Neiman bounces around with numbers; Cablevision inches up; Huntsman guidance surfaces

By Sara Rosenberg

New York, Sept. 9 - Neiman Marcus Inc.'s term loan experienced some volatility, dropping by a few points as earnings disappointed lenders, but then rebounding most to all of the way because the cash market in general had a positive tone.

Also in the secondary market, Cablevision System Corp.'s term loan B was a little stronger during Wednesday's trading session despite news of a bond offering as it, too, followed the rest of the cash market higher.

Over in the new deal front, the banks selling Huntsman Corp.'s term loan came out with some indication on what type of original issue discount lenders should expect and SugarHouse Casino's credit facility is expected to close next week at its original terms.

Neiman seesaws

Neiman Marcus' term loan softened after the company came out with results for its fiscal fourth quarter ended Aug. 1. The debt, however, spent the rest of the day inching higher until it ended the day close, if not in line, with previous levels, according to traders.

The term loan was quoted by one trader at 83 1/8 bid, 84 1/8 offered, slightly down from Tuesday's pre-number levels of 83½ bid, 84½ offered. This trader said the loan reached a low of 81¼ bid, 82 offered on Wednesday, but then "slowly drifted up."

"It was pretty active. Market feels pretty strong. Cash coming off the sidelines. People looking to pick stuff up," the trader said in explanation of why Neiman Marcus' term loan rebounded.

A second trader, meanwhile, had the company's loan quoted at 83¼ bid, 84 offered, compared to 83 bid, 84 offered before earnings were released. This trader had the loan moving to 81 bid, 83 offered on Tuesday night after numbers came out and opening at 81¼ bid, 83¼ offered on Wednesday.

"Overall market was stronger, so it moved up with the market, but numbers were definitely disappointing. Seems like market just shrugged off the numbers," the trader added.

Neiman loss widens

Late Tuesday, Neiman Marcus revealed that its fourth-quarter net loss was $168.6 million, compared to a net loss of $35.7 million in the 2008 fourth quarter. This year's loss includes non-cash pretax impairment charges of $143.1 million and $31.3 million.

Operating loss for the quarter was $192.1 million, compared to an operating loss of $6.2 million last year.

The adjusted operating loss was $49 million, compared to adjusted operating earnings of $25.1 million in 2008.

And, total revenues for the quarter were $768 million, compared to $1.03 billion in the prior year, and comparable revenues decreased 23.4%.

Neiman EBITDA declines

Neiman Marcus also reported that its adjusted EBITDA for the fourth quarter was $5.7 million, compared to adjusted EBITDA of $86.1 million in the fourth quarter of fiscal year 2008.

"Fiscal year 2009 was a very challenging year for our company. We quickly began addressing the many challenges we faced due to the sharp decline in our business, precipitated by the downturn in the economy," said Burton M. Tansky, chairman and chief executive officer, in a news release.

"We tightly managed our expenses, resulting in a total reduction of $183 million, which included the elimination of approximately $100 million of non-variable costs from our expense structure this year. We also aggressively reduced our inventory levels to be more in line with demand, ending the year with 23% less merchandise than last year.

"In total, we ended the year with cash of $323 million, an $84 million increase from last year. In addition, we recently renegotiated our $600 million revolving credit facility and extended the maturity to 2013," Tansky added in the release.

Neiman Marcus is a Dallas-based high-end specialty retailer.

Cablevision posts gains

Cablevision's term loan B saw an improvement on Wednesday even though the company announced plans for a bond offering, which is somewhat negative from a loan standpoint since the funds are not being used to paydown loans, according to a trader.

The term loan B was quoted at 96¾ bid, 97¼ offered, up from Tuesday's levels of 96½ bid, 97 offered, the trader said.

"Bond news not great. It's up with the rest of the market," the trader remarked.

Cablevision offering notes

Early in the day, Cablevision said that it would be selling $500 million of senior notes and would use the proceeds to purchase shares of common stock of its wholly owned subsidiary CSC Holdings Inc.

CSC Holdings will, in turn, use the proceeds from the sale of its common stock to Cablevision, along with cash on hand, to address its upcoming debt maturities by repaying or repurchasing $500 million of its senior notes - either its 7.625% senior notes due 2011 or its 6.75% senior notes due 2012 - and for general corporate purposes.

As a result, CSC Holding launched a tender offer for $500 million of its notes, with the 7.625% notes being the first priority and the 6.75% notes being the second priority.

The tender offer will expire on Oct. 6.

Cablevision is a Bethpage, N.Y.-based telecommunications, media and entertainment company.

Huntsman OID talk

Moving to the primary market, Credit Suisse and Deutsche Bank are expected to price Huntsman's $500 million term loan at an original issue discount that will fall out somewhere in the low 90 context, according to a market source.

The spread on the seven-year senior secured term loan is Libor plus 225 basis points.

Books are expected to close by the end of the week.

Huntsman obtained the term loan on June 23 as part of a settlement agreement with the banks in connection with the terminated merger agreements with Basell and Hexion Specialty Chemicals Inc.

Proceeds were used by the company to repay some of its outstanding debt and enhance liquidity.

In addition to the term loan, the banks supplied Huntsman with a $600 million unsecured note that is priced at 5.5%.

Credit Suisse and Deutsche Bank each provided $550 million of the debt financing.

Huntsman is a Salt Lake City, Utah-based manufacturer and marketer of differentiated chemicals.

SugarHouse closing soon

SugarHouse Casino is anticipated to close on its $180 million credit facility (B-) either on Tuesday or Wednesday of next week, assuming board approval in Pennsylvania is obtained on Tuesday, according to a market source.

The credit facility was expected to allocate on Wednesday, but may not break for trading until next week, the source added.

The deal will close in line with original terms as a $10 million revolver, a $20 million delayed-draw term loan and a $150 million funded term loan. Pricing on the delayed-draw and funded term loan is Libor plus 825 bps with a 3% Libor floor and an original issue discount of 96.

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.

The credit facility was oversubscribed during the syndication process.

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