Sprint PCS affiliate paper drops, NDCHealth, PerkinElmer plan deals

By Paul A. Harris

St. Louis, Mo., Oct. 29 - Bank debt of Sprint PCS affiliates was heard to be softening in the leveraged loan market Tuesday on news of ratings downgrades, while OM Group Inc. and Charter Communications were suffering from the bad news of third-quarter results.

Meanwhile new paper was heard to be coming from NDCHealth Corp., PerkinElmer, Inc. and Centerpoint Energy.

And offerings from Rexnord Corp., National Waterworks Inc. and Ball Corp. were reported to be launching this week.

On news Monday that Moody's Investor Services downgraded credit ratings for seven Sprint PCS affiliates including AirGate PCS Inc., Alamosa Holdings PCS Inc., Horizon PCS Inc., iPCS Inc., Independent Wireless One Inc., and UbiquiTel Inc. with negative rating outlooks, one trader told Prospect News that paper was softening pretty much all around.

Listing UbiquiTel, iPCS and Alamosa the source said: "Nothing was really being traded but they're being quoted a lot softer."

When Prospect News inquired about levels the source said "40s for the Sprint affiliates."

Meanwhile news that Cleveland-based OM Group missed its third-quarter earnings estimate because of falling cobalt prices - news that caused its share prices to plummet 71% on Tuesday - seemed to be causing the batteries to run down on its loan paper as well, the trader remarked.

"They were offered at 96, but there was no bid," the source said.

And while Charter Communications' third-quarter news has been bullying its securities, the trader said that on Tuesday Charter's paper "seems to be pretty flat, around 80-81. It was quoted at 79 but I don't think anything really traded."

Meanwhile among the issues that are active or new, one official told Prospect News he anticipated launches during the week of Oct. 28 for Rexnord Corp.'s $435 million credit facility, led by Deutsche Bank and Credit Suisse First Boston, Ball Corp.'s $1.4 billion via Deutsche Bank and Bank of America, and National Waterworks Inc.'s $325 million loan via Goldman Sachs, JPMorgan and UBS Warburg

Finally news of new issuance emerged Tuesday from various sources.

NDCHealth, an Atlanta, Ga. healthcare information services provider, will bring a $200 million facility comprised of a term loan and a revolver along with a Rule 144A offering of $175 million 10-year senior subordinated notes, with Credit Suisse First Boston and Merrill Lynch & Co. running the books on the bond deal. The company, which specializes in processing claims information for pharmacies, will use the money to redeem its 5% convertibles due November 2003 and pay off the existing revolver.

Company spokesperson Betty Feezor told Prospect News that the new financing also figures into the healthcare information services provider's two-stage acquisition of TechRX. "The second step will be occurring in May 2003," Feezor commented. "We expect this refinancing plan to also provide liquidity for the second step of the acquisition."

Also on Tuesday, PerkinElmer, Inc. announced it has a commitment for a new $445 million credit facility led by Merrill Lynch as well as plans for a $225 million note offering. The deal includes a $100 million five-year revolver with the remainder being a six-year term loan.

Rob Friel, the chief financial officer, noted in a conference call that interest rates will be set by the market, but added that he expects the term loan will come in the range of Libor plus 300 to 350 basis points.

And CenterPoint Energy Inc. held a bank meeting on Tuesday regarding a new $420 million senior secured term loan led by Credit Suisse First Boston, Deutsche Bank and Bank of America, according to a syndicate source. The Houston energy delivery company's term loan was priced with an interest rate of Libor plus 450 basis points and has a term of three years.

Finally on Tuesday chatter kept apace on the mammoth Dex Media East LLC $1.49 billion facility (Ba3/BB-), led by JPMorgan, Bank of America, Deutsche Bank, Lehman Brothers and Wachovia Securities.

The $100 million revolver is heard pricing at Libor plus 300 basis points, while the $690 million term A is at Libor plus 300 basis points and the $700 million term B is at Libor plus 400 basis points.

The jumbo deal to fund first phase of acquisition of QwestDex, Qwest Communications' yellow pages/directories business in seven western states by the Carlyle Group and Welsh, Carson, Anderson & Stowe also contains a two-tranche $975 million junk bond deal via JP Morgan, Banc of America Securities, Deutsche Bank Securities, Lehman Brothers, Wachovia Securities.

One informed source on the bond deal told Prospect News that it could conceivably be priced by the time readers sit down to read the Oct. 30 Prospect News Bank Loan Daily. Other sources, however, said that Wednesday or even Thursday are better bets.

"There's nothing but good news for debt-holders," one syndicate official said Tuesday, referring to Monday's news that the equity sponsor will pony up an additional $75 million.

"That deal has been well received in both the bank market and the bond market," the source added.

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