SugarHouse expecting to allocate soon; Michaels Stores widens; TXU, First Data up with market

By Sara Rosenberg

New York, Aug. 26 - In new deal happenings on Wednesday, chatter surfaced that SugarHouse Casino is hopeful that it can give out allocations on its credit facility at the end of this week now that most of the credit documents have been posted.

Meanwhile, over in the secondary market, Michaels Stores Inc.'s term loan B saw levels widen out from Tuesday's quotes as investors digested the company's earnings news and activity in the name was light.

Also in trading, names like Texas Competitive Electric Holdings Co. LLC (TXU) and First Data Corp. saw stronger levels as the overall market was better.

SugarHouse readying allocations

SugarHouse Casino is targeting to allocate its $180 million credit facility (B-) on Friday as the documentation process is close to wrapping up, according to a market source.

The source, however, added that allocations "could slip into next week" being that there's "no real urgency to close."

Initially it was thought that allocations could have gone out as early as the end of last week.

The credit facility consists of a $10 million revolver, a $20 million delayed-draw term loan priced at Libor plus 825 basis points with a 3% Libor floor and an original issue discount of 96, and a $150 million funded term loan priced at Libor plus 825 bps with a 3% Libor floor and an original issue discount of 96.

SugarHouse sees good demand

As was previously reported, SugarHouse Casino's credit facility was oversubscribed during the syndication process and pricing on the deal is anticipated to finalize in line with the original talk.

Credit Suisse and Jefferies are the lead banks on the deal that will be used to fund the construction of the SugarHouse Casino on the Delaware River in Philadelphia by HSP Gaming, LP.

It has been said by sources that the SugarHouse Casino credit facility compares nicely to the Chester Downs and Marina LLC term loan that priced at the end of July.

Chester Downs and Marina, the operator of a racetrack casino in Chester, Pa., obtained a $230 million seven-year term loan (B3/B) with pricing of Libor plus 987.5 bps with a 2.5% Libor floor and an original issue discount of 94.125.

Michaels Stores wider

Michaels Stores' term loan B saw its bid side move lower and its offer side move higher on Wednesday in light volume, according to a trader.

The term loan B was quoted by the trader at 88 bid, 90 offered, compared to Tuesday's levels of 88¾ bid, 89¾ offered and Monday's levels of 87¾ bid, 88¼ offered. A different trader, however, had the paper quoted on Tuesday at 88¼ bid, 89¼ offered, versus an 89 bid on Monday.

On Tuesday, the company released second-quarter results that showed an increase in net income, net sales and adjusted EBITDA.

For the quarter, the company had net income of $2 million, compared to a $30 million loss for the same period last year, net sales for the quarter were $807 million, a 1.4% increase over the prior year's net sales of $796 million, and adjusted EBITDA for the quarter increased 16.4% to $85 million from $73 million in the second quarter of 2008.

As of Aug. 1, the company's cash balance was $36 million. Second-quarter debt levels declined $70 million to $3.964 billion, compared to$4.034 billion as of the end last year's second quarter, availability under the revolver was $526 million and a $5.9 million amortization payment was made on the term loan.

Michaels Stores is an Irving, Texas-based specialty retailer of arts, crafts, framing, floral, wall décor and seasonal merchandise for the hobbyist and do-it-yourself home decorator.

TXU, First Data rise

In more trading news, Texas Competitive and First Data gained some ground in sympathy with the rest of the general cash market, which was quiet but still up around a quarter of a point on the day, according to a trader.

Texas Competitive, a Dallas-based energy company, saw its term loan B-2 quoted at 76¾ bid, 77¼ offered, up a quarter of a point, the trader said.

And, First Data, a Greenwood Village, Colo.-based provider of electronic commerce and payment services, saw its term loan B-2 quoted at 83¼ bid, 84 offered, up about three-eighths of a point, the trader added.

Bids due on BWIC

Bids were due on Wednesday at noon ET for a $268 million Bid Wanted In Competition (BWIC), according to a trader.

The BWIC was comprised of mostly par names.

"It was off the run, smaller stuff, like $500 million to billion dollar deals and smaller," the trader said.

How much of the BWIC traded was not available prior to press time.

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