Quicksilver breaks; Cedar Fair up on numbers; Cablevision rises; Hudson Products flexes

By Sara Rosenberg

New York, Aug. 5 - Quicksilver Resources Inc.'s second-lien term loan freed up for trading on Tuesday and Cedar Fair Entertainment Co.'s term loan B was stronger after the company announced financial results for the second quarter

Also in trading, Cablevision Systems Corp.'s term loan was better as the company said it is exploring options, and the cash market in general felt positive, with even the auto names, such as General Motors Corp., Ford Motor Co. and Chrysler Financial, seeing an improvement.

Over in primary happenings, Hudson Products Corp. lifted pricing on both tranches under its credit facility, while leaving all other terms of the deal unchanged, and syndication on Manitowoc Co. Inc.'s credit facility is heard to be moving along nicely.

Quicksilver Resources' $700 million five-year second-lien term loan (B1/B+) allocated and freed up for trading during market hours, with levels seen above the original issue discount at which the paper was sold, according to sources.

The loan opened at 98 1/8 bid, 98 5/8 offered and then moved up to 98½ bid, 99 offered in "very active" trading, sources said.

The second-lien deal is priced at Libor plus 450 basis points with a 3.25% Libor floor, and it was sold at an original issue discount of 98.

Pricing on the term loan will step up by 25 bps per quarter after two years and the loan is repayable at par for the first two years, then at 103 in year three, 102 in year four and 101 in year five.

During syndication, as a result of strong oversubscription, pricing on the loan was reduced from initial talk of Libor plus 500 bps and the original issue discount tightened from 971/2.

Credit Suisse and JPMorgan are the lead banks on the deal that will be used to help fund the acquisition of producing, leasehold, royalty and midstream assets.

Other financing for the acquisition will come from $300 million of borrowings under the company's existing revolver and $307 million of common stock.

The company hopes to repay $500 million of the new debt by year end 2009.

At year end 2008, debt to capital is expected at around 60%, debt to cash flow from operations is expected at around 3.3 times and interest coverage is expected at around 6.5 times.

Under the acquisition agreement, Quicksilver is buying the assets that are associated with the Barnett Shale formation in northern Tarrant and southern Denton counties of Texas from various private parties, including Chief Resources LLC, Hillwood Oil & Gas LP and Collins and Young LLC for $1.307 billion.

The acquisition is scheduled to close on Aug. 8, subject to expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the satisfaction or waiver of other customary conditions.

Quicksilver is a Fort Worth, Texas-based natural gas and crude oil exploration and production company.

Cedar Fair trades up

Cedar Fair's term loan B moved higher in trading following the release of positive second-quarter earnings that showed an increase in net income and net revenues, according to a trader.

The term loan B was quoted at 95 bid, 95½ offered, up from Monday's levels of 94 bid, 95 offered, the trader said.

For the quarter, the company reported net income of $14.7 million, or $0.26 per diluted limited partner unit, versus $5.5 million, or $0.10 per diluted limited partner unit, for the same period in 2007.

Net revenues for the second quarter, which includes an additional 75 operating days as a result of the fiscal calendar, were $296.2 million, up 8% from $274 million in the fiscal quarter ended June 24, 2007.

For the first fiscal six months of the year, net loss was $29.1 million, or $0.53 per diluted limited partner unit, compared to a net loss of $49.6 million, or $0.92 per diluted limited partner unit, for the same fiscal period in 2007.

Net revenues for the fiscal six months ended June 29, which includes an additional week when compared with the fiscal six months ended June 24, 2007, were $336.6 million, up 11% from $304 million a year ago.

The company said that the decrease in net loss and increase in revenues were primarily the result of a 13%, or 113-day, increase in the number of operating days in 2008 due to the timing of the fiscal second-quarter close.

Adjusted EBITDA for the fiscal six months ended June 29 increased $12.4 million to $52 million compared with $39.6 million during the same period last year.

As of June 29, the company had $1.7 billion of variable-rate debt and $123.5 million in borrowings under its revolver. Of the total term debt, $17.5 million is scheduled to mature within the next twelve months.

"In spite of difficult economic conditions in several of our key markets, our parks performed reasonably well during the first half of 2008," said Dick Kinzel, chairman, president and chief executive officer, in a news release.

"Overall, in light of the current economy, we are satisfied with our results through the first half of the year. Attendance and revenue trends continued to improve across all of our properties toward the end of June and through the peak vacation month of July. Over the next several months, we will continue to introduce new marketing programs that add value to a park visit and attract families choosing to vacation closer to home," Kinzel added in the release.

The company also reaffirmed on Tuesday its full-year guidance of net revenues between $990 million to $1.02 billion and full-year adjusted EBITDA between $340 million to $355 million.

Cedar Fair is a Sandusky, Ohio-based amusement-resort operator.

Cablevision strengthens

Cablevision's term loan inched its way higher as the company said it is looking into various options for its business, although the upward momentum could have just been a result of an overall stronger cash market, according to a trader.

The term loan was quoted at 95¼ bid, 95¾ offered, up from Monday's levels of 95 bid, 95½ offered, the trader said.

On Tuesday, Cablevision announced that it is exploring several strategies for bringing the market value of its common stock more closely in line with the underlying operating performance of the company.

Some options being examined include quarterly dividends or stock buybacks as well as the spin-off of one or more businesses and other potential strategies.

"We are highly confident of the strength of our underlying businesses and our operating performance. As we indicated last week we have a strong desire to close the value gap between our operating performance and the market value of our shares and, therefore, we will be actively looking at options to accomplish that," said James L. Dolan, president and chief executive, in a news release.

The company said that it will retain investment banking firms and such other advisors as necessary to pursue the strategic options.

Cablevision is a Bethpage, N.Y.-based entertainment and telecommunications company.

Cash market improvement moves autos up

The cash market in general had a good tone to it on Tuesday, with levels up around an eighth to a quarter of a point, and as a result of this stronger sentiment, auto names were pushed higher, according to a trader.

General Motors, a Detroit-based automotive company, saw its term loan quoted at 74¾ bid, 75¾ offered, up from 74½ bid, 75½ offered, the trader said.

Ford, a Dearborn, Mich.-based automotive company, saw its term loan quoted at 77 bid, 78 offered, up from 76½ bid, 77½ offered, the trader continued.

And, Chrysler Financial, a provider of automotive financial products and services, saw its first-lien term loan quoted at 80 3/8 bid, 81 3/8 offered, up from 80 bid, 81 offered, the trader added.

"Autos have been hit pretty hard, so they found some strength," the trader remarked. "Overall cash market felt firm. We've had a decent slide on relatively light volume. Found some support today."

Hudson Products tweaks deal

Switching to primary happenings, Hudson Products decided on Monday night to raise pricing on its $250 million credit facility, according to a market source.

With the change, both the $30 million five-year revolver and the $220 million seven-year term loan B are being talked at Libor plus 500 bps, up from initial talk at launch of Libor plus 425 bps, the source said.

As before, the two tranches have a 3% Libor floor for life and the term loan is being offered to investors at an original issue discount of 98.

Commitments from lenders are still due on Aug. 12.

BNP Paribas is the lead bank on the facility that will be used to help fund the buyout of the company by Riverstone Holdings LLC from the Sterling Group LP.

Other buyout financing will come from $125 million of mezzanine debt.

Hudson is a Sugar Land, Texas, designer and manufacturer of air-cooled heat exchanger equipment to serve the oil, gas and petrochemical processing industries.

Manitowoc gets good reception

Manitowoc's credit facility $2.925 billion credit facility (Ba2/BB+), which was launched to retail investors last Thursday, has been getting "very positive reception" from lenders, according to a market source.

"Both the pro rata tranches and the term loan B are going very well," the source added.

The deal is comprised of a $400 million five-year revolver, a $900 million five-year term loan A and a $300 million 18-month term loan X, with all of these tranches talked at Libor plus 325 bps, and a $1.325 billion six-year term loan B talked at Libor plus 350 bps.

The term loan B has a 3% Libor floor and is being offered to investors at an original issue discount of 98.

Upfront fees on the revolver, term loan A and term loan X are based on commitment level.

JPMorgan, Deutsche Bank, Morgan Stanley and BNP Paribas are the joint lead arrangers and joint bookrunners on the deal, with JPMorgan the administrative agent, Deutsche and Morgan Stanley the syndication agents, and BNP the documentation agent.

Proceeds will be used to help fund the acquisition of Enodis plc for 328 pence per Enodis share, resulting in a transaction valued at about $2.7 billion, including the assumption of Enodis' net debt, which was about $249 million/£125 million as of March 29.

In April, Manitowoc agreed to buy Enodis for 258 pence per share, but then in early May, Illinois Tool Works Inc. offered to buy the company for 280 pence in cash per share, plus a 2 pence per share dividend. Following the first Illinois Tool Works offer, Manitowoc increased its bid to 294 pence per share, plus a 2 pence per share dividend, and then the offer was increased again during an auction process.

As a result of Manitowoc increasing its purchase price for Enodis, the term loan B was upsized twice before the deal even came to market, first moving to $1.075 billion from $800 million, and then to $1.325 billion from $1.075 billion.

The transaction is expected to close in the fourth quarter and it will be structured as a court-sanctioned scheme of arrangement under the laws of the United Kingdom.

Manitowoc is a Manitowoc, Wis.-based provider of lifting equipment for the construction industry, manufacturer of cold-side equipment for the foodservice industry, and provider of shipbuilding, ship repair and conversion services. Enodis is a Tampa, Fla.-based food and beverage equipment manufacturer.

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