Chrysler Financial trades up; Lear better on earnings; LCDX higher; Alpha Media raises pricing

By Sara Rosenberg

New York, Aug. 2 - Chrysler Financial's first- and second-lien term loan debt headed higher on Thursday in active trading, Lear Corp.'s term loan gained ground on good earnings results and LCDX was stronger.

Over in the primary, Alpha Media Group Inc. increased pricing on all tranches under its credit facility and Syniverse Technologies Inc. is planning on allocating its credit facility next week as syndication wrapped at revised terms.

Chrysler Financial's first- and second-lien term loans both saw better levels during their second day of trading amidst strong activity, according to a trader.

The first-lien term loan went out at 98 bid, 99 offered, the trader said. By comparison, the debt was being quoted on Wednesday in the 96¾ to 97 bid range and the 97¼ to 97½ offered range, depending on which trader was asked.

Meanwhile, the second-lien term loan went out at 95¾ bid, 96¾ offered, the trader continued. By comparison, the debt was being quoted on Wednesday in the 94 to 94½ bid range and the 95 to 95½ offered range, depending on the trader.

The $4 billion five-year first-lien term loan B (B1/BB-/BBB-) is priced at Libor plus 400 basis points, with call protection of 103 in year one, 102 in year two and 101 in year three, and was issued with an original issue discount of 95.

The $2 billion six-year second-lien term loan (B2/CCC+/BB) is priced at Libor plus 650 bps, with call protection of 103 in year one, 102 in year two and 101 in year three, and was also issued with an original issue discount of 95.

The company's $8 billion credit facility also includes a $2 billion five-year ABL revolver (B1/BB-) that is priced at Libor plus 400 bps.

The ABL and the first-lien term loan share the same collateral and the same covenants.

JPMorgan, Citigroup, Goldman Sachs, Bear Stearns and Morgan Stanley are the joint bookrunners on the deal, with JPMorgan, Citigroup and Goldman Sachs the joint lead arrangers.

Proceeds will be used to help fund the buyout of the provider of financial services for vehicles in the NAFTA region by Cerberus Capital Management LP from DaimlerChrysler AG.

Lear up on numbers

Lear's term loan moved higher on Thursday after the company announced positive second-quarter results, according to a trader.

The term loan ended the day at 96½ bid, 97½ offered, the trader said. By comparison, in the morning, the term loan was being quoted at 96 bid, 97 offered, the trader added.

For the second quarter, Lear reported net income of $123.6 million, or $1.58 per share, compared with a net loss of $6.4 million, or $0.10 per share, for the second quarter of 2006.

Free cash flow was $204 million as compared to $0.8 million in the second quarter of 2006. The improvement reflects primarily the improvement in earnings and lower capital spending.

The company also reported net sales of $4.2 billion and pretax income of $143.9 million, including restructuring costs of $34.8 million and other special items of $3.4 million, whereas for the same period last year, the company reported net sales of $4.8 billion and pretax income of $31.5 million, including restructuring costs and other special items of $24.3 million.

The decline in net sales for the quarter reflects primarily the divestiture of Lear's interior business and lower production in North America, offset in part by the benefit of new business, mainly outside of North America, and favorable foreign exchange.

"The Lear team was able to deliver improved financial results as benefits from restructuring activities, ongoing cost and efficiency actions and new business globally more than offset lower production in North America," said Bob Rossiter, chairman and chief executive officer, in a company news release. "Going forward, we plan to continue with our strategy of global restructuring and further sales diversification to improve our longer-term competitiveness."

In addition, the company said that it now expects full-year 2007 net sales of approximately $15 billion, up about $200 million from the prior outlook.

Furthermore, core operating earnings for full-year 2007 are expected to be in the range of $600 million to $640 million. This is unchanged from the last full-year outlook provided, but the company now sees earnings at or near the high end of this range.

Lear is a Southfield, Mich.-based supplier of automotive seating, electronics and electrical distribution systems.

LCDX gains ground

For the second day in a row, LCDX went out at higher levels, pushed up by market technicals, according to a trader.

The index ended the session around 93 7/8 bid, 94 1/8 offered, up from Wednesday's closing levels of 93.30 bid, 93.75 offered, the trader said.

The index even got as high as 94¼ to 94½ during market hours, the trader continued.

As for the cash market, "it was up a little bit in the morning and then as the day progressed it faded a little bit. But, it feels okay in general," the trader added.

Alpha Media ups spread

Moving to the primary market, Alpha Media flexed pricing higher on all tranches under its $175 million credit facility, according to a market source.

Under the changes, the $15 million five-year revolver (Ba3/B+) is now priced at Libor plus 300 bps, up from original talk at launch of Libor plus 275 bps, the source said. The tranche carries a 50 bps commitment fee.

In addition, the $120 million first-lien seven-year term loan (Ba3/B+) is now priced at Libor plus 325 bps, up from original talk of Libor plus 275 bps, the source continued.

And, the $40 million 71/2-year second-lien term loan (B3/CCC+) is now priced at Libor plus 750 bps, up from original talk of Libor plus 600 bps, the source added.

Credit Suisse is the lead arranger on the deal.

Proceeds will be used to fund the acquisition of Dennis Publishing Inc.

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

Syniverse readies allocations

Syniverse Technologies is anticipated to allocate its credit facility early next week now that syndication of the deal has been successful due to the recent revision to structure, according to a market source.

The facility consists of a $42 million U.S. revolver, a $20 million euro-denominated revolver, a $137 million U.S. funded term loan, a $160 million U.S. delayed-draw term loan and a $130 million euro-denominated delayed-draw term loan all priced at Libor/Euribor plus 250 bps.

The funded U.S. term loan was sold to investors with an original issue discount of 991/2, and the U.S. and the euro delayed-draw term loans carry an upfront fee of 100 bps and a commitment fee of 125 bps.

Furthermore, the funded and delayed-draw term loans have 101 soft call protection for one year.

Late last week, the deal underwent a pretty big overhaul as pricing on all tranches was lifted from original talk of Libor/Euribor plus 200 bps, the leverage-based pricing step down was removed from all of the term loans, the discount was added to the funded term loan, the call protection was added to the funded and delayed-draw term loans, the delayed-draw upfront fee was increased from 25 bps and the delayed draw commitment fee was changed from 75 bps, with two 25 bps step ups over time.

Also, last week, the accordion feature under the term loans was capped at $100 million, whereas before it was greater of $100 million or leverage-based test.

This list of changes was not the first time that the Syniverse credit facility was reworked. Earlier on in the syndication process, the company divided its $297 million funded U.S. term loan into the $160 million delayed-draw piece and the $137 million funded piece and made the entire $130 million euro-denominated term loan into delayed-draw from funded.

With the changes to tranching, the company also added a consolidated total leverage covenant that applies to the revolvers and the term loans. The covenant opens at 3.25 times, stepping up when the delayed-draw debt is funded. The revolvers already contained a leverage covenant, but it was basically revised to match the new one added to the term loans.

Proceeds will be used to fund the $290 million proposed acquisition of Billing Services Group Ltd.'s wireless division, a provider of clearing, settlement, payment and financial risk management services for communications service providers, and to refinance Syniverse's existing senior secured credit facility.

The reason for the switch to delayed-draw funding was because the European Commission has initiated a Phase II review of the acquisition.

The delayed-draw terms loans are available until March 21, 2008 or if they terminate the acquisition agreement.

Lehman Brothers and Deutsche Bank are the joint lead arrangers and joint bookrunners on the $489 million senior secured credit facility (Ba2/BB), with Lehman the left lead.

Syniverse is a Tampa, Fla., provider of mission-critical technology services to wireless telecommunications companies.

Escort pulls deal

Escort Inc. cancelled its in-market $114 million credit facility, according to a market source.

The facility consisted of a $10 million revolver and a $104 million term loan, with both tranches talked at Libor plus 325 bps.

GE Capital was acting as the lead bank on the deal, which was going to be used for a recapitalization.

Escort is a West Chester, Ohio, manufacturer of high-performance radar detectors, laser detectors and vehicle performance computers.

CEVA closes

CEVA Group plc completed its acquisition of EGL Inc. for $47.50 in cash per share, for a total transaction consideration of about $2 billion, according to a news release.

To help fund the transaction, CEVA got $525 million in incremental bank debt (Ba2/BB-) comprised of a $425 million term loan add-on, a $50 million synthetic letter-of-credit facility add-on and a $50 million revolver add-on, with all tranches priced at Libor plus 300 bps.

The term loan and synthetic letter-of-credit facility add-ons were sold to investors with an original issue discount of 99.

During syndication, pricing on all of the debt was increased from original talk at launch of Libor plus 275 bps and the discount was added to the institutional tranches.

In connection with this deal, the company is repricing its existing bank debt from Libor plus 250 bps to match the add-on pricing.

The existing bank group got a 50 bps consent fee to approve this transaction.

Credit Suisse, Morgan Stanley, Bear Stearns, JPMorgan and UBS acted as the lead banks on the deal, with Credit Suisse the left lead.

CEVA is a Hoofddorp, Netherlands-based logistics and supply chain management company. EGL is a Houston-based transportation, supply chain management and information services company.

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