Chrysler Financial rises on loan news; Masonite starts to creep back up; Star Tribune widens with filing

By Sara Rosenberg

New York, Jan. 16 - Chrysler Financial Services LLC saw its term loan rally by a couple of points during the shortened pre-holiday weekend session on word that the government will be providing the company with some financing.

Also in trading, after getting smacked around for a few days, Masonite International Inc.'s term loan recouped some of its losses on Friday as its loan forbearance agreement was extended, and the Star Tribune Co.'s first-lien term loan levels widened after news of a bankruptcy filing hit.

Chrysler Financial trades up

Chrysler Financial's term loan headed higher on Friday on news that the government has agreed to provide the struggling company with some bailout money, according to a trader.

The term loan was quoted at 65 bid, 70 offered, up from previous levels of around 60 bid, 64 offered, the trader said.

The U.S. Treasury Department will be giving Chrysler Financial $1.5 billion under its Troubled Asset Relief Program.

Chrysler Financial is a provider of automotive financial products and services.

Masonite inches higher

Masonite's term loan regained some of the ground it lost over earlier in the week during Friday's trading session as the company extended its loan forbearance agreement once again, according to a trader.

The term loan was quoted at 38 bid, 40 offered, up from Thursday's levels of 36 bid, 38 offered, the trader said. On Wednesday, the debt was seen at 38 bid, 39 offered and last Tuesday it was seen at 44 bid, 45 offered.

On Friday, the company announced that its credit facility forbearance agreement was extended to Jan. 30 from Jan. 15.

The company has needed the forbearance since it was unable to comply with covenants related to EBITDA metrics as of June 30 and Sept. 30.

Also possibly helping the bank debt trading levels was the completion of a recent trade. The trader explained that on Thursday, a piece of the Masonite paper needed to trade so levels softened to where that trade could clear. On Friday, since the trade cleared, investors started to push the paper back up.

Masonite still in talks on loan amendment

Masonite also said on Friday that it is currently engaged in ongoing negotiations with its bank lenders regarding a potential amendment to the terms of the credit facility.

In addition, as was previously reported, the company has a forbearance agreement that expires on Jan. 31 covering a default for failing to make an Oct. 15 interest payment on its senior subordinated notes due 2015.

During the forbearance periods, the company is trying to develop an appropriate capital structure to support its long-term strategic plan and business objectives.

Masonite is a Mississauga, Ont.-based manufacturer of residential and commercial doors.

Star Tribune bid lower

Start Tribune's first-lien term loan was quoted lower on the bid side on Friday after the company announced that it filed voluntary petitions to reorganize under Chapter 11, but the offer side was quoted a little higher, according to a trader.

The first-lien term loan was seen at 17 bid, 22 offered, compared to previous levels of 19 bid, 21 offered, the trader said.

Meanwhile, the company's second-lien term loan was quoted at zero, which is where it has been for a while, the trader remarked.

The trader went on to say that Chapter 11 filing did not come as much of a surprise to anyone.

Star Tribune has no DIP plans

When announcing its filing, Star Tribune said that it currently has sufficient cash to continue its operations, and does not presently anticipate needing debtor in possession financing.

"We intend to use the Chapter 11 process to make this great Twin Cities institution stronger, leaner and more efficient so that it is well-positioned to benefit when economic conditions begin to improve," said Chris Harte, publisher and chairman, in a news release.

"With the significant deterioration in our revenue in 2008 and the challenging outlook for our industry for 2009, we simply could not wait any longer to take this step. Our plan is to use the court-supervised process to reduce our costs, strengthen our balance sheet and create a financially viable business," Harte added in the release.

Star Tribune is a Minneapolis-based news and information company.

LCDX climbs

LCDX 10 levels improved, while the cash market on Friday was quiet and felt kind of unchanged, according to a trader.

The index was quoted late in the afternoon at 76.40 bid, 76.90 offered, up from Thursday's levels of 76 bid, 76.30 offered, the trader said.

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