Calpine, Goodyear rebound; Patriot Media breaks for trading

By Sara Rosenberg

New York, Feb. 26 - Calpine Corp.'s bank debt rebounded on Thursday, with the second lien term loan up about half a point and the Calpine Construction Finance Co. II LLC revolver up about a point. Meanwhile, the heavy cloud finally lifted on Goodyear Tire & Rubber Co.'s new asset-based add-on, with the paper heading higher by about half a point. And, Patriot Media & Communications CNJ LLC's deal broke for trading with the term loan B trading in the par ½ context.

Calpine's second-lien term loan was quoted at 95½ bid, 96 offered compared to Wednesday's levels of 95 bid, 96 offered, while the CCFC II revolver was quoted at 97 bid, 98 offered compared to Wednesday's levels of 96 bid, 96¾ offered, according to a trader.

"The market started the day soft and then filled in throughout the day," the trader said.

On Thursday, the San Jose, Calif.-based power company held a conference call in which officials stated that although the refinancing of the CCFC II paper was postponed, the company feels that that there is little refinancing risk in this move (see story elsewhere in this issue).

The $2.5 billion CCFC II credit facility matures in November and has about $2.3 billion in outstanding debt under it, including letters of credit.

Also on Thursday, Calpine put out earnings numbers for the quarter ended Dec. 31 that included earnings per share of $0.29, or $119.6 million of net income, compared with a loss per share of $0.07, or $25.2 million of net loss, for the quarter ended Dec. 31, 2002. Revenues for the quarter were about $1.92 billion compared to revenues of about $1.87 billion last year. EBITDA, as adjusted, was $422.7 million compared to $405.2 million for the fourth quarter of 2002.

For the 12 months ended Dec. 31, the company reported earnings per share of $0.71, or $282.0 million of net income, compared with earnings per share of $0.33, or $118.6 million of net income, for the 12 months ended Dec. 31, 2002. Revenues for the year were about $8.9 billion compared to about $7.4 billion for full year 2002. EBITDA, as adjusted, was about $1.58 billion compared to about $1.52 billion for 2002.

"2003 was a good year for Calpine. We continued to prosper in evolving market conditions - strengthening our financial position, creating opportunity for growth and adding value for our customers and investors," said Peter Cartwright, president and chief executive officer, in a company news release.

"During the year, Calpine refinanced $4.2 billion of maturities, raised $2.7 billion through liquidity transactions and reduced debt by $461 million. We also expanded our revenue-generating capabilities - adding 3,500 megawatts of capacity and signing more than 7,000 megawatts of power contracts with major load-serving customers. On the operations front, we lowered our cost of production, enhanced plant performance and further benefited from economies of scale," Cartwright added.

For 2004, the company expects breakeven GAAP earnings guidance based upon an assumed average market spark spread of $7 per megawatt-hour. The company also anticipates EBITDA, as adjusted, of about $1.7 billion and revenues of $11 billion.

Goodyear rebounds

Goodyear's $650 million secured term loan (B1/B+) add-on to its $1.3 billion asset-based credit facility was quoted at 99¾ bid, par offered on Thursday, up about 50 basis points from previous levels. And the feeling of heaviness, which was how the paper was described since breaking into the secondary a little more than a week ago, was nowhere to be found, according to a trader.

The Akron, Ohio-based tire company's add-on broke for trading in the par 5/8, par 7/8 context and then moved down to the 99 area over the course of a few days.

Speculations were that the heaviness was caused by a couple of large accounts that had too much exposure leading to technicals of better sellers than buyers.

Goodyear was expected to price a $650 million offering of seven-year senior secured notes that were talked in the area of 11% on Thursday. Proceeds from the offering will be used to prepay the U.S. term loan facility, to reduce a portion of the commitments under the U.S. revolver, to repay other debt of the company, including temporary reductions of outstanding balances under the revolver, and for general corporate purposes.

Patriot Media breaks

Patriot Media & Communications' $185 million credit facility allocated and broke for trading Thursday with the term loan B moving up to par ¼ bid, 101 offered with trading taking place in the par ½ context, according to a market source.

The $120 million term loan B due 2011, which was originally issued to investors at par, was reverse flexed on Wednesday to Libor plus 300 basis points with a stepdown to Libor plus 275 basis points, from Libor plus 325 basis points with a stepdown to Libor plus 300 basis points. This term loan is essentially an increase of the existing term loan B by $20 million and repricing of the existing term loan B, which carried an interest rate of Libor plus 450 basis points.

"Everybody stayed in," the source said. "People were comforted by the B1 rating from Moody's. The company is performing well."

Moody's Investors Service's B1 rating was a step up from the private B2 rating that the rating agency issued last year when the loan was first obtained in connection with the purchase of RCN Corp.'s New Jersey cable systems. This latest transaction was the first time that a public rating was sought after for the credit facility.

The company also repriced its $25 million term loan A due 2010 and $40 million revolver due 2010 at Libor plus 300 basis points. These pro rata tranches are not officially being marketed, however, lenders still had to approve the proposed changes.

Bank of New York is the lead bank on the Greenwich, Conn., cable operator's deal.

Transportation Tech flexes up

Transportation Technologies Industries' $115 million five-year term loan (B2/B) was flexed up to Libor plus 375 basis points from Libor plus 325 basis points and its $100 million second lien five-year term loan B (B3/CCC+) was flexed up to Libor plus 600 basis points from Libor plus 500 basis points, according to a syndicate document.

Credit Suisse First Boston, Lehman Brothers and Wachovia Securities are joint lead arrangers on the deal, with CSFB acting as administrative agent and Wachovia acting as syndication agent.

The facility also contains a $50 million five-year revolver (B2/B) with an interest rate of Libor plus 300 basis points.

Proceeds will be used to refinance existing debt.

Transportation Technologies is a Chicago maker of parts, subassemblies and component systems for manufacturers and aftermarket suppliers of medium/heavy-duty trucks, transport buses, off-highway vehicles, construction and agricultural equipment.

New Flyer closes

New Flyer Industries Corp. closed on its $255 million credit facility (B1/B+) on Thursday, according to a market source. Citibank and UBS are joint leads on the transaction.

The facility consists of a $45 million revolver with an interest rate of Libor plus 275 basis points, a $50 million synthetic letter-of-credit facility with an interest rate of Libor plus 275 basis points and a $160 million term loan B with an interest rate of Libor plus 275 basis points.

Originally, the deal was sized at $240 million consisting of a $40 million revolver, a $55 million synthetic letter-of-credit facility and a $145 million term loan B.

Furthermore, pricing on the synthetic letter-of-credit facility and the term loan B was originally set at Libor plus 300 basis points.

However, tranche sizes were modified late last week as the company opted to increase the bank debt so that it could decrease its mezzanine debt. And, the reverse flex was just a function of strong demand.

Proceeds will be used to help support the acquisition of New Flyer by Harvest Partners Inc. and Lightyear Capital LLC from KPS Special Situations Funds.

New Flyer is a Winnipeg, Manitoba, manufacturer and aftermarket service provider of heavy-duty transit buses.

© 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.