Search results for

Time Warner Telecom has amended its $1 billion secured credit facility by reducing the line by 20% to cut excess capacity in exchange for relaxed covenants. David Rayner, senior v.p. and cfo, said the company did not see a reason to pay commitment fees on funding it was never going to need. The line was implemented in 2000 to refinance a $700 million bridge loan for the GST Telecommunications acquisition. But the credit was expanded beyond what the company ended up needing, he explained. "I didn't need the whole billion," Rayner said.

Leads Scotia Capital, CIBC World Markets and Credit Suisse First Boston have set pricing and launched syndication of the credit for Bell Actimedia. The success of Dex Media East augurs well for the transaction, said one buysider. However, he said there are differences between the transactions. "Actimedia has slightly higher senior leverage at 4.5 times," he noted. He also said being in Canada provides certain tax benefits. "All-in-all, this should price at least a little below Dex," he said. Dex was sold at 99 with a LIBOR plus 4% spread, though it broke above par after allocation.

An asset-backed securitization of equipment leases out of South Africa is currently being touted in a road show to investors and is scheduled to be priced within the next few weeks, say ABS officials. J.P. Morgan Securities is the lead manager on the R630 million deal, called Fintech. This is J.P. Morgan's first South African ABS deal, although the market is still in its developing stages--only R5.5 billion in South African ABS deals have been issued to date. Fintech will be the fifth deal originated in South Africa and the second this year.

Merrill Lynch and Credit Suisse First Boston are holding a bank meeting today to launch NDCHealth's new $200 million senior secured credit facility and $175 million 10-year senior subordinated notes offering, said a banker. The bank facility comprises a five-year, $75 million revolver and a $125 million, six-year "B" term loan. The revolver is priced at LIBOR plus 3%, while the "B" piece has an out-of-the-box spread of LIBOR plus 31/2 %. The commitment fee is 1/2% and the credit is rated BB/Ba3.

Merrill Lynch has released Barbara Scholl from her position as managing director and head of distressed fixed-income research, according to officials at the firm. She did not respond to messages left at her office and her residence. The officials say Scholl's work was mainly on behalf of a proprietary trading effort at Merrill. One of the officials, and another member of the distressed community, expressed surprise that Scholl was let go, as her group was believed to be profitable. Graham Goldsmith, head of the firm's distressed business, referred calls to a firm spokesperson, who did not respond by press time last Thursday.

Nextel Communications' bank debt could be on the cusp of cracking 90 in the near future, as both the bonds and bank debt continue to climb. One trader said a $5 million piece was traded at 89 1/2, but this could not be confirmed and he declined to name the participants. He attributed the bank debt's climb to the recent strong earnings announcement and the strength of the bonds. Over the week the bond price increased from 82 5/8 to 85 1/4 at press time, 20 points higher than in June.

OM Group's bank debt dropped 18 points to the mid-70s last week after the Cleveland-based specialty chemicals maker posted terrible results. "It's gone from being a par name to distressed territory in a couple of days," one dealer noted. Traders reported it was mostly the term loan "C" taking the hammering. As Loan Market Week went to press, the loan was being bid at 76.

The "B" term loan for Dex Media East immediately shot up to over par after allocation last Thursday. Traders and buysiders said the deal was bid between par and 100 5/8. The $700 million "B" piece was syndicated at 99 with a LIBOR plus 4% spread by J.P. Morgan, Bank of America, Deutsche Bank, Lehman Brothers and Wachovia Securities. Some investors were looking to be compensated for the anticipated glut of directory paper and anticipated a flex to LIBOR plus 41Ž 2%. There were also demands for an original issue discount feature that would prevent the second phase of the deal next year being sold with a higher yield than Dex Media East. This would prevent the paper from trading down, but this has not been incorporated, said a buysider.

Structurers and investors are likely to lose their ability to attain a desired rating by arbitraging ratings if, as expected a loophole that has allowed this practice is closed under the proposed Basel capital adequacy accords, according to BW sister publication Derivatives Week. Rating agencies assign different ratings for the same obligations because their methodologies and projected default curves are different. Investors and structurers are aware of this and frequently ask Moody's Investors Service to rate the lower tranches of a deal and Standard & Poor's or Fitch Ratings to rate the higher tranches.

Between $300-400 million of Leap Wireless International vendor-financing paper has traded over the last two weeks at heavily discounted levels as companies such as Ericsson, Nortel Networks, Qualcomm and Lucent Technologies look to escape exposure to the distressed name. Specialized hedge funds are said to be the buyers of the paper, with distressed-debt specialist The Seaport Group brokering the paper. "The vendors are not set up to think about the world this way," said a trader. "The distressed investors are playing on what they think the value in a reorganization will be," he added. Officials at Seaport declined comment.

When viewed over a span of decades, it becomes clear that the direction of interest rates is highly correlated with inflation. Thus, any successful attempt to forecast interest rate movements must also be an attempt to forecast inflation.