Levi Strauss and AMI still trading relatively actively, AT&T revolver hits secondary

By Sara Rosenberg

New York, Sept. 24 - Levi Straus & Co. and AMI Semiconductor both enjoyed some trading activity on Wednesday, the second day that the new paper was around, although Levi was reported to be slightly lower than Tuesday's closing levels. Meanwhile, AT&T Corp.'s proposed revolver broke for trading, and once again captured the attention of some leveraged players.

Levi's floating-rate term loan B settled down a bit on Wednesday after a flurry of activity following its initial entrance into the secondary market on Tuesday, with quotes moving slightly lower to 102 1/8 bid, 102 5/8 offered, according to a trader. The paper closed at 102½ bid, 103½ offered on Tuesday.

The opening market on the floating-rate tranche on Tuesday was 102 bid, 103 offered, however at one point during the day some saw bids as high as 103 to 103.125.

Wednesday's market, although still considered strong and relatively high, did not see bids reach the 103 area that was noted previously, according to the trader.

These 102-plus levels have primarily been attributed to the hefty coupon, call protection and Libor floor that the paper contains. The $300 million floating-rate piece is priced at Libor plus 687.5 basis points (down from initial price talk of Libor plus 700 basis points) and contains a 2% Libor floor. The $200 million fixed-rate piece is priced at 10%.

The $1.15 billion credit facility also contains a $650 million asset-based revolver maturing in 2007 with an interest rate of Libor plus 275 basis points.

Bank of America is the lead bank on the deal, which will replace the San Francisco brand name clothing company's existing senior secured credit facility consisting of a $375 million revolver and $365 million term loan, as well as $110 million of debt arranged under an accounts receivables securitization.

AMI Semiconductor's new paper traded a bit on Wednesday, with the revolver trading around 98 and the term loan B bid at 101, according to a trader. The new paper first entered the secondary bank loan market on Tuesday.

The $200 million credit facility consists of a $75 million three-year revolver with an interest rate of Libor plus 300 basis points and a 50 basis points commitment fee, and a $125 million five-year term loan B with an interest rate of Libor plus 250 basis points.

Credit Suisse First Boston is the administrative agent and joint lead arranger, Goldman Sachs is the syndication agent and joint lead arranger and Lehman Brothers is the documentation agent.

The Pocatello, Ida.-based designer and manufacturer of application-specific integrated circuits sought the new facility in connection with an initial public offering by its parent AMIS Holdings, Inc., which priced on Wednesday. The company agreed to sell 25.145 million shares of its common stock at $20.00 per share.

The net proceeds of the offering, together with the proceeds from the new $125 million senior term loan, will be used by AMIS to repay $39.9 million principal balance of its existing term loan, redeem $70 million principal amount of its senior subordinated notes at a total cost of $77.5 million plus accrued interest and redeem all of its outstanding redeemable preferred stock.

AT&T's $2 billion 364-day revolver broke for trading on Wednesday, and like last time this investment-grade company brought a bank deal to market there was a decent following in the leveraged market for the paper.

"It traded a few times today in the upper 99's, around the 99¾ area," a trader said. "There were a lot of people interested in it and I heard it went well. Not like last time when I heard it struggled a little bit. But this one is also much smaller. There's a general market appetite for new issues so even though it's investment grade a lot of secondary guys are willing to buy the paper."

JPMorgan and Citigroup are the lead banks on the deal for the New York provider of communications services.

In October 2002, AT&T obtained a $4 billion 364-day syndicated bank loan, which replaced an undrawn $8 billion bank loan. In comparison to the new revolver's levels, the facility in October broke for trading with a bid of 92 and an offer of 93. However, quotes on the paper did continue to rise in the following weeks. At that time, the Baa2 rated loan was said to be receiving attention from the leveraged market due to its below-par trading levels and enormous size.

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