Ford rises with tender deadline; Georgia-Pacific inches up; LCDX slides with stocks

By Sara Rosenberg

New York, March 19 - Ford Motor Co.'s term loan headed higher on Thursday as the deadline for the company's cash tender offer was scheduled for the end of the business day.

In more secondary happenings, Georgia-Pacific LLC's term loan B was stronger on the back of the company's earnings results, and helped as well by some overall strength in the general market.

Also, the LCDX 10 index was a little softer on a day-over-day basis as the stock market came in, while cash in general was described as firm.

Ford trades up

Ford's term loan gained some ground during the trading session as the company's cash tender offer for some of the debt was set to expire at the end of the day, according to a trader.

The term loan was quoted at 39 bid, 40 offered, up from 38 bid, 38½ offered on Wednesday, the trader said.

Earlier this month, Ford commenced a $500 million cash tender offer for its senior secured term loan debt, of which $6.9 billion is outstanding.

The term loan tender offer is being done as a Dutch auction in which lenders are being invited to submit bids to sell their term debt within a price range of 38 to 47.

If the aggregate purchase price for term loan debt tendered exceeds $500 million, Ford will purchase at the clearing price all loans tendered at a price below the clearing price and purchase loans tendered at the clearing price on a pro-rated basis.

Ford tender part of restructuring

Ford's term loan tender offer is part of a plan to restructure its balance sheet so as to significantly reduce debt and annual interest expense.

As part of this restructuring, the company is doing a $1.3 billion cash tender offer for its unsecured non-convertible debt securities, of which $8.9 billion is outstanding.

In addition, it has commenced a conversion offer relating to its $4.88 billion of 4.25% senior convertible notes due Dec. 15, 2036.

Ford is a Dearborn, Mich.-based automaker.

Georgia-Pacific heads higher

Georgia-Pacific's term loan B posted some gains on Thursday as the market itself felt better and investors continued to react positively to the company's recent financial results, according to a trader.

The term loan B was quoted at 86¾ bid, 87¾ offered, up from previous levels of 86¼ bid, 87¼ offered, the trader said.

On Wednesday, the company made available to current or potential investors in its corporate notes or debentures selected fourth quarter and full-year 2008 earnings information.

"Performed decent. Numbers weren't bad. Building products struggling, but consumer products rocking," the trader remarked.

Georgia-Pacific is an Atlanta-based manufacturer and marketer of building products, tissue, packaging, paper, cellulose and related chemicals.

MGM Mirage indicated better

MGM Mirage's term loan saw some indications on stronger levels during market hours despite a ratings downgrade although activity in the name was light, according to a trader.

The trader saw the term loan indicated at 45 bid, 50 offered versus levels of around 43 bid, 46 offered on Wednesday.

On Thursday, Moody's cut MGM Mirage's corporate family rating to Caa2 from Caa1 and the outlook is negative.

The downgrade reflects the very short-term waiver of potential covenant defaults that the company received from its bank lenders and the erosion of liquidity due to t a$300 million revolver reduction.

According to Moody's, there's now significant pressure on the company to relatively quickly come up with a plan to obtain additional bank concessions, raise additional liquidity, or pursue a major restructuring of its capital structure.

"Because of these factors, there is a rising probability that as part of a restructuring MGM will have to offer to exchange existing debt for an amount below par as part of any plan to alleviate its liquidity crunch," said Peggy Holloway, Moody's senior analyst, in the rating release.

MGM waiver expires May 15

As was previously reported, MGM Mirage's credit facility waiver allows the company to not comply with financial covenants through May 15.

Also, under the waiver, pricing on the revolver was increased by 100 basis points, the company is prohibited from prepaying or repurchasing any debt or disposing of assets, and the $300 million revolver repayment was made.

Following the expiration of the waiver, the company will be subject to an event of default under the credit facility if it is not in compliance with the financial covenants at March 31, which if adverse conditions in the economy and gaming industry continue, is a likely outcome.

The company said that it intends to work with its lenders to obtain additional waivers or amendments prior to the expiration of this one so as to address potential future non-compliance with covenants.

MGM Mirage is a Las Vegas-based gaming company.

LCDX dips with equities

The LCDX 10 index fell off during market hours in sympathy with the stock market, according to traders.

The index was quoted at 72.70 bid, 73 offered, down from Wednesday's levels of 73.25 bid, 73.45 offered, traders said.

As for equities, Nasdaq closed down 7.74 points, or 0.52%, Dow Jones Industrial Average closed down 85.78 points, or 1.15%, S&P 500 closed down 10.31 points, or 1.3%, and NYSE closed down 38.08 points, or 0.77%.

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