Trident breaks; Centennial seesaws on dividend; Compass cuts spread; Axia, USI considering flex up

By Sara Rosenberg

New York, Dec. 12 - Trident Exploration Corp. allocated its repriced and upsized second-lien term loan on Monday, with the tranche freeing for trading in the upper-101 to 102 context. Also, in trading, Centennial Communications Corp. fell early in the session on news of a shareholder dividend but regained its footing by day's end as investors saw the lower levels as a good buying opportunity.

In primary happenings, Compass Minerals Group reduced pricing on its term loan, and Axia Inc. and United Subcontractors Inc. are said to be evaluating pricing increases, with official news on the potential changes expected to hit the market any day.

Trident Exploration's second-lien loan broke for trading on Monday, with one trader quoting the paper at 101½ bid, 102 offered and a second source quoting the paper around 102 offered with no bids.

"I don't know if there's any paper for sale. I don't think it's traded. The paper is pretty well put away," the second source explained.

The $150 million add-on and the existing $175 million of second-lien debt are priced with an interest rate of Libor plus 750 basis points, are non-callable for one year and then callable at 102 in year two and 101 in year three.

Originally, the add-on was hoped to be sized at $200 million and pricing was expected to remain in line with where the existing second-lien debt had been priced - Libor plus 700 basis points. However, during syndication, the size of the add-on was reduced and pricing was flexed higher on both the incremental and the existing bank debt.

Credit Suisse First Boston and TD Securities are joint lead arrangers on the $325 million second-lien term loan, with CSFB the left lead.

Proceeds from the add-on will be used to acquire working interest rights and to buy out equity holdings of the Southern Ute Indian Tribe.

Trident Exploration is a Calgary-based company focused on the discovery and commercial development of natural gas in coal resources in the Western Canadian Sedimentary Basin.

Centennial falters on dividend

Centennial Communications' bank debt plunged by about half a point immediately after the company announced plans to sell senior notes to help fund a special cash dividend to stockholders, according to a trader.

However, once debt levels dropped off, some market players found the paper to be a good buy, which in turn ended up pushing the paper higher so that it ended up closing the session at unchanged levels, the trader explained.

The bank debt had gotten as low as par ¼ bid, par ¾ offered on the dividend payment news, before heading back to par ¾ bid, 101¼ offered, where it closed the day, the trader added.

Centennial plans on issuing about $550 million of senior notes to help fund the approximately $577 million dividend payment.

In addition, the company plans on prepaying about $39.5 million of borrowings under its senior secured credit facility in connection with the note offering.

The company is in the process of seeking an amendment to its credit facility to permit, among other things, the issuance of the senior notes and payment of the special cash dividend.

Centennial is a Wall, N.J., provider of regional wireless and integrated communications services.

Kodak heads higher

Eastman Kodak Co.'s bank debt traded up by about a quarter of a point as momentum and investor interest in the name continues to build, according to a trader.

The term loan closed the day quoted at par bid, par 3/8 offered and the delayed-draw term loan closed the day quoted at 99½ bid, 99¾ offered, the trader said.

Kodak is a Rochester, N.Y.-based digital imaging products, services and solutions company.

Compass reverse flexes

Compass Minerals reverse flexed pricing on its $350 million term loan to Libor plus 150 basis points from original price talk of Libor plus 175 basis points, according to a market source.

Pricing on the company's $100 million revolver was left unchanged at Libor plus 175 basis points, the source added.

JPMorgan and Goldman Sachs are joint lead arrangers on the $450 million senior secured credit facility (B1/BB-), with JPMorgan the left lead.

Proceeds from the facility will be used to help fund the tender offer for the company's $325 million 10% senior subordinated notes due 2011.

Compass is an Overland Park, Kan., producer of salt and sulfate of potash.

Axia flex up in the works

Axia is said to be in the process of flexing pricing higher on its term loan as some accounts have already been contacted by the syndicate and have been told to expect a spread change of 50 basis points, according to a buyside source.

The $150 million seven-year term loan is anticipated to flex up to Libor plus 325 basis points from original price talk at launch of Libor plus 275 basis points, the source said, adding that no official posting on the price change has been made as of yet.

Axia's $175 million credit facility (B2/B) also contains a $25 million five-year revolver.

UBS is the lead bank on the deal that will be used, along with an equity contribution, to fund the purchase of Axia by Aurora Capital Group.

Axia is a Houston-based manufacturer of packaging and other industrial equipment and construction machinery through three business units.

USI spreads may rise

United Subcontractors is also mulling over a potential increase in spreads, with talk being that pricing on the $295 million first-lien term loan (B2/B+) will be going to Libor plus 275 basis points from current price talk of Libor plus 250 basis points, a market source said.

In addition, rumor has it that syndication on the $65 million second-lien term loan (Caa1/B-) "is struggling too," leading some to expect a pricing increase on this tranche as well, the source said. Currently, the second-lien loan is talked at Libor plus 650 basis points.

United Subcontractors' $400 million credit facility also contains a $40 million revolver (B2/B+).

Citigroup is the lead bank on the deal that will be used to refinance existing debt and fund a dividend payment.

United Subcontractors is a Salt Lake City-based installer of residential and commercial insulation systems and provider of related products and services.

Petroleum Geo-Services ups spreads

Petroleum Geo-Services ASA increased price talk on its $1 billion credit facility (Ba3/B+), according to a market source.

The $850 million seven-year term loan is now being talked at Libor plus 250 basis points with a step down to Libor plus 225 basis points at 2.25x leverage, the source said. Previously, the tranche was being talked in the Libor plus 200 to 225 basis points range.

And, the $150 million five-year revolver is expected to price 25 basis points inside the term loan, meaning price talk on the tranche has now been raised to Libor plus 225 basis points from original price talk at launch of Libor plus 175 to 200 basis points, the source added.

UBS Securities LLC, Credit Suisse First Boston and Barclays Capital are the lead banks on the deal.

Proceeds will be used to refinance most of the company's existing debt, which includes tendering for all of its $746 million outstanding 10% senior notes due 2010.

Petroleum Geo-Services is an Oslo, Norway-based oilfield service company.

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