UAL, US Airways rally; Cash, LCDX trade up; Merisant pulls deal; Global BPO floats pricing

By Sara Rosenberg

New York, April 2 - Airline names, such as UAL Corp. and US Airways Group Inc., soared on Wednesday as more buyers seemed to be stepping in for the paper, and the cash market in general and LCDX 9 were both stronger.

In other news, Merisant Co. pulled its credit facility from market as a result of adverse conditions and Global BPO Services Corp. came out with expected pricing on its proposed credit facility.

UAL and US Airways were active and stronger during market hours as some investors view the loans as a good deal and have been stepping in to buy them, according to a trader.

UAL, a Chicago-based air transportation services provider, saw its term loan B quoted at 83¼ bid, 84¼ offered, up from 79¾ bid, 81¾ offered, the trader said.

And, US Airways, a Tempe, Ariz.-based airline company, saw its term loan quoted at 71 bid, 73 offered, up from 69½ bid, 71½ offered, the trader continued.

"These names have traded down more than most of the market and have not rallied like the rest of the market," the trader remarked. "Think some guys have been sniffing around and think there's some value here so they're stepping in and buying."

Cash, LCDX better

The cash market and LCDX 9 were both higher on Wednesday, despite stocks having a mixed session, according to traders.

Cash in general was stronger by about a quarter to a half a point, with good activity in the morning and a slow down in the afternoon, traders said.

Meanwhile, LCDX 9 was quoted at 94.45 bid, 94.65 offered, up from 93.90 bid, 94 offered on Tuesday, one trader continued.

"Guys probably just taking off shorts prior to the roll [into LCDX 10] on the 8th," the trader added regarding the index's performance.

Equities were a mixed bag on Wednesday, with Nasdaq down 1.35 points, or 0.06%, Dow Jones Industrial Average down 48.53 points, or 0.38%, S&P 500 down 2.65 points, or 0.19%, and NYSE up 15.97 points, or 0.18%.

BWIC sells

In other secondary news, bids were due on Wednesday for an about $130 million BWIC, according to traders.

UBS led the auction, traders added.

Delphi strengthens

Delphi Corp.'s $2 billion seven-year first-lien term loan (Ba2) inched a little higher on Wednesday in sympathy with the rest of the market, according to a trader.

The term loan was quoted at 94 1/8 bid, 95 1/8 offered, up from 94 bid, 95 offered on Tuesday, the trader said.

Since breaking for trading on Monday, the debt has moved up quite nicely. On the break, it was quoted at 93 bid, 94 offered and then by the end of that day it was 93½ bid, 94.

So, from the break until the close Wednesday, the debt had already gained 1 1/8 points in trading.

The first-lien term loan is priced at Libor plus 575 bps, with a 3.25% Libor floor for life and call protection of 102 in year one and 101 in year two. The paper was sold to investors at an original issue discount of 92.

The company currently expects to be able to emerge from Chapter 11 on Friday.

Delphi is a Troy, Mich.-based automotive electronics manufacturer.

Building Materials holds firm following downgrade

Building Materials Corp. of America's bank debt held steady after a downgrade from Standard & Poor's and a private lender call that was held to update earnings, according to a trader.

The term loan was quoted at 80½ bid, the trader said, unchanged from Tuesday's levels.

On Wednesday, S&P cut the company's corporate credit rating to B+ from BB- and left the ratings on CreditWatch with negative implications because of weakness in the housing environment.

"The downgrade and continued CreditWatch listing reflects the material weakening of the company's overall financial profile due to the challenging operating conditions in the company's primary markets, mainly in the residential repair and remodeling sector," said S&P credit analyst Thomas Nadramia in the rating release.

"As a result, the company's credit metrics have deteriorated to a level no longer consistent with the prior rating. In addition, given the difficult operating environment, we would expect credit metrics to remain challenged during 2008, likely constricting the cushion relative to covenant levels under its bank facility.

"If a further downgrade were to occur, it might not be limited to one notch," Nadramia added.

Merisant terminates deal

Merisant decided to squash its refinancing credit facility because market conditions "prevented the company from obtaining favorable financing terms," according to a news release.

The $245 million senior secured credit facility (B3) consisted of a $35 million revolver and a $210 million first-lien term loan.

Most recently, the revolver and the term loan were being talked at Libor plus 800 bps, of which 150 bps was PIK, with a 3.5% Libor floor.

The term loan was being offered at an original issue discount of 97 and was non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four.

During syndication, the deal had been revised considerably. At launch, price talk on the two tranches was Libor plus 650 bps and the Libor floor was 3.25%.

In addition, the term loan original issue discount was originally 98 and call protection was originally 103 in year one, 102 in year two and 101 in year three.

Credit Suisse was acting as the lead bank on the deal that was going to be used to retire the company's existing credit facility that was obtained on May 9, 2007.

Merisant is a Chicago-based marketer of low-calorie tabletop sweeteners.

Global BPO reveals expected pricing

Moving to the primary market, Global BPO released expected pricing on its proposed $108.696 million five-year senior secured credit facility in a PRER14A filed with the Securities and Exchange Commission Wednesday.

According to the filing, the company's $100 million revolver is expected to carry pricing that can range from Libor plus 200 bps to 250 bps.

And, both the $5.81 million domestic term loan and the $2.886 million foreign term are expected to carry pricing that can range from Libor plus 275 bps to 325 bps, based on the company's fixed-charge coverage ratio.

Global BPO is getting the credit facility in conjunction with its acquisition of Stream Holdings Corp., a provider of global customer relationship management and other business process outsourcing services.

PNC Capital Markets is the lead arranger, bookrunner and administrative agent on the credit facility and has committed to provide $30 million of the financing. The remaining roughly $78.7 will be syndicated on a best efforts basis to a combination of existing and new lenders to Stream.

Proceeds from the credit facility will be used to replace Stream's bank debt and senior subordinated debt, and to provide working capital.

The balance outstanding under Stream's existing credit facility and term loans, $73.1 million at Feb. 29, would be assumed as part of the new revolver and term loans.

Assuming that the credit facility is completed and a portion is used to replace Stream's outstanding bank debt and senior subordinated debt at the closing, Global BPO expects it will have about $120 million of cash available at the closing for working capital, including to pay cash to stockholders who vote against the merger and elect to convert their shares into a pro rata share of the trust fund.

The purchase price for Stream is $225.8 million, subject to certain working capital and other adjustments and subject to increase under certain circumstances if the closing of the merger does not occur by July 31.

The acquisition of Stream is estimated to close around June 30.

Global BPO is a Boston-based special purpose acquisition corporation formed in June 2007 for the purpose of acquiring a business process outsourcing firm.

Acresso closes

Thoma Bravo completed the about $200 million acquisition of Macrovision Corp.'s software business unit, which is now named Acresso Software, according to a news release.

To help fund the transaction, Acresso got a new $105 million credit facility, consisting of a $15 million revolver and a $90 million term loan.

BMO Capital Markets acted as the lead bank on the deal.

Acresso is a provider of services that help simplify the business relationship between software producers and enterprises.

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