Ford bounces around ahead of draw; Freescale term B softens; LCDX slides, cash unchanged

By Sara Rosenberg

New York, Feb. 2 - Ford Motor Co.'s term loan was jumping around throughout Monday's trading session as the company is getting ready to receive the funding from its revolving credit facility draw.

Also in trading news, Freescale Semiconductor Inc.'s term loan B was a little weaker on the day, and LCDX 10 headed lower while the cash market in general was basically unchanged in light activity.

Ford term loan seesaws

Ford's term loan levels were all over the place during market hours - with the end result being that the debt was slightly better on a day-over-day basis - being that company's draw should be completed soon, according to a trader.

The term loan was quoted at 35 7/8 bid, 36 7/8 offered late in the day, the trader said, up from Friday's levels of 35¾ bid, 36¾ offered.

However, earlier in the Monday session, the loan was seen as low as 35 bid, 36 offered, the trader remarked.

"Revolver funds tomorrow. [Term loan] been kind of jumping around because of this funding," the trader continued.

As for the revolver, on Friday levels were seen at 30 bid, 31 offered, but levels were nowhere to be found on Monday, the trader said.

"You would think it would tick higher, but haven't seen it," the trader added regarding the revolver's trading levels.

Ford borrowing more than $10 billion

Towards the end of last week, Ford revealed that it would be drawing $10.1 billion under its available credit lines.

The company said that it expects to receive the funds on Tuesday.

Ford explained that the draw is being made as a result of the instability of the capital markets with the uncertain state of the global economy.

In conjunction with announcing the draw, Ford reaffirmed that it has sufficient liquidity to fund its business plan and product investments, with $24 billion in available automotive liquidity, including $13.4 billion in automotive gross cash, at the end of 2008.

The company also reiterated that, based on current planning assumptions, it does not need a bridge loan from the U.S. government, barring a significantly deeper economic downturn or a significant industry event, such as the bankruptcy of a major competitor that causes disruption to the company's supply base, dealers or creditors.

Ford is a Dearborn, Mich.-based automotive company.

Freescale B loan dips

Freescale Semiconductor's term loan B was a touch softer During Monday's market hours, although no real reason was seen behind the movement, according to a trader.

The term loan B was quoted at 51 bid, 52 offered, down from Friday's levels of 52 bid, 53 offered, the trader said.

The loan was moving around quite a bit at the end of last week following the release of quarterly results by the company, and even reached a low or around 48 bid, 50 offered on the news.

For the fourth quarter, Freescale reported a net loss of $4 billion, compared to a loss of $525 million in the last year's fourth quarter, loss from operations was $4.2 billion, compared to a loss of $595 million last year, and adjusted EBITDA for the fourth quarter was $94 million.

As for the company's financial position, on Dec. 31, 2008, cash, cash equivalents and short-term investments were $1.4 billion, compared to $1.3 billion on Sept. 26, 2008.

Freescale is an Austin, Texas-based designer and manufacturer of embedded semiconductors for the transportation, networking and wireless markets.

LCDX drops, cash volume remains light

LCDX 10 lost some ground on Monday as stocks were mostly lower, but the cash market was essentially unchanged because of a lack of activity, according to traders.

The index was quoted at 76.35 bid, 76.55 offered, down from Friday's levels of around 77.25 bid, 77.75 offered, one trader said.

NYSE closed down 29.32 points, or 0.56%, Dow Jones Industrial Average closed down 64.11 points, or 0.80%, S&P 500 closed down 0.44 points, or 0.05%, and Nasdaq closed up 18.01 points, or 1.22%.

As for the cash market, a second trader remarked, "It's been quieter the past two weeks or so."

"Cash flow CLOs are just sort of stagnated and all the hedge funds that needed to get out, did, and there's just no new money coming in," the second trader added.

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