Neiman inches higher with monthly sales results; HCA run-up ends; Avis steady on paydown

By Sara Rosenberg

New York, March 3 - Neiman Marcus Inc.'s term loan was slightly stronger during Wednesday's trading session following the company's release of revenue results for February that showed a year-over-year increase.

HCA Inc.'s term loan A was a touch weaker, while its term loan B held steady after spending the last two days running up on paydown news.

And, Avis Budget Group Inc.'s term loan was unfazed by a paydown announcement since lenders were already expecting it to occur.

Neiman rises with numbers

Neiman Marcus' term loan gained some ground in the secondary market after the company announced preliminary company-wide revenues for the month of February, according to traders.

The term loan was quoted by one trader at 90 1/8 bid, 91 1/8 offered, up from 90 bid, 91 offered, and by a second trader at 90½ bid, 91¼ offered, up from 90 3/8 bid, 90 7/8 offered.

For the month, the company reported total revenues of $249 million, up 7.7% from $232 million in February 2009.

Also, comparable revenues for the month were $246 million up 6.2% from $232 million in the prior year.

From a liquidity standpoint, the company's cash balance as of Feb. 27 was roughly $530 million, compared to $230 million in the previous year, and there were no borrowings outstanding under its $600 million asset-based revolving credit facility.

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

HCA takes a breather

HCA's term loan A came in a little bit on Wednesday and its term loan B was pretty flat after moving around earlier this week on news of a planned repayment, according to a trader.

The term loan A was quoted at 95 7/8 bid, 96 1/8 offered, down from 96 bid, 96¼ offered, and the term loan B was quoted at 96¼ bid, 96½ offered, unchanged from Tuesday's closing levels, the trader said.

The debt spent the first part of the week moving higher after the company revealed on Monday that it would be selling $1 billion of senior secured first-lien notes and that, as required by its senior secured credit facility, proceeds from the notes would be used to repay term loans.

Then, on Tuesday, the 7¼% notes were upsized to $1.4 billion, which will result in a larger paydown, and priced at 99.095 to yield 7 3/8%.

Prior to the bond deal being announced, the term loan A was quoted at 94½ bid, 94 7/8 offered and the term loan B was quoted at 95 1/8 bid, 95½ offered.

HCA is a Nashville-based owner and operator of hospitals and surgery centers.

Avis holds firm

Avis Budget Group's term loan saw little reaction to the announcement that the company would be selling some bonds to repay a portion of the debt being that investors had already priced that in to the paper, according to traders.

The term loan was quoted by one trader at 99 1/8 bid, 99 5/8 offered, flat from previous levels, and by a second trader at 98½ bid, 99¼ offered, versus 98½ bid, 99½ offered on Tuesday.

On Wednesday, Avis disclosed that it will be offering $400 million of senior notes that will be used to fund a term loan paydown and for general corporate purposes.

This paydown is a condition to the company's amend and extend proposal that was launched to investors last month.

Avis amendment details

Under the amendment, Avis expects to extend about $265 million of its term loan to 2014 from 2012 and about $965 million of revolver commitments to 2013 from 2011, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Pricing on the extended term loan is Libor plus 425 basis points, while the roughly $60 million non-extended term loan is priced at Libor plus 375 bps.

As for the revolver, pricing on the extended commitments can range from Libor plus 375 bps to 450 bps based on ratings, with a minimum rate of Libor plus 400 bps until the non-extended revolver matures, while the roughly $210 million non-extended revolver is priced at Libor plus 400 bps.

In addition, the amendment will revise the financial and non-financial covenants to provide more flexibility to the company.

Avis a Parsippany, N.J.-based provider of vehicle rental services.

Dole Food closes

In other news, Dole Food Co. Inc. closed on its $1.2 billion credit facility, consisting of a $350 million four-year ABL revolver and an $850 million seven-year term loan (Ba2/BB-), according to a news release.

The revolver is priced at Libor plus 400 bps with no Libor floor and the term loan is priced at Libor plus 325 bps with a 1.75% Libor floor and it was sold to investors at an original issue discount of 99.

During syndication, pricing on the term loan firmed at the low end of the initial Libor plus 325 bps to 350 bps talk.

Deutsche Bank, Bank of America and Wells Fargo acted as the lead banks on the deal.

Proceeds were used to refinance existing term loan and ABL revolver debt and will fund the redemption of the company's remaining $70 million of senior notes that mature in 2011.

Dole is a Westlake Village, Calif.-based fruit and vegetables company.

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