Live Nation rallies on merger buzz; Cedar Fair bid up; Aleris plummets; Spectrum Brands rise continues

By Sara Rosenberg

New York, Feb. 4 - Live Nation Inc. jumped up by a couple of points on Wednesday as chatter of a possible merger with Ticketmaster Entertainment Inc. floated around the market, and Cedar Fair Entertainment Co. was better with an amendment announcement.

In more trading happenings, Aleris International Inc. nosedived with the holding of a private call, Swift Transportation Co. Inc. inched up on earnings, and Spectrum Brands Inc. was once again higher as investors were still reacting to the company's recent bankruptcy filing.

Live Nation gains ground

Live Nation's term loan was considerably stronger during market hours as rumors of a potential merger with Ticketmaster pushed the debt higher, a trader told Prospect News.

Live Nation's term loan was quoted at 80 bid, 85 offered, up from previous levels of 72 bid, 75 offered, the trader said.

Ticketmaster's term loan was quoted at 80 bid, but the trader said that he didn't see an offer and he hadn't seen any recent levels on the debt to compare with Wednesday's market.

According to the buzz, the merger of the two companies would be completed through an all-stock transaction.

Live Nation is a Los Angeles-based producer, marketer and seller of live concerts. Ticketmaster is a West Hollywood, Calif.-based live entertainment ticketing and marketing company.

Cedar Fair better bid

Cedar Fair's term loan saw a higher bid on Wednesday following the company's declaration that it launched an amendment to its credit facility, according to a trader.

The term loan was quoted at 80 bid, versus a 78 bid on Tuesday, the trader said, adding that he really hadn't seen any offers.

In an 8-K filed with the Securities and Exchange Commission early on in the day, Cedar Fair revealed that it is trying to amend its $2.0813 billion credit facility to allow for term loan repurchases at a price below par.

Lenders have been asked to provide their consents by the close of business on Feb. 10.

Cedar Fair is a Sandusky, Ohio-based owner and operator of amusement and water parks.

Aleris slides on lender call

Aleris' term loan took a noticeable hit in the secondary market as the company held a private call during the session, according to a trader.

The term loan was quoted at 22½ bid, 25½ offered, down from previous levels of 36 bid, 38 offered, the trader said.

The trader remarked that following the call, rumors started floating around that the company discussed a prepackaged plan of reorganization or some sort of bankruptcy filing with the call participants.

Term loan levels fell as a result of this chatter since the debt holders are scared to lose assets to the asset-based revolver, the trader explained.

Aleris is a Beachwood, Ohio-based producer of aluminum rolled products and extrusions, aluminum recycling and specification alloy.

Swift Transportation edges up

Swift Transportation's term loan B headed upwards in trading following the release of earnings results to lenders, according to a trader.

The term loan B was quoted at 48 bid, 49 offered, up from Tuesday's levels of 45½ bid, 48½ offered, the trader said.

Swift Transportation is a Phoenix-based truckload carrier.

Spectrum Brands stronger again

Spectrum Brands' term loan continued to climb in trading on Wednesday still on the news of the company's Chapter 11 filing - which was first announced during the previous session, according to a trader.

The term loan was quoted at 68 bid, 68¾ offered, up from Tuesday's closing levels of 65½ bid, 66½ offered, the trader said. A different trader had the term loan going out on Tuesday at 66 bid, 68 offered.

The trader said that the term loan opened as low as 64 bid, 65 offered on Wednesday, but then it jumped back up as the day progressed.

When asked why it opened lower, the trader responded that he wasn't sure, but guessed that there might have been some selling pressure early on and then some more buyers stepped in to the market, alleviating the pressure and pushing levels higher.

Spectrum Brands noteholders agree to plan

Spectrum Brands' pre-negotiated plan of reorganization, which was filed with the bankruptcy court on Tuesday, has already been agreed upon by the holders of roughly 70% of its outstanding public notes.

Under the plan, existing bond obligations in a principal amount of $1.05 billion would be canceled and noteholders would be issued new bonds in an aggregate principal amount equal to 20% of the total unpaid principal and interest on existing bonds together with shares of new common stock.

The claims of existing secured and other general unsecured creditors would be reinstated or unimpaired, and, therefore, payment of the claims would be received on existing terms either in the ordinary course or upon consummation of the plan.

Existing common stock will be extinguished under the plan, and no distributions will be made to holders of the current equity.

As a result of the reorganization, the company expects to reduce its balance sheet debt by about $840 million, eliminate about $95 million in annual cash interest payments for at least each of the next two years, and free up additional cash.

Spectrum Brands seeks approval of DIP

In connection with the bankruptcy filing, Spectrum Brands has received commitments for a $235 million 12-month debtor-in-possession facility and is currently seeking court approval of this financing.

The commitments came from certain of its existing asset-backed facility lenders, with a participating interest from certain existing noteholders, and Wachovia Bank is acting as the agent on the deal.

Tranching on the deal is comprised of a $190 million revolver priced at Libor plus 450 basis points and a $45 million asset-based revolver supplemental loan priced at Libor plus 1,450 bps.

Spectrum Brands is an Atlanta-based consumer products company.

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