Vulcan prices rich to talk; Skype meeting set for Wednesday; Realogy second lien trades up

By Paul A. Harris

St. Louis, Sept. 28 - Double B rated bank loans were flat on Monday, however single B names jumped, according to a trader.

With the close of the third quarter, investors are cautious ahead of economic and financial data, the trader said.

However, at the same time lack of supply is causing some concern among portfolio managers.

Panic-buying of bank loans has not yet set in, said the trader.

"However there is buying," the source said.

"Considering the pay-downs that are coming, there is too much cash," the trader remarked, and added that the fourth quarter is not likely to produce new issuance that would be disproportionate compared to the comparatively meager issuance of the first three quarters of 2009.

Meanwhile the LCDX 12 index went home at 98.7 bid, 99 offered, 0.2 points higher on the day, according to a bank loan syndicate official.

Vulcan Energy prices at 99.50

Vulcan Energy Corp. priced a $280 million term loan at 99.50 on Monday.

The deal priced at the rich end of the 99 to 99½ price talk.

The coupon is Libor plus 325 bps, with a 2% Libor floor.

Bank of America led the deal, which also features a $5 million three-year revolver.

Proceeds will be used to refinance existing bank debt.

The deal was being marketed mainly to existing investors.

At the New York close the new loan was at par bid, par ½ offered, a trader said.

Realogy second lien gains

Realogy Corp.'s new 13½% eight-year second-lien term loan was seen trading substantially above the issue price a mid-day Monday, being quoted at 102 bid, 103 offered, according to a trader.

The $650 million two-part deal priced at par on Friday.

Of the total, $150 million of the deal was taken down by Carl Icahn.

Realogy said $515 million was drawn on Monday and an additional $135 million is expected to be drawn on Oct. 9, on the same terms.

JPMorgan led the deal.

The loan will mature in October 2017. This was changed from an originally proposed maturity of January 2014.

Also modified is the call protection, which has gone to non-callable for three years from non-callable for two years. The initial call price is 110.125.

Proceeds will be used to repay at least $365 million of borrowings on the company's $750 million revolving credit facility under its existing credit facility and refinance about $220 million of 11%/11¾% senior toggle notes due 2014 from affiliates of Icahn Partners, LP.

The net effect of the transactions is that Realogy will immediately reduce its outstanding debt by about $70 million.

Skype sets price talk

Skype Technologies will kick off $630 million of new credit facilities (B1) at a Wednesday bank meeting, according to market sources.

The deal, to help fund the LBO of the company, is comprised of a $600 million five-year term loan talked at Libor plus 600 basis points, with a 2% Libor floor, and a $30 million four-year revolver.

JP Morgan, Barclays Capital, and RBC Capital Markets are leading the deal.

The company is being acquired in a $2.75 billion LBO by a group of investors led by Silver Lake Partners.

Skype is a Luxembourg-based developer and operator of VoIP computer telephone services.

Meanwhile Warner Chilcott plc is scheduled to hold its bank meeting on Tuesday, for syndication of up to $2.75 billion of senior secured credit facilities (BB+).

Bank of America and Credit Suisse are the co-lead arrangers on the deal.

Warner Chilcott's credit facility, as outlined by a commitment letter filed with the Securities and Exchange Commission, consists of a $250 million five-year revolver priced at Libor plus 350 basis points, a $1 billion five-year term loan A priced at Libor plus 350 bps and a $1.5 billion 51/2-year term loan B priced at Libor plus 375 bps.

All tranches carry a 2.5% Libor floor.

Delta closes

Delta Air Lines said it completed its $2.1 billion of financing transactions, including a $750 million credit facility.

"The competitive terms and strong demand for this financing reflect the market's confidence in Delta and our financial strength," said Ed Bastian, Delta's president, in a news release. "With these transactions, we've addressed more than 40% of our 2010 maturities and generated an incremental $600 million to bolster our best-in-class liquidity position."

The Atlanta-based airline obtained a $750 million facility (Ba2) via Citigroup and Deutsche Bank made up of a $250 million four-year term loan at Libor plus 675 bps, priced at 98 with a 2% Libor floor, and a $500 million 31/2-year revolver.

Proceeds were used to repay borrowings under Northwest Airlines Inc.'s senior corporate credit facility.

Delta also sold $1.35 billion of bonds in an upsized sale.

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