the amendment, which represent $4.998 billion in commitments, received modified terms, including pricing that now varies from Libor plus 350 bps to 550 bps, depending on the tranche maturity.

Loans held by non-consenting lenders, which represent $252 million in commitments, will remain under the pricing terms of the previous credit facility, with such debt maturing in 2011. Non-consenting lenders will continue to receive a maximum interest margin of Libor plus 100 bps.

QVC is a West Chester, Pa.-based multimedia retailer.

BRSP allocating shortly

BRSP is currently hoping to allocate and free up for trading its $290 million five-year senior secured term loan (B1/BB-) on Tuesday, according to a market source.

The loan is priced at Libor plus 450 bps with a 3% floor, and it was sold at an original issue discount of 94.

During syndication, the deal was upsized from $275 million and the original issue discount was trimmed from initial guidance in the 92 to 93 area because of strong investor demand.

In addition, call protection on the loan was changed to 102 in year one, and 101 in years two and three, from 104 in year one, 102 in year two and 101 in year three.

And, even with the changes, the loan remained at about three times oversubscribed as almost everyone recommitted to the deal.

BRSP refinancing existing deal

Proceeds from BRSP's new term loan will be used to refinance an existing term loan that was put in place in 2006. The extra $15 million in proceeds raised from the upsizing is going towards the reduction of out of pocket expenses.

Covenants under the new term loan include a debt service coverage ratio.

Barclays Capital is the lead bank on the deal.

BRSP is a special purpose entity covering two gas-fired power plants - Broad River and South Point - that are operated by Calpine Corp.

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