Steak 'n Shake starts trading; Ford, Chrysler Group gain ground with strong sales numbers

By Sara Rosenberg

New York, Sept. 1 - Steak 'n Shake's credit facility allocated and broke for trading during Thursday's market hours, with the term loan quoted right around its original issue discount price in light volume.

Also in trading, Ford Motor Co. and Chrysler Group LLC both saw an improvement in term loan levels as the companies released favorable monthly sales results, and the secondary market in general, once again, had a positive bias.

Steak 'n Shake frees up

Steak 'n Shake's credit facility hit the secondary market on Thursday, with the $110 million four-year term loan quoted at 99 bid, 99½ offered, according to a trader, who said that not much trading activity was seen in the name.

Pricing on the term loan is Libor plus 450 basis points with a 1% Libor floor, and it was sold at an original issue discount of 99. There is 10% amortization per annum.

During syndication, the term loan was downsized from $140 million, while pricing was left unchanged.

Jefferies & Co. is the lead bank on the deal.

Steak 'n Shake revolver

Steak 'n Shake's $130 million credit facility (B1) also provides for a $20 million three-year revolver.

Proceeds will be used to refinance existing debt and fund a return of capital to the parent. As a result of the term loan downsizing, the amount of the dividend payment was reduced by about $30 million.

Senior leverage is 3.0 times. This is down from 3.2 times originally as a result of the change to the term loan amount.

Steak 'n Shake is a quick-service restaurant chain founded in Normal, Ill.

Ford heads higher

Ford's term loan B-1 was better in trading as the company's monthly sales improved from last year, with traders quoting the debt at 99¼ bid, 99¾ offered, up from 98¾ bid, 99¼ offered.

For August, Ford had total sales of 175,220, up 11.2% from 157,503 a year ago, which, according to the company, was driven by 16% higher Ford brand sales and 25% higher sales for Lincoln.

Total car sales for the month were 58,470, up 3.5% from 56,487 last year, total utilities sales were 49,468, up 34.6% from 36,751, and total truck sales were 67,282, up 4.7% from 64,265 in August 2010.

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Chrysler B loan rises

Chrysler's term loan B was also stronger on Thursday with its August numbers, with one trader quoting the paper at 91 bid, 92 offered, up from 90 bid, 91 offered, a second trader quoting it at 90½ bid, 92 offered, up from 90¼ bid, 91¼ offered, and a third trader quoting it at 91½ bid, 92½ offered, up from 89¾ bid, 90¾ offered.

"In spite of a volatile market, Chrysler managed to significantly outperform the industry again in August with retail sales up 42%," Reid Bigland, president and chief executive officer-Dodge Brand and head of U.S. sales, said in a news release.

"Last month also represented our 17th-consecutive month of year-over-year sales growth, and on the back of our 16 all-new or significantly-refreshed products, I see that trend easily continuing into the fall," Bigland added.

Chrysler sales results

For the month of August, Chrysler reported U.S. sales of 130,119, up 31% increase from sales of 99,611 in August 2010.

The total results were comprised of car sales for the month of 33,692, up 23% from 27,341 last year, and truck sales of 96,427, up 33% from 72,270 in the 2010 comparable period.

The company said that models that contributed to the sales increase included the Chrysler 200, Fiat 500, Jeep Wrangler, Jeep Grand Cherokee, Dodge Durango, Dodge Journey and the Ram pickup truck.

Chrysler is an Auburn Hills, Mich.-based producer of Chrysler, Jeep, Dodge, Ram, Mopar and Fiat vehicles and products.

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