Aeroflex frees to trade; Swift Transportation lower on numbers; Generac stabilizes; LCDX dips

By Sara Rosenberg

New York, Aug. 15 - Aeroflex Inc.'s credit facility hit the secondary on Wednesday, with the first-out and first-loss term loans trading above their original issue discounts.

In other trading news, Swift Transportation Co. Inc.'s term loan B was weaker as the company released second-quarter results to lenders, Generac Power Systems Inc.'s first-lien term loan saw levels stabilize and tighten and LCDX was lower as stocks were volatile.

Aeroflex's credit facility freed up for trading during Wednesday's market hours, with the $400 million first-out term loan quoted at 95½ bid, 96½ offered on the break and then moving up to 96 bid, 97 offered, where it closed out the day, according to sources.

As for the $125 million first-loss term loan, that was quoted at 93½ bid, 95½ offered, sources added.

The first-out term loan is priced at Libor plus 325 basis points, with 101 call protection for one year, and was issued at a discount of 95.

The first-loss term loan is priced at Libor plus 375 bps, with call protection of 102 in year one and 101 in year two, and was sold to investors at a discount of 93.

During syndication, the company increased the amount of term loan debt it was getting to $525 million from $500 million and restructured it into first-out and first-loss tranches, as opposed to just one regular term loan tranche.

Upon that restructuring, the first-loss term loan was considering a discount of 92, but it was later changed to the 93 level.

The original $500 million term loan had been launched with price talk in the Libor plus 275 bps area, with no call protection and no discount.

Aeroflex's $575 million senior secured credit facility also includes a $50 million revolver that is priced at Libor plus 325 bps.

During syndication, the revolver was downsized from $60 million and pricing was increased from original talk in the Libor plus 275 bps area.

The credit agreement contains a total leverage covenant.

Originally, the deal was going to be covenant-light, but the syndicate decided to add the leverage test prior to the July 10 bank meeting.

Goldman Sachs acted as the lead bank on the credit facility, which was used to help fund the buyout of the company by Veritas Capital for $1.1 billion. Stockholders received $14.50 per share in cash.

Completion of the buyout was announced on Wednesday.

Aeroflex is a Plainview, N.Y., provider of high technology services to the aerospace, defense, cellular and broadband communications markets.

Swift softer on results

Swift Transportation's term loan B headed to lower ground on Wednesday on the heels of the company releasing none-too-positive second-quarter financial results to its bank lenders, according to traders.

The term loan B was quoted at 86 bid, 88 offered, down from previous levels of 91 bid, 92 offered, traders said, and had even reached a low of around 83 bid, 86 offered earlier on in the session.

Term loan B lenders were able to access the financial results through the Swift IntraLinks site hosted by Morgan Stanley.

At the end of July, the company announced that as of June 30, its cash balance was $171 million, of which $148 million was unrestricted, and credit available on its revolving line of credit exceeded $250 million.

Swift is a Phoenix-based truckload carrier.

Generac levels tighten

Generac Power Systems' first-lien term loan found its footing and even saw a rise on the bid side after experiencing a lot of volatility during the previous session, according to a trader.

The first-lien term loan was quoted at 85 bid, 87 offered, the trader said. By comparison, on Tuesday, the loan had dropped to 83 bid, 85 offered from 89 bid, 91 offered, and then really late in the day had recovered slightly to 84 bid, 87 offered.

Tuesday's rollercoaster ride was a result of the company disclosing to lenders in a private call quarterly results that came in at weaker-than-expected levels.

Generac is a Waukesha, Wis., manufacturer of standby power products.

LCDX trades down

LCDX bounced around during market hours as equities seesawed, but in the end, levels were weaker, according to traders.

The index went out around 93¾ bid, 94 offered, according to one trader, and around 93 7/8 bid, 94 1/8 offered, according to a second trader.

At the open on Wednesday, LCDX was quoted around 94.00 bid, 94.20 offered and during trading it reached a high of around 94½ bid, the first trader said.

On Tuesday night, the index went out around 94¼ bid, 94 offered.

"It was weak to start, rallied, and then weak again," the second trader added. "Equity markets were all over the place today."

Nasdaq closed down 40.29 points, or 1.61%, Dow Jones Industrial Average closed down 167.45 points, or 1.29%, S&P 500 closed down 19.84 points, or 1.39%, and NYSE closed down 165.23 points, or 1.79%.

Alpha Media closes

Alpha Media Group Inc. completed its acquisition of Dennis Publishing Inc., according to a company news release.

To help fund the transaction, Alpha Media got a new $175 million credit facility consisting of a $15 million five-year revolver (Ba3/B+) priced at Libor plus 300 bps, with a 50 basis point commitment fee, a $120 million first-lien seven-year term loan (Ba3/B+) priced at Libor plus 325 bps and a $40 million 71/2-year second-lien term loan (B3/CCC+) priced at Libor plus 750 bps.

During syndication, pricing on the revolver and the first-lien term loan was flexed up from original talk at launch of Libor plus 275 bps and pricing on the second-lien term loan was flexed up from original talk of Libor plus 600 bps.

Credit Suisse acted as the lead arranger on the deal.

Alpha Media is a New York-based publisher of men's lifestyle focused publications.

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