Securitization People and Markets

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

BondWeek is the leading news publication for fixed-income professionals, covering new deals, structures, asset-backed securities, industry and market activity.

Alliance Atlantis Communications has made changes to its accounting policy that could cause the company to violate its bank covenants. An analyst explained that Alliance has announced a change in the way it will account for its CSI franchise. "It was concluded that the accounting treatment for the company's interest in the CSI franchise is joint venture accounting," Alliance said in a recent release. Alliance is Canada's largest movie production and distribution company and it produces the television show "CSI: Crime Scene Investigation" and "CSI: Miami." "What will change is strictly the timing of earnings recognition, which will be reduced for past years and increased in future years," the company added.

The $200 million credit backed The Carlyle Group's $300 million majority stake acquisition of the CSX Corp. subsidiary. Carlyle has since phased CSX Lines into its new name, Horizon Lines. Horizon Services Group is the company's cargo management and tracking services unit. The Charlotte, N.C.-based company provides domestic ocean liner services and operates in the U.S., Puerto Rico and Guam. A UBS official declined to comment and an ABN banker did not return calls. Christoph Windmer, v.p. of finance and administration and cfo, did not return calls.

UBS and Credit Suisse First Boston launched syndication last Tuesday of a $260 million amended and restated credit for vinyl siding and vinyl window product maker Associated Materials, backing the company's acquisition of Gentek Holdings for approximately $118 million in cash. The deal consists of a $70 million revolver and a $190 million "B" piece. The "B" loan is priced at LIBOR plus 3%, which is 50 basis points tighter than the company's existing loan spread, according to a banker who noted that commitments rolled into the deal both before and after the bank meeting.

Federal bank regulators are preparing to set banks straight on the issue of linking commercial loans to investment-banking business, or loan tying. There is a growing conviction at the Federal Reserve and the Office of the Comptroller that guidance to the nation's biggest banks is needed, a Fed spokesman confirmed last week, and it is now a question of how quickly it will happen. The core issue is just what Section 106 of the Bank Holding Company Act will let banks do. Outside sources were predicting that the guidance will hone in on where that line is to be drawn in future. The banks point out that at present, Section 106 does not ban tying if it is voluntarily entered into. And they argue the law says only if banks exact some "condition or requirement" for getting the loan (beyond routine banking services such as deposits) is tying illegal.

GEO Specialty Chemicals is waiting on approval from its senior lenders for a loan commitment that would help it avoid defaulting on a senior notes payment. Deutsche Bank and Citigroup lead GEO's existing $125 million credit, which includes a $105 million term loan priced at LIBOR plus 6%. GEO was in violation of credit facility covenants as of last June 30 and it missed an interest payment on its notes on Aug. 1. Now, the company is looking for approval of a new loan, which has been committed, so it can make the interest payment within a 30-day grace period. If GEO does not make the payment--$6.1 million--within the grace period, it will be in an event of default under a governing indenture.

San Jose, Calif.-based Calpine has incorporated a spark-spread hedge into a $750 million power plant refinancing package, a feature that ensures debt interest will be paid even if generation margins deteriorate for the gas-fired generation portfolio, according to sister publication Power, Finance & Risk. Bankers said the power plant financing is likely the first of its type to strip out commodity price risk through the use of a spark-spread floor.