GM breaks; Ford steady on financing news; ACS dips with resignations; Dura narrows down price talk

By Sara Rosenberg

New York, Nov. 27 - General Motors Corp.'s term loan freed for trading on Monday atop par, Ford Motor Co.'s bilateral loan held firm after the company announced plans for a new secured credit facility and Affiliated Computer Services Inc. softened on the heels of management resignations.

In the primary market, Dura Automotive Systems, Inc. is anticipating pricing on its institutional bank debt to fall out at the midpoint of talk.

General Motors' $1.5 billion seven-year senior secured term loan (Ba3/B+/BB) hit the secondary during Monday's market hours, with levels quoted at par 3/8 bid, par 5/8 offered on the open and then moving down to par ¼ bid, par ½ offered, where it closed the session, according to a trader.

The term loan is priced at Libor plus 237.5 bps and carries 101 soft call protection for one year. During syndication, pricing on the term loan was reverse flexed from original talk at launch of Libor plus 275 bps.

JPMorgan and Credit Suisse are the joint lead arrangers on the deal, with JPMorgan the administrative agent.

Security is a first-priority interest in machinery and equipment and special tools located at GM's U.S. manufacturing facilities.

Proceeds will be used to enhance the Detroit-based automaker's liquidity.

Ford levels hold up

Another auto name that took the spotlight in the secondary market was Ford, as the company announced plans for a new $15 billion senior secured credit facility that will be launched with a bank meeting on Wednesday, according to a trader.

The company's existing bilateral loan was quoted at 95 bid, 96 offered, unchanged on the day since the anticipation of the news was priced in early last week when the company revealed that it was looking into obtaining new secured financing to provide extra liquidity, the trader explained.

The new credit facility, being led by Citigroup, Goldman Sachs and JPMorgan, consists of an $8 billion five-year revolver and a $7 billion term loan B.

Security is first-priority liens on principal domestic manufacturing facilities and substantially all of the company's other domestic automotive assets, certain intellectual property, certain real property, all or a portion of the stock of certain subsidiaries, certain intercompany payables and notes, and up to $4 billion of domestic cash without restriction on its use.

Proceeds from the credit facility, along with about $3 billion raised in unsecured capital market transactions, will be used to replace the company's existing unsecured $6.3 billion credit facility, address near- and medium-term negative operating-related cash flow, fund its restructuring, and provide added liquidity to protect against a recession or other unanticipated events.

Ford is a Dearborn, Mich.-based manufacturer and distributor of automobiles.

Affiliated Computer weaker

Affiliated Computer's term loan Bs headed lower in trading after the company revealed changes to its executive management that resulted from an internal investigation into historical stock option practices, according to a trader.

The company's term loan B-1 and term loan B-2 closed the day at par 1/8 bid, par 3/8 offered, down from last week's levels of par ¼ bid, par ½ offered, the trader said.

On Monday, Affiliated Computer announced that its chief executive officer, Mark A. King, and chief financial officer, Warren D. Edwards, resigned, effective Nov. 26, since an investigation concluded that certain conduct of the two executives violated the company's code of ethics for senior financial officers.

In their place, the company's board of directors has appointed Lynn Blodgett, who has been serving as executive vice president and chief operating officer, as president and chief executive officer, and John Rexford, who has been serving as executive vice president - corporate development, as executive vice president and chief financial officer.

The company is continuing to review and evaluate the results of its internal investigation and recent accounting guidelines established by the Securities and Exchange Commission to determine the accounting consequences of the use of incorrect measurement dates during the period from 1994 through 2005. It currently expects that the incremental cumulative non-cash compensation expense related to incorrect accounting measurement dates will be about $51 million, plus additional tax related expenses.

Affiliated Computer is a Dallas-based provider of business process outsourcing and information technology solutions to world-class commercial and government clients.

Dura expected mid-talk

Dura Automotive Systems is expecting that the spread on its $150 million term loan B and $20 million synthetic letter-of-credit facility will end up at the mid-range of pricing guidance, according to a market source.

It is thought the two institutional tranches will price at Libor plus 325 bps, right in the middle of the Libor plus 300 to 350 bps price talk that investors were being guided toward, the source said. However, this pricing has not yet been finalized, the source warned.

The term loan and synthetic letter-of-credit facility are part of Dura's $300 million debtor-in-possession financing facility, which also includes a $130 million asset-based revolver priced at Libor plus 175 bps.

Goldman Sachs, GE Capital and Barclays are the lead banks on the deal.

Dura has already obtained final court approval for the DIP facility.

Proceeds will be used to fund normal business operations and continue the company's operational restructuring program initiated in February 2006.

Dura is a Rochester Hills, Mich.-based automotive parts maker.

Sirius wraps syndication

Sirius Computer Solutions Inc. has wrapped up syndication of its $215 million credit facility, with all tranches reaching oversubscription levels and terms expected to remain unchanged from those that the deal was launched with, according to a market source.

The deal consists of a $30 million five-year revolver (Ba2) priced at Libor plus 275 bps, a $130 million six-year first-lien term loan (Ba2) priced at Libor plus 275 bps and a $55 million 61/2-year second-lien term loan (B2) priced at Libor plus 600 bps with call protection of 102 in year one and 101 in year two.

Credit Suisse is the lead bank on the deal that will be used to fund the leveraged buyout of Sirius by Thoma Cressey Equity Partners.

Leverage through the first lien is 2.9 times, and leverage through the second lien is 4.1 times.

Sirius is a San Antonio computer hardware and software distributor.

Visteon closes

Visteon Corp. closed on its $200 million secured term loan add-on (Ba3), according to a company news release. JPMorgan and Citigroup acted as the lead banks on the deal.

The add-on is priced at Libor plus 300 bps, in line with existing term loan pricing.

Proceeds are being used to enhance liquidity.

Visteon is a Van Buren Township, Mich., automotive parts supplier.

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