Delphi term loan revs higher while revolver puts on the breaks; Cheniere sets short deadline

By Sara Rosenberg

New York, Aug. 22 - Delphi Corp.'s term loan continued to inch its way higher during Monday's session but its revolver took a step backwards on some selling pressure.

Meanwhile, in the primary market, Cheniere LNG Holdings LLC has given investors a tight schedule for its newly launched deal with commitments expected to be in within a week's time.

Delphi's bank debt saw split performances as the company's term loan gained about a quarter of a point during market hours and the company's revolver closed out the day with levels down by about half a point.

The term loan was quoted at 103¼ bid, 103¾ offered and the revolver was quoted at 95 bid, 96 offered, according to a trader, who explained that the revolver's performance was a result of some banks selling off paper.

The bank debt has been on a lot of peoples' radar ever since early this month when the company announced that it drew down $1.5 billion under its revolving credit facility in order to have cash readily available to finance operations if needed -a move that sparked loan downgrades from all three rating agencies - Moody's Investors Service to B3 from B1, Standard & Poor's to B- from BB- and Fitch Ratings to B from BB-.

Immediately following the draw news and the downgrades, Delphi's bank debt fell to quotes of 94½ bid, 95 offered on the revolver and 101½ bid, 102 offered on the term loan.

However, shortly after, levels started to bounce back as the company assured investors that it was and is working toward making a deal with its major unions to seek modifications required to implement its restructuring plan, as well as with GM to seek related financial support.

In fact, bank levels have steadily been rising as investors have gotten more comfortable with this idea of a GM bailout and started considering a potential Chapter 11 filing as less and less likely.

And, Lehman Brothers' upgrade of the company's stock this past Friday to overweight from underweight has further helped matters, as can be seen by the quarter to a half a point gain that the bank debt experienced during Friday's session.

Delphi is a Troy, Mich., supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers.

Cheniere sets tight timeline

Cheniere has given investors a short schedule as the commitment deadline for all orders on its proposed $500 million seven-year senior secured term loan B (BB), which just launched late Monday afternoon, has been set for this upcoming Monday, according to a market source.

The term loan is talked at Libor plus 325 basis points and is being offered to lenders at par.

New and existing lenders have been invited to participate in the new deal, the source said.

Credit Suisse First Boston is the lead bank on the deal.

Cheniere LNG is an indirect, wholly owned subsidiary of Houston-based Cheniere Energy Inc. It owns Cheniere Energy's 100% equity interest in Sabine Pass LNG LP and 30% limited partner equity interest in Freeport LNG Development LP, each of which owns an LNG receiving terminal project that is currently under construction.

Proceeds from the term loan will be used to fund Cheniere Energy's remaining equity requirements for the construction of the Sabine Pass terminal, to fund a reserve account for facility debt service obligations and pre-operating expenses, to fund equity requirements including funds for the potential expansion of the Sabine Pass terminal, construction of the Corpus Christi and/or the Creole Trail receiving terminals and pipelines, and for general corporate purposes.

Security for the loan is a the debt service reserve, all of the capital stock or other equity interests directly held by Cheniere LNG with respect to the projects and all of Cheniere LNG's capital stock.

AMI closes

AMI Semiconductor Inc. closed on its new $110 million term loan add-on (Ba3/BB-) that carries an interest rate of Libor plus 150 basis points - in line with existing term loan pricing.

Credit Suisse First Boston acted as the lead bank on the deal.

Proceeds from the add-on will be used to finance the majority of the acquisition costs related to the pending acquisition of the semiconductor division of Flextronics International USA Inc. The company will not receive funding under the amended term loan until the closing of the acquisition, which is expected to occur during the third quarter.

"The successful amendment of our term loan while maintaining our credit ratings highlights the continued commitment of our lending group and represents a strong endorsement from the capital markets," said David Henry, senior vice president and chief financial officer, in a company news release. "We appreciate the continued support and confidence of our banking partners as well as the rating agencies as we pursue a key portion of our growth strategy through acquisitions."

AMI is a Pocatello, Idaho, designer and manufacturer of application-specific integrated circuits.

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