Search results for

WorldCom bank debt ticked up slightly on news that the company has filed its plan of reorganization. While the plan suggests that senior debt holders, including lenders, will receive 35.9 cents on the dollar, the bank debt paper only crawled about two points higher to the 26 27 1/2 context. The bank debt is quoted about a point behind the company's bonds due to its relative illiquidity. No bank debt was said to have traded. "The real question is if the banks will want to sell," said one trader, explaining that the amount of equity that lenders will ultimately receive under the reorganization plan will affect whether or not there will be any sellers.

YUM! Brand's multi-branding strategy--which places a combination of any two of its restaurant food brands, such as KFC and Taco Bell, on a single site --has produced strong initial results in a saturated and highly competitive U.S. market for quick service restaurants, according to Fitch Ratings. Steady operating performance, continued growth in international markets and stable leverage all factor into YUM's BB+ rating. The outlook on the $1.2 billion credit has been changed to positive. "It's a huge consumer and financial win," said, Kathleen Corsi, YUM's senior v.p. and treasurer, regarding the multi-branding strategy. Corsi added the company reaps 50% more profitability from the strategy. "Our customers love it," she said, explaining that consumers, especially families, like having choices.

Duke Street Capital Debt Management, a London, U.K.-based asset management group, has raised the debt for a EUR 550 million collateralized debt obligation called Duchess II CDO, the firm's second CDO. The deal predominantly comprises European leveraged loans with a small bucket for Euro-denominated U.S. loans, explained David Wilmot, a director of Duke Streets' debt management business.

Mohegan Tribal Gaming Authority landed an increased $391 million credit in an effort to obtain more liquidity for the gaming company. Jeffrey Hartmann, cfo of Mohegan Tribal, compared the new facility to the old line, which was a $500 million reducing revolver, which terminated $50 million of availability every quarter. When the new deal was completed, Mohegan Tribal had $300 million in availability under the old deal, Hartmann said.

A $26 million hybrid piece of The Goodyear Tire & Rubber Co.'s senior bank debt was auctioned off north of 90 1/2 last week. The piece that changed hands comprised portions of the company's $750 million U.S. revolver, $645 million U.S. term loan, as well as its $650 million European credit. For the blended piece, the trend in price is upward, said one dealer. The company's revolver last traded in the 87 context and the term loan was said to have traded in the 91 context before the auction.

Le Nature's originally proposed $200 million bank facility led by Wachovia Bank was shaved down to $150 million during syndication with structural changes, including a second lien loan being introduced before closing. At the time of launch, the credit comprised a $40 million revolver, a $125 million "A" loan, and a $35 million capital expenditure facility, all priced at 41/2% over LIBOR. John Higbee, Le Nature's cfo, said it did not make sense for the company to pay commitment fees on a line that it did not need at this time. "We'd be spending unnecessarily," he added, explaining the reason for the reduction in the size of the credit. Higbee noted Latrobe, Pa.-based Le Nature's would continue with plans to expand the beverage company's plants, but with internally generated funds.

The bank debt for Levi Strauss & Co. slipped after two former employees filed a lawsuit against the company alleging that the San Francisco-based clothing maker had booked income and tax deductions incorrectly, thereby inflating profit. The company adamantly denies that there is any cause for the concern. "There's no fraud," said Joseph Mauer, Levi v.p. and treasurer. "This is a wrongful termination lawsuit. We take great offense that anyone would think the company accounted for things inappropriately." Mauer emphasized that accounting issues brought forth in the suit were approved by the company's former auditors, Arthur Andersen, as well as its new auditors, KPMG International.

TMP Worldwide has opted for a new $100 million credit facility that is not asset-based, as previous deals have been under lead GMAC Commercial Finance, in order to enhance relationships with banks that can do more non-loan business with the company. Dave Trapani, TMP's treasurer, said the company is interested in tapping other services such as treasury management and foreign currency transactions from new lead lender Fleet National Bank and agent level banks The Royal Bank of Scotland and LaSalle Bank.

A $14 million auction of AMR Corp.'s American Airlines bank debt went off in the 57 range a week ago last Friday, according to dealers. The loan had been quoted in the low 50s range and traded up ahead of a deadline for the company's unions to ratify an agreement that will allow the airline to avert $1.8 billion in costs annually and stave off bankruptcy. Last Wednesday, American Airlines received union approval for the cost-cutting measures. Traders were unsure if more of the American Airlines paper will trade given the loan's relative illiquidity. The piece that traded came from the company's $834 million revolver that expires in December 2005. According to a recent company filing, the revolver is fully drawn.

Deutsche Bank and UBS Warburg filled out the $500 million "B" loan for Amphenol less than a week after launch despite some grumblings from investors that the deal would need higher pricing and more than stock-security to sell the credit. The seven-year term loan is priced at LIBOR plus 21/2%. "People did raise [the security] as an issue, [but] people got over it," said a banker familiar with the deal. He said a chunk of buysiders did shy away from the deal, but there was still a good amount that invested.

Ethyl Corp.'s $115 million "B" term loan oversubscribed last week after Credit Suisse First Boston and UBS Warburg increased the spread from LIBOR plus 4% to LIBOR plus 41/2%. A banker said syndication had been moving somewhat slowly after launching on April 2, with investors raising concerns over both security and pricing. But after the pricing boost and some added amortization, about 20 investors were expected to sign onto the credit. One source said BlackRock and Conseco were close to investing in the credit, but officials at both firms declined comment. The deal includes a $50 million revolver with a spread of 31/2% over LIBOR. The banker said the revolver was still waiting on more commitments, but he expected it to fill out this week. Bankers at CSFB and UBS declined comment.

Manor Care, a long-term healthcare provider, has switched its focus to short-stay patients from custodial-type patients, creating more profitability and reducing competition from other assisted living centers, according to Moody's Investors Service. But while the successful transition of the business model is a factor in the Ba1 rating of Manor Care's $200 million unsecured credit, Moody's also considers that the company has subsequently taken on more risk through increased dependence on Medicare patients.