Continued investor confidence keeps pushing bids higher on Collins & Aikman paper

By Sara Rosenberg

New York, Oct. 15 - Collins & Aikman's bank debt once again felt stronger as the paper was quoted about a quarter of a point higher across the board in trading Wednesday. Although the company put out what appeared to be relatively positive news regarding an agreement with the UAW, some market sources attributed the rise to market technicals, in which people are searching for paper and now have the confidence to invest in this particular company following a bumpy ride about a week and a half ago.

The term loan A was quoted at 99 bid, the term loan B at par bid and the revolver at 96 bid, according to a trader.

The company announced on Wednesday that it has reached an agreement to form a partnership with the International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW) under which "both parties have pledged renewed energies and commitment to increase productivity, efficiency, long-term job security, and quality of operations that will maximize the competitive capability of the company," a news release said.

"We are extremely optimistic that this partnership with the UAW will assist us in both maintaining our current business and in achieving new business with our domestic OEM customers, which would be beneficial to Collins & Aikman, its employees and the UAW," said David A. Stockman, chairman and chief executive officer, in the release.

However, when asked whether this latest news could have been the impetus behind the strengthening in the bank debt, the trader responded: "It's more technical. There's a lot of money looking for a home. There's life in the market but it's all a question of getting paper and that's hard to do right now. Ever since [Collins & Aikman] had their conference call last week people are more comfortable."

Other recent good news that has possibly affected the bank debt was last Friday's announcement that the company signed a new contract with Ford Motor Co., selecting Collins & Aikman as a full-service supplier for a significant portion of the interior systems on the new Ford Futura.

About a week and a half ago the company's bank debt plummeted following the publication of a news story which claimed that DaimlerChrysler AG's Chrysler Group is looking to rebid nearly all of the current and future business.

Currently, the paper is about a 1½ points higher than its lows, according to a trader, which were seen in the market on the heels of that Chrysler story.

Collins & Aikman is a Troy, Mich. designer engineer and manufacturer of automotive interior components.

Charter Communications Inc. stabilized a bit on Wednesday after rallying last week and strengthening on Tuesday as well. The St. Louis cable company's term loan B was quoted at 971/4, in line with the previous day's quotes.

However, on Tuesday the debt was reported as higher by about a quarter of a point and last week the paper gained almost 200 basis points before settling a bit.

Charter's A loan traded at 97¼ on Tuesday and closed the day bid around that level, up from 97 bid, 98 offered.

In the primary, it was a pretty busy day as a number of deals launched including Genesis Health Ventures Inc., Exide Technologies and Basic Energy Services Inc.

Genesis held a bank meeting on Wednesday in New York regarding a $260 million senior credit facility (Ba3/BB-), according to a source close to the deal. Wachovia is the left lead arranger on the deal.

The facility consists of a $185 million seven-year term loan B with an interest rate of Libor plus 300 basis points and a $75 million five-year revolver with an interest rate of Libor plus 275 basis points.

Proceeds, combined with proceeds from a $200 million bond offering, will be used to help support the spin-off its eldercare operations into the newly formed eldercare company, Genesis HealthCare Corp.

Genesis Health Ventures is a Kennett Square, Pa. provider of healthcare services to the elderly.

Exide held a bank meeting for a $550 million senior secured exit financing facility. Deutsche Bank Cayman Islands is the administrative agent, and Deutsche Bank Securities Inc. is the lead arranger and bookrunner on the deal.

The facility consists of a $450 million term loan B with an interest rate of Libor plus 400 basis points and a $100 million five-year multicurrency revolver with an interest rate of Libor plus 250 to 400 basis points, depending on the company's leverage ratio.

The term loan will be used to refinance existing debt and the revolver will be used for working capital, capital expenditures and general corporate purposes.

Exide is a Princeton, N.J. manufacturer and marketer of lead acid batteries for the automotive and industrial markets.

Basic Energy held a bank meeting on regarding a $170 million credit facility. UBS is sole lead arranger and bookrunner on the deal.

The facility consists of a $130 million term loan B with an interest rate of Libor plus 350 basis points and a $40 million revolver with an interest rate of Libor plus 300 basis points.

Proceeds will be used to refinance existing debt and for acquisition purposes.

Basic Energy is a Midland, Tex. provider of well site services with a fleet of well-servicing rigs, fluid service trucks and related equipment.

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