Mirant exit facility breaks atop 101; Retail sector gets boost from sales numbers

By Sara Rosenberg

New York, Jan. 5 - Mirant North America LLC's exit facility allocated and freed for trading on Thursday, with the paper quoted right atop 101 on the break.

In other secondary happenings, a good amount of attention was focused on the retail sector as a number of companies released positive December sales numbers, which in turn created better bids for names like The Neiman Marcus Group Inc. and The Jean Coutu Group Inc.

Mirant North America's exit financing credit facility (Ba3/BB-/BB) freed for trading late in the afternoon Thursday, with levels on the institutional portion of the deal quoted at 101 bid, 101 3/8 offered, according to traders.

The institutional portion of the facility is comprised of a $500 million seven-year term loan and a $200 million pre-funded letter-of-credit facility that are currently being traded as a strip, traders said.

The term loan and pre-funded letter-of-credit facility are both priced with an interest rate of Libor plus 175 basis points. During syndication, pricing on both these tranches was reverse flexed from Libor plus 200 basis points.

Mirant's $1.5 billion exit facility also contains an $800 million six-year revolver with an interest rate of Libor plus 225 basis points.

JP Morgan, Deutsche Bank and Goldman Sachs acted as the lead banks on the deal, with JPMorgan the left lead.

Proceeds from the exit facility, which closed a few days ago, are being used to fund intercompany restructuring transactions and to help pay claims against the consolidated Mirant Americas Generation LLC debtors.

Mirant is an Atlanta-based power company.

Retail buoyed by December revenues

The retail sector as a whole felt better bid on Thursday, nabbing the attention of secondary players, as store after store put out favorable December sales numbers, according to a trader.

Two names in particular that saw a noticeable skip in levels were Neiman Marcus - which was one of the companies that put out favorable results - and Jean Coutu - which although December sales weren't announced, felt the positive momentum that was generated in the sector overall.

Neiman Marcus' term loan B was about an eighth of a point stronger on the day with levels closing out the session at 101 bid, 101¼ offered, the trader said.

Meanwhile, Longueuil, Quebec-based drugstore chain Jean Coutu saw its term loan B quoted a quarter of a point better on the day with levels closing out the session at 101¼ bid, 101¾ offered, the trader added.

On Thursday, Neiman Marcus announced that in the five-week December period, comparable revenues in the specialty retail stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, increased 5.3%.

And, comparable revenues at Neiman Marcus Direct in the five-week December period increased 25.4%.

Furthermore, the Dallas-based high-end specialty retailer estimates that for the five weeks ended Dec. 31, 2005 total revenues were $650 million, up 11.1% from the $585 million of total revenues generated in the five week period ending Jan. 1, 2005.

But, Neiman wasn't the only company to announce favorable December financials. A whole slew of results came in from various companies in order to spark the better trading tone.

For example, Birmingham, Ala.-based department store operator Saks Inc. saw total comparable store sales increase by 2.4% year over year.

In addition, Philadelphia-based apparel company Deb Shops Inc. saw its comparable store sales increase 4.5% year over year and total sales increase 4.7% to $42.7 million from $40.7 million for the month ended Dec. 31, 2004.

And, as a last example, Brisbane, Calif.-based apparel company Bebe Stores Inc. saw an increase of 11.1% in retail sales to $84.2 million for the five-week period ended Dec. 31, 2005 from $75.8 million for the five-week period ended Jan. 1, 2005.

Secondary stronger

Overall, the secondary as a whole felt stronger on Thursday, with some attributing factors explained to be the performance in the retail sector and the performance of the high-yield market, according to a trader.

The loan market in general was said to be up at least an eighth of a point and possibly even as much as a quarter of a point, the trader added.

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