Cable names head higher as Adelphia reveals better numbers in private lender call

By Sara Rosenberg

New York, Oct. 1 - Cable names were a big focus in the secondary bank loan market on Wednesday as various companies' bank debt moved higher by as little as quarter of a point to as much as one point. The gains activity may have been in response to Adelphia Communication Corp.'s release of better performance numbers to lenders in a private call, according to one trader.

Adelphia's bank debt was up about a point on the day pretty much across the board with the Old Century paper quoted at 89½ bid, 90½ offered, the FrontierVision paper quoted at 96 bid, 96½ offered and the Olympus paper quoted at 91 bid, 92 offered, according to the trader.

Adelphia, a Coudersport, Pa. cable television company, filed for bankruptcy protection in 2002.

In response to Adelphia's improvement, Charter Communications Inc.'s bank debt also headed higher, trading around 95½ and ending the day at 95½ bid, 96 offered, compared to a trading level of around 94¾ on Tuesday, the trader added.

Charter is a St. Louis-based cable company.

On a slightly smaller scale, Insight Communications Co. Inc. was up by about a quarter of a point with quotes of par ½ bid, 101 offered, according to a second trader.

On Tuesday, the New York cable company announced that it completed its Ohio refinancing plan, which entailed refinancing $140 million of 10% senior notes due 2006, $55.9 million of 12 7/8% senior discount notes due 2008 and a $22.5 million senior credit facility through issuance of a $225 million add-on to Insight Midwest's term loan B credit facility that was actually closed at the very end of August.

And, Mediacom Communications Corp.'s bank debt was also up by about a quarter of a point with quotes at par ½ bid, 101 offered, according to the second trader.

Mediacom is a Middletown, N.Y. cable company.

Meanwhile, Nextel Communications Corp. was a tad stronger on Wednesday with the term loan B and term loan C quoted at par ¼ bid, par ¾ offered, the term loan D quoted at par bid, par ¼ offered and the term loan A quoted at 96¾ bid, 97¼ offered, according to a trader, who placed the paper up by about an eighth of a point.

Asked whether reports of Nextel's plans to decrease capital spending in 2004, revealed by company officials at a Goldman Sachs conference Wednesday, had anything to do with the improved bids, the trader responded: "There's a better tone to the market. The people that are buying are just filling out new funds. It's not like people are saying, I need to get my hands on more Nextel. It's so widely held. What's moving up most things is incremental cash in the market."

At the conference, the company also mentioned that it is pro-actively deleveraging, lowering the average cost of debt, opportunistically refinancing and maintaining ample liquidity.

One such recent action is Nextel's announcement on Sept. 24 that it would redeem $500 million in principal amount of its 9.95% senior serial redeemable discount notes due 2008 as a step to further strengthen its balance sheet. At June 30, the Reston, Va. wireless company had $1.293 billion in principal amount of the 9.95% notes outstanding.

Coming up in the primary on Thursday is Waste Connections Inc.'s $500 million senior secured credit facility (Ba2/BB+), consisting of a $150 million seven-year term loan B with an interest rate of Libor plus 200 basis points and a $350 million five-year revolver with an interest rate of Libor plus 200 basis points.

Initially the term loan B was expected to be priced at Libor plus 250 basis points but was reverse flexed due to overwhelming subscription.

Fleet and Deutsche are the joint lead arrangers on the deal. There are also four other agent banks involved in the facility including Wells Fargo, Credit Lyonnais, Union Bank of California and LaSalle Bank.

Proceeds will be used by the Folsom, Calif. solid waste company to refinance the existing revolver, which was set to mature in May 2005.

Also on Thursday is the launch of Magellan Health Services Inc.'s $230 million five-year exit financing facility, consisting of a $100 million term loan B, a $50 million revolver and an $80 million letter of credit facility.

Proceeds from the term loans will be used to repay existing bank debt.

Deutsche Bank is leading the deal for the Columbia, Md. managed behavioral healthcare company.

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