Freescale drops on new loan plans; Dollar General up with sales results; LCDX down with stocks

By Sara Rosenberg

New York, Feb. 10 - Freescale Semiconductor Inc.'s term loan headed lower on Tuesday following the company's announcement that it is looking to get a new incremental term loan to refinance some bonds.

In more trading happenings, Dollar General Corp.'s term loan debt was on the rise as the company reported an increase in sales in the recent quarter, and Live Nation Inc. and Ticketmaster Entertainment Inc. held pretty steady on their merger news.

Also, LCDX 10 posted some losses as equities weakened, while on the cash side, par names in general held up fairly well but distressed names seemed to suffer a little.

Freescale term loan slides

Freescale Semiconductor's term loan weakened during the trading session as the company revealed its intention to obtain a new term loan, according to a trader.

The company's existing term loan was quoted at 48 bid, 50½ offered by late day, down from early Monday levels of 52 bid, 53 offered, the trader said.

On Tuesday morning, shortly after the news first hit, the term loan was being quoted pretty wide at 46 bid, 51 offered, the trader continued.

The trader went on to explain that the term loan softened since bank debt guys don't really want more bank debt at the company.

Freescale loan priced at 12.5%

Freescale's proposed new up to $1 billion incremental term loan due Dec. 15, 2014 will carry pricing of 12.5%, according to an 8-K filed with the Securities and Exchange Commission.

The new term loan will be guaranteed by the same guarantors under its senior secured credit facility.

Holders of the company's existing notes, including the senior floating-rate notes due 2014, the 9 1/8%/9 7/8% senior PIK-election notes due 2014, the 8 7/8% senior fixed-rate notes due 2014 and the 10 1/8% senior subordinated notes due 2016, were invited to participate in the new incremental term loan.

Also invited to participate in the new loan are the company's existing credit facility lenders.

Bank lenders have a deadline of 5 p.m. ET on Feb. 19 to commit to the new loan, and funding of these orders must take place by 11 a.m. ET on March 17.

Commitments from the existing bank group would reduce the amount of term loan available to noteholders, meaning that if the bank lenders commit to all $1 billion, noteholders would be unable to participate in the deal.

Freescale to refinance notes with loan

Proceeds from the new incremental term loan will be used by Freescale to refinance its existing notes.

According to the company, the purpose of the transaction is to improve its financial flexibility by reducing overall debt and related interest expense.

For noteholders, up to $250 million of the senior PIK-election notes, which are priority one, and up to roughly $746 million of the senior subordinated notes, which are priority two, can be swapped for the new term loan debt.

The senior floating-rate notes are acceptance priority three, and the senior fixed-rate notes are acceptance priority four. Maximum amounts for swaps of these notes are not available.

Each note invitation will terminate at midnight ET on March 10.

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

Dollar General better

Dollar General's term loans climber higher Tuesday after sales results for the fiscal fourth quarter came out, according to a trader.

The company's term loan B-1 was quoted at 86 bid, 87½ offered, up from Monday's levels of 85 bid, 85½ offered, and the term loan B-2 was quoted at 82 bid, 82¾ offered, up from 80 bid, 80¾ offered, the trader said.

For the fiscal fourth quarter ended Jan. 30, Dollar General reported total sales of $2.85 billion, up 11.2% from 2007 fourth-quarter sales of $2.56 billion.

Same-store sales for the quarter increased 9.4%.

The company explained that sales continued to benefit from strategic operating initiatives implemented during the year to increase both customer traffic and average ticket, while facing a difficult economic environment for the consumer. Sales of seasonal merchandise and other discretionary items were impacted by the weak economy as well as a shorter holiday selling season.

Dollar General is a Goodlettsville, Tenn.-based discount retailer.

Live Nation, Ticketmaster hold firm

Live Nation and Ticketmaster saw their term loan levels remain fairly steady during the session as the companies announced that they are merging - a move that has been rumored since last week, according to a trader.

Live Nation's term loan was quoted at 78 bid, 81 offered, and Ticketmaster's term loan was quoted at 81 bid, 83 offered, both pretty flat on the day, the trader said.

The joining of the two companies into one entity that will be called Live Nation Entertainment will be completed through a tax-free, all-stock merger of equals with a combined enterprise value of about $2.5 billion.

Ticketmaster shareholders will receive 1.384 shares of Live Nation common stock for each share of Ticketmaster they own, and in the end, Live Nation and Ticketmaster shareholders will each own about 50% of the combined company.

Ticketmaster lenders need to OK deal

The merger of Ticketmaster and Live Nation is subject to the approval of Ticketmaster's bank loan lenders, according to an 8-K filed with the SEC.

The Ticketmaster lender consent process is targeted to be completed in six to eight weeks, the filing added.

Other conditions to the transaction include Live Nation and Ticketmaster shareholder approval and regulatory approvals.

Closing is targeted to take place in the second half of 2009.

Pro forma, as of Sept. 8, the combined company's debt to last-12-months adjusted operating income is 3.4 times, and the debt to last-12-months adjusted operating income including synergies is 3.2 times.

Live Nation is a Los Angeles-based producer, marketer and seller of live concerts. Ticketmaster is a West Hollywood, Calif.-based live entertainment ticketing and marketing company.

LCDX dips with equities

LCDX 10 headed to lower ground on Tuesday in sympathy with the stock market, according to traders.

The index was quoted at 74.70 bid, 75 offered, down from Monday's levels of around 76 bid, 76.30 offered, traders said.

Nasdaq closed down 66.83 points, or 4.20%; NYSE closed down 265.17 points, or 4.84%; S&P 500 closed down 42.73 points, or 4.91%; and the Dow Jones Industrial Average closed down 381.99 points, or 4.62%.

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