Global Tel*Link delays launch; Hanesbrands pulls amendment request; Las Vegas Sands retreats

By Sara Rosenberg

New York, Nov. 13 - On the new deal front, Global Tel*Link Corp. decided to postpone the previously scheduled Thursday bank meeting for its proposed credit facility and no indication of new timing was given to potential investors.

In other news, Hanesbrands Inc. retracted its amendment request to buy back some of its term loan B debt, being that the required amount of lenders consents was not received by the posted deadline.

Over in the secondary, Las Vegas Sands Corp.'s strip of institutional bank debt gave up some of its previous day's gains possibly because investors started to realize that the company's avoidance of non-compliance with covenants may not be in their best interest, and NewPage Corp.'s term loan softened up after the release of third quarter numbers, although trading in the name was minimal.

Global Tel*Link launch pushed off

Global Tel*Link decided to push off the launch of its proposed $235 million credit facility, with no reason for the delay given and no new date set, according to market sources.

The deal had previously been scheduled to launch with a bank meeting that was going to start at 10 a.m. ET in New York on Thursday.

Credit Suisse and Wells Fargo Foothill are the lead banks on the credit facility that consists of a $25 million revolver and a $210 million term loan that includes a $45 million deposit letter-of-credit carve-out.

Global Tel*Link price talk

Price talk on the Global Tel*Link credit facility was being circulated earlier this week at Libor plus 600 basis points, with original issue discount still to be determined.

Proceeds will be used to help fund the buyout of the company by Veritas Capital and GS Direct from the Gores Group in a transaction that is expected to close by year end.

Global Tel*Link is a Reston, Va.-based provider of telecommunications, software and technology products and services to inmates, investigators and administrators in the corrections industry.

Hanesbrands amendment canceled

Hanesbrands let lenders know on Thursday that its amendment request to repurchase some of its term loan B debt in the secondary market at secondary prices was pulled since it fell short of enough lender consents by Wednesday's deadline, sources told Prospect News.

One fund manager said that the amendment was probably not approved because the company publicly said that they were going to pay down debt and that repayment would be at par, so lenders decided they'd rather wait for the paydown than participate in the tender.

Under the amendment proposal, the company would have had around 270 days to repurchase about $200 million of its term loan B, a second fund manager remarked.

Citigroup is the agent on the deal.

Hanesbrands may not have lost out

According to the second fund manager, the retraction of the request may not have been so bad for Hanesbrands since trading levels on the term loan B are higher now than they were a short while ago, meaning that the buyback wouldn't have been at that much of a discount.

"Price of the loan moved up since the request was announced last week. Maybe not worth it anymore. Paper was probably mid-to-low 80s before request. Now it's bid in the high 80s and offered around 90. They'd probably have to pay some kind of premium to entice people to sell it to the company - a point or two.

"Term loan B didn't really move on the news that the amendment was pulled. Earnings was last week. Maybe that helped account for the move up as well. During earnings talked about paying down debt with cash flow. So, other factors working here," the fund manger added.

Hanesbrands is a Winston-Salem, N.C.-based consumer goods company.

Las Vegas Sands weakens

Switching to secondary happenings, Las Vegas Sands' strip of term loan debt headed lower, giving up some of Wednesday's gains, as investors had time to digest the additional financing news, according to a trader.

The strip of delayed-draw term loan and term loan B debt was quoted at 59¾ bid, 61¼ offered, down from Wednesday's levels of 61½ bid, 64 offered. On Monday, the debt was quoted at 58 bid, 60½ offered.

"Shouldn't have run up yesterday as much as it did," the trader said. "Before, you were going to get a covenant breach, a coupon bump and fees. Now, you get nothing."

Covenant breach avoided with capital infusion

As was previously reported, Las Vegas Sands avoided potential non-compliance with its credit facility leverage ratio for the quarter ended Dec. 31 by raising about $2 billion in net proceeds from a public offering of common stock and offerings of series A preferred stock and warrants.

The common stock offering is estimated to raise about $959 million in net proceeds, the sale of series A preferred stock and warrants is estimated to raise around $503 million in net proceeds and the sale of series A preferred stock and warrants to the family of Sheldon G. Adelson, the company's chairman and chief executive officer and principal stockholder, is estimated to raise around $524.5 million in net proceeds.

Proceeds from the offerings will be used for general corporate purposes, which may include repayment of debt under the company's revolver and the financing of construction and development projects in Las Vegas, Macao, Singapore and Pennsylvania.

The transactions are expected to close on or about Nov. 14.

Las Vegas Sands is a Las Vegas-based developer of multi-use integrated resorts.

NewPage slides

Also in the secondary, NewPage's term loan was quoted lower in very light trading following the release of disappointing quarterly results, according to a trader.

The term loan was quoted at 78 bid, 82 offered, down from 80 bid, 85 offered, the trader said.

For the third quarter, the company's net loss was $61 million, compared to net income of $16 million in the third quarter of 2007.

Net sales were $1.126 billion in the quarter, compared to $545 million last year, with the increase primarily a result of the acquisition of Stora Enso North America.

EBITDA was $151 million for the quarter, compared to $79 million in the 2007 comparable period.

And, the company closed the quarter with $419 million of liquidity, consisting of $87 million of cash and $332 million of additional borrowing availability under its revolving credit facility.

NewPage is a Miamisburg, Ohio-based coated paper manufacturer.

Cash pressured by sellers

The cash market in general on Thursday felt weaker by anywhere from a half a point to a point and a half primarily because more sellers than buyers were stepping in, according to a trader.

However, two names that showed a bit more of a loss were HCA Inc. and Michaels Stores Inc.

HCA, a Nashville, Tenn.-based health care services provider, saw its term loan quoted at 79½ bid, 81½ offered, down 2¾ points on the day, the trader said.

Michaels Stores, an Irving, Texas, specialty retailer of arts, crafts, framing, floral, wall decor and seasonal merchandise for the hobbyist and do-it-yourself home decorator, saw its term loan quoted at 57 bid, 60 offered, down 3½ points.

"Retail name that hung in pretty well the past few days. People noticing this thing hasn't moved down with the rest of the market and thinking it will so selling out now," the trader remarked about Michaels Stores' term loan.

The trader added that Michaels Stores may have also retreated on Thursday on some profit taking by investors.

Ashland closes

Ashland Inc. completed its acquisition of Hercules Inc. for $18.60 per share in cash and 0.093 of a share of Ashland common stock, according to a news release. The total transaction value is about $3.3 billion, including $0.7 billion of net assumed debt.

To help fund the transaction, Ashland got a new $1.75 billion senior secured credit facility (Ba1/BBB-), consisting of a $500 million five-year revolver, a $500 million five-year term loan A and a $750 million seven-year term loan B.

Although the deal has closed, syndication was not completed as a result of the volatility in the loan market.

The facility had been launched to investors back in September with price talk of Libor plus 325 bps on the revolver and the term loan A, and price talk of Libor plus 350 bps with a 3% Libor floor and an original issue discount of 98 on the term loan B.

Bank of America and Scotia Capital acted as the joint lead arrangers and joint bookrunners on the credit facility, with Bank of America the administrative agent.

Ashland is a Covington, Ky., chemical company. Hercules is a Wilmington, Del., manufacturer and marketer of specialty chemicals.

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