Georgia-Pacific dips on amendment chatter; Ford, GM weaken; JDA Software fades away

By Sara Rosenberg

New York, Dec. 4 - Georgia-Pacific Corp.'s term loan traded down during Thursday's market hours as there was some speculation that the company's recently launched amendment may not pass.

Also in trading, Ford Motor Co. and General Motors Corp. slipped lower, possibly on some profit taking, possibly because the rest of the market felt softer and possibly on concerns over the companies' bailout proposals.

In other news, JDA Software Group Inc. terminated its plans to acquire i2 Technologies Inc., making the credit facility that JDA was having such a hard time syndicating unnecessary.

Georgia-Pacific slips

Georgia-Pacific's term loan B lost some ground during the trading session as there was some chatter floating around that the company's amendment proposal may not pass since lenders are not being offered an increase in pricing, according to a trader.

The term loan B was quoted at 78 bid, 79½ offered, down from Wednesday's levels of 79½ bid, 81½ offered. On Tuesday, the loan was quoted at 77½ bid, 79½ offered.

"Speculation that amendment might not get approved. People might want a coupon bump, not just the amendment fee," the trader remarked.

Georgia-Pacific looking to loosen leverage ratio

On Wednesday, Georgia-Pacific approached lenders with an amendment that would revise the total leverage covenant so that it would remain at 5.25 times, the current requirement, through 2010, whereas without the amendment, the covenant would move to 4.5 times in 2009 and 4.25 times in 2010.

In return, the company would repay $400 million of its term loan B and $100 million of its term loan A, and lenders would get a 100 bps amendment fee.

Citigroup is leading the amendment process.

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

Ford, GM trade down

Ford's term loan and General Motors' term loans softened in trading after gaining more than 10 points over the past of couple of sessions, according to traders.

Ford saw its term loan quoted at 45 bid, 46 offered, down from 47 bid, 48 offered, the trader said.

And, General Motors saw its term loan also quoted at 45 bid, 46 offered, down from 47 bid, 48 offered, the trader continued.

"Don't think people have a lot of faith that the bailout will happen quickly. I think some people think GM will end up having to file," one trader said in explanation of the fall.

A second trader said that there might have been some profit taking going on since the bank debt has rallied so strongly recently. He also said that the cash market in general was down, so the autos may have been pressured by that as well.

In regards to the bailout, the second trader remarked, "Lot of political posturing. Going to be one of two things - prepackaged bankruptcy or we'll just have to give them money."

Ford, GM approach Congress again

On Thursday, Ford and General Motors once again met with Congress to plead their cases for government aid so that they could hopefully return to profitability.

As was reported earlier this week, Ford is requesting access to an up to $9 billion bridge loan in case the current economic crisis worsens or there is a bankruptcy of a major competitor

And, General Motors is requesting access to $18 billion in funds, comprised of a $12 billion bridge loan - of which it wants $4 billion this month - and a $6 billion revolving line of credit.

General Motors is a Detroit-based automotive manufacturer. Ford is a Dearborn, Mich.-based automaker.

Cash, LCDX drop

The cash market in general was lower on Thursday with things feeling softer by anywhere from one to two points, depending on the name, according to a trader.

In addition, LCDX 10 suffered as well, with levels dropping to 75 bid, 75.30 offered, from 76.20 bid, 76.70 offered on Wednesday, the trader continued.

"Everything is down, Equities are down. Overall lack of confidence," the trader added.

Nasdaq closed down 46.82 points, or 3.14%, Dow Jones Industrial Average closed down 215.45 points, or 2.51%, S&P 500 closed down 25.52 points, or 2.93%, and NYSE closed down 173.29 points, or 3.21%

JDA deal dies

Switching to new deal happenings, JDA Software canceled its acquisition agreement with i2 Technologies, eliminating the need for JDA to continue to try and successfully close on its proposed $450 million five-year senior secured credit facility.

The credit facility consisted of a $250 million first-out term loan talked at Libor plus 600 basis points, a $175 million first-loss term loan talked at Libor plus 950 bps and a $25 million revolver.

All tranches were going to have a 3.25% Libor floor, the two terms loans were both being offered at an original issue discount of 95, the first-out loan had 101 call protection, and the first-loss term loan was non-callable for one year, then at 103, 102, 101.

Originally, the facility was launched as a $25 million revolver talked at Libor plus 575 bps with a 3.25% Libor floor, and a $425 million term loan talked at Libor plus 575 bps with a 3.25% Libor floor, an original issue discount of 97 and 101 call protection against voluntary prepayments for one year - but revisions were made in late October in the hopes of attracting investors.

Credit Suisse and Wachovia were acting as the joint lead arrangers and joint bookrunners on the deal, with Credit Suisse the agent and Wachovia the syndication agent. Wells Fargo Foothill was part of the syndicate as well.

JDA had asked i2 to adjourn meeting

The deal had already looked like it was falling apart as, last month, JDA had requested that i2 postpone its special meeting of stockholders to allow the two companies to negotiate a reduced purchase price from the original roughly $346 million cash price, since as a result of the adverse effect of the continuing credit crisis, problems with the financing arose.

In the letter to i2 requesting the shareholder meeting adjournment, JDA said that its lenders had recently notified its that they revised the terms on which they intended to provide financing for the acquisition and that those revised terms, in the company's judgment, created unacceptable risks and costs to the combined company.

i2, however, denied the request and at the meeting, stockholders ended up approving the transaction.

i2 had said that it held the meeting as scheduled in order to fulfill its commitments under the merger agreement and to preserve its rights under the merger agreement, including its right to pursue a termination fee from JDA under certain specified circumstances.

In Thursday's cancellation announcement, i2 remarked that it expects to receive the non-refundable termination fee of $20 million from JDA within three business days.

JDA planned to seek more time for financing

Upon making the request for the adjournment of the i2 meeting, JDA had said that if the meeting went on as planned, it was going to exercise its discretionary right under the acquisition agreement to take up to 60 days in order to continue to attempt to arrange acceptable debt financing.

The acquisition was supposed to close in the fourth quarter, subject to completion of financing, i2 stockholder approval, the amendment of i2's convertible note indenture, expiration or termination of the applicable Hart-Scott-Rodino waiting periods and regulatory and other customary conditions. Successful syndication of the debt was not a condition of the financing.

In September, the companies announced that they had received early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

JDA is a Scottsdale, Ariz.-based provider of supply and demand chain requirement software products. i2 Technologies is a Dallas-based provider of supply chain management products.

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