Astoria frees to trade; SunGard weakens post numbers; Movie Gallery steadies; AWAS second lien fills up

By Sara Rosenberg

New York, Feb. 23 - Astoria Energy allocated its credit facility on Thursday with its first-lien debt breaking for trading atop 101 and its second-lien debt breaking for trading atop 102.

Also in trading, SunGard Data Systems Inc.'s term loan B - to some peoples' surprise - softened during market hours despite the release of solid financial numbers the day before. And, Movie Gallery Inc.'s term loan finally took a breather after spending the last couple of sessions steadily climbing higher.

Meanwhile, on the primary front, AWAS Aviation Holdings LLC second-lien term loan tranche filled up relatively quickly as that part of the deal has already received more orders than necessary, but the first-lien tranche is still in the process of gaining momentum.

Astoria Energy's credit facility freed for trading early on in the session Thursday with the strip of first-lien term loan and synthetic letter-of-credit debt quoted at 101 bid, 101½ offered throughout the day and the second-lien debt quoted at 102¼ bid, 102½ offered throughout the day, according to traders.

Both the $430 million first-lien term loan (B1/BB-) and the $120 million synthetic letter-of-credit facility (B1/BB-) are priced with an interest rate of Libor plus 200 basis points and contain step downs to Libor plus 175 basis points based on debt repayment.

The $300 million second-lien term loan (B3/B) is priced with an interest rate of Libor plus 375 basis points and contains call protection of 102 in year one and 101 in year two.

During syndication, the first-lien term loan and synthetic letter-of-credit facility were reverse flexed from original price talk at launch of Libor plus 225 basis points with the addition of the step down. The second-lien loan was reverse flexed as well, with pricing coming down from Libor plus 450 basis points.

Astoria Energy's $900 million credit facility also contains a $50 million revolver (B1/BB-).

Morgan Stanley and Goldman Sachs are the lead banks on the deal, with Morgan Stanley the left lead.

Proceeds from the credit facility will be used to fund the acquisition of three New York City power plants from Reliant Energy Inc. - the Astoria, Gowanus and Narrows plants - by U.S. Power, a New York-based electricity generating asset acquisition company, and private equity firm Madison Dearborn Partners LLC.

SunGard dips in trading

SunGard's term loan B weakened on Thursday, leaving many scratching their heads in confusion as the company had just released good fourth-quarter and full-year financials - strong enough numbers, in fact, to buoy the company's unsecured bonds by about a point, according to a trader.

The term loan B closed out the day down by about an eighth of a point with levels of par 3/8 bid, par ¾ offered, the trader said.

"They were solid numbers. Unsecured bonds were up. Go figure," the trader added.

Late in the day Wednesday, SunGard announced financial results for the fourth quarter that included adjusted income from operations of $282 million, a 24% increase over $228 million for the fourth quarter of 2004, and reported income from operations of $151 million compared with $195 million last year.

Other fourth-quarter numbers included adjusted EBITDA of $341 million and revenue of $1.09 billion, an increase of 19% over revenue for the fourth quarter of 2004.

For full-year 2005, adjusted income from operations was $933 million, a 13% increase over $828 million for 2004, and reported income from operations was $493 million compared with $703 million in the previous year.

Adjusted EBITDA for the full-year was $1.19 billion compared with $1.11 billion for 2004 and revenue was $4 billion, an increase of 13% over revenue for 2004.

SunGard is a Wayne, Pa.-based provider of software and processing solutions for financial services, higher education and the public sector.

Movie Gallery stabilizes

After many a days on the upward path, Movie Gallery's term loan finally remained still as it appears that investors' believe the current levels to be fair market value, according to a trader.

The term loan closed the session quoted at 93 bid, 94½ offered, unchanged from Wednesday's closing levels, the trader said.

Early on last week, Movie Gallery's term loan had fallen to the 89 bid, 91 offered context after a new movies-on-demand service called MovieBeam Inc. was announced, creating some nervousness over the potential affects on Movie Gallery's bottom line.

However, once people had time to get comfortable with the news, Movie Gallery's term loan started to rebound and attract more buying interest. The bank debt has been treading higher since late last week, with all-in-all gains from last Thursday until this past Wednesday ranging around 4 points.

Movie Gallery is a Dothan, Ala.-based operator of video retail stores.

AWAS second lien overfills

AWAS Aviation's second-lien term loan has already reached oversubscription levels as investors have been jumping on the deal since it first launched on Feb. 16, but the first-lien term loan is taking a bit more time to fill up because of its much larger size and different audience base, according to a fund manager.

The second-lien term loan is sized at $250 million with price talk of Libor plus 650 basis points, and the first-lien term loan is sized at $1.8 billion with price talk of Libor plus 175 basis points.

In addition, the second-lien term loan is being marketed with call protection of 102 in year one and 101 in year two.

"The first-lien is mainly being looked at by banks as opposed to funds," the fund manager said. "[It's got] low spreads and it's not rated, which takes CLO buyers out of the mix. It's moving along but not done yet.

"The second lien is oversubscribed. No talk of any changes to the second lien yet, but I wouldn't be surprised if they shrink the first lien a bit and upsize the second lien by a like amount. They might even try to reverse flex the pricing on the second lien - maybe down to like Libor plus 600 [bps] given the fact that it filled out so quickly," the fund manager added.

JPMorgan is the lead bank on the deal that will be used to help fund Terra Firma's purchase of AWAS from Morgan Stanley for $2.5 billion.

AWAS Aviation is a Seattle-based aircraft leasing company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.