Wyndham, Calpine, Reliant, Conseco and Adelphia all move up on market technicals

By Sara Rosenberg

New York, Jan. 5 - A number of names were quoted higher in the secondary bank loan market on Monday for no specific reasons other than market technicals including, Wyndham International Inc., Calpine Corp., Reliant Resources Inc., Conseco Inc. and Adelphia Communications Corp. Meanwhile, Nextel Communications Inc. was quoted little changed following the company's affirmation of its 2003 guidance.

Wyndham's term loan B traded around 96 on Monday, up about a point from previous levels, according to a trader.

Wyndham is a Dallas hotel enterprise.

Calpine, a San Jose, Calif., power company, saw its second lien bank debt trade up by about two points to around 99, according to a trader.

Reliant Resources' bank debt traded around 98 to 981/4, up about a point and a quarter on the day, according to a trader. However, according to a second trader the paper traded as high as 981/2.

Toward the end of December, the Houston electricity and energy company's saw a bit of a run up, going to levels of 98 bid, 98 5/8 offered in reaction to a proposed amendment that would increase pricing on the facility in return for an extension in the time period to purchase assets with proceeds that are currently in an escrow account.

However, the paper did end up coming in slightly as it stabilized from the market's original enthusiasm for the proposal.

Conseco's term loan A bank debt traded actively around par 1/4, up about an eighth of a point on the day, a trader said.

Conseco is a Carmel, Ind.-based company that supplies supplemental health insurance, life insurance and annuities.

Lastly, Adelphia's Century loan moved to levels of 94 bid, 95 offered, up about a point on the day, according to a trader.

Adelphia is a Coudersport, Pa., cable company.

Nextel remained unchanged with the term loan E seen at par ½ bid, par ¾ offered, according to a trader.

On Monday morning, the Reston, Va., Wireless company reaffirmed its 2003 guidance and strong business trends. The company said it anticipates net subscriber additions of 2.2 million or better, operating income before depreciation and amortization of $4.1 billion or more, free cash flow of $1 billion or more, earnings per share of $1.15 or more and capital expenditures of $1.8 billion or less for 2003, according to a Nextel news release.

"The early read on 2003 is that Nextel accomplished its goals and we anticipate announcing 2003 full year results and providing 2004 guidance in February," said Richard S. Lindahl, vice president and treasurer, in the release.

In follow-up news, Masonite International Corp.'s proposed credit facility is now expected to launch via a conference call sometime next week, according to a source close to the deal. The deal is expected to primarily go out to existing lenders since it is technically being done through an amendment.

Previously a market source told Prospect News that the facility may be sized around $200 million with the term loan A estimated anywhere between $50 and $100 million and the term loan B estimated anywhere between $100 and $150 million. The source also said that price talk on the term loan A was Libor plus 200 basis points and price talk on the term loan B was Libor plus 225 basis points. Pricing on the A loan will probably be grid based tied to leverage while the B loan is expected not to contain grid pricing.

SunTrust is sole lead on the transaction.

The company currently has a revolver and term loan C with an interest rate of Libor plus 275 basis points, both of which are expected to remain in place. These tranches will be amended to allow for the $160 million cash acquisition of The Stanley Works' residential entry door business and the additional bank debt, which will be used to fund the acquisition. Pricing on the term loan C is expected to remain as is throughout this process.

On a pro forma basis and immediately after the expected closing date, the company's pro forma debt-to-equity ratio is estimated to be about 0.9-to-1 and its pro forma debt-to-EBITDA ratio is estimated to be about 2.5-to-1, based on 12 months trailing results and not including any cost benefits from the combination.

Masonite is a Mississauga, Ont., building products company.

Agco Corp. completed its acquisition of Valtra Corp. from Kone Corp. for €600 million, according to a company news release.

In connection with this transaction, Agco obtained a $750 million credit facility (Ba1/ BB+) consisting of a $450 million term loan with an interest rate of Libor plus 225 basis points and a $300 million five-year revolver that refinanced the company's existing $350 million revolver.

The company also obtained a $100 million bridge loan facility, which is expected to be refinanced, along with a portion of its other outstanding borrowings, in the next several months, although the timing of the refinancing has not been determined and is subject to satisfactory market conditions, the news release said.

Rabobank was the lead bank on the deal.

"This acquisition provides an unequalled opportunity for AGCO to expand its business in significant global markets by utilizing the technology and productivity leadership present in this outstanding company," said Robert J. Ratliff, chairman, president and chief executive officer, in the release.

Agco is a Duluth, Ga., manufacturer and distributor of agricultural equipment and parts.

Magellan Health Services Inc. announced on Monday that it has emerged from its Chapter 11 financial restructuring through which the company reduced debt by about $600 million and added about $150 million in new equity.

As part of the restructuring, the company obtained a $230 million exit financing credit facility consisting of a $100 million term loan with an interest rate of Libor plus 250 basis points, an $80 million letter-of-credit facility with an interest rate of Libor plus 350 basis points and a $50 million revolver with an interest rate of Libor plus 250 basis points.

Deutsche Bank was the lead bank on the facility, which matures Aug. 15, 2008.

Proceeds from the term loan were used to repay all loans outstanding under the company's previous credit facilities. The revolver is undrawn.

"We set a goal of establishing a capital structure that would provide a healthy financial foundation for our business, and we are very proud to have achieved that goal while increasing the quality of service to our customers, members and providers," said Steven J. Shulman, chief executive officer, in a news release.

Magellan is a Columbia, Md., managed behavioral healthcare company.

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