Venetian Macau dips on refi worries; Texas American, Nations Petroleum deals die; Landry's mulls timing

By Sara Rosenberg

New York, Sept. 18 - Venetian Macau's term loan debt headed lower during Thursday's market hours as news emerged that the company's refinancing plan has hit a snag, and LCDX 10 bounced up with equities on rumors of a government bailout for banks.

In other news, the proposed credit facilities for Texas American Resources Co. and Nations Petroleum LLC have both been pulled from the primary market, and Landry's Restaurants Inc. is floating possible new timing on the launch of its twice postponed credit facility, although an actual date is still very fluid.

Venetian Macau's term loan debt dropped by a few points in trading following news that the company's new Asian-marketed credit facility will not get done as quickly as expected, meaning that the existing term loan debt won't be taken out as early as was previously hoped, according to a trader.

The term loan debt was quoted at 91½ bid, 93½ offered, down from Wednesday's levels of 93½ bid, 95 offered, the trader said.

The trader explained that Venetian Macau, a subsidiary of Las Vegas Sands Corp., a Las Vegas-based hotel, gaming, resort and exhibition/convention company, was targeting to raise about $5 billion in new bank debt from Asian banks, but word is that the financing is having some problems.

"There's a worldwide liquidity problem that will affect anybody who's trying to refinance or get money. Not saying it won't be done, just may not be done as fast as people thought," the trader said.

"Think people overreacted a little to the news. Think you'll see it bounce back over the next few weeks.

"It's not a matter of if the deal is going to get done. It's a matter of when. Yield is pretty juicy on [the existing term loan] if the refinancing gets done. It's Libor plus 225, buy it at 90, getting retired at par and probably repaid within a year," the trader remarked.

"Once the markets get more confident, [the refinancing] will get done," the trader continued.

"Rumors of RTC (Resolution Trust Corp.) today. That should help boost liquidity within next month or two if they actually do it and everything goes through. Fed buys up distressed stuff so banks don't have to keep writing them down. They did this in the 80s during the savings and loan crisis. It basically creates Federal repos. Should free up some liquidity. Lehman and Bear weren't insolvent, just nobody would lend them money anymore. This would solve that problem," the trader added.

LCDX rises with stocks on RTC chatter

The abovementioned rumors that the government is considering instituting a Resolution Trust Corp. type solution for the current credit crisis pushed LCDX 10 and the stock market higher on Thursday, according to a trader.

The index was quoted at 94.40 bid, 94.60 offered, up from Wednesday's levels of 93.40 bid, 93.65 offered, the trader said.

Nasdaq closed up 100.25 points, or 4.78%, Dow Jones Industrial Average closed up 410.03 points, or 3.86%, S&P 500 closed up 50.12 points, or 4.33%, and NYSE closed up 334.77 points, or 4.50%.

As for the loan cash market in general, that didn't finish at its lows, but it still ended the day down by about a point or two on average, the trader added.

Texas American deal canceled

Switching to primary happenings, Texas American Resources' proposed $300 million credit facility has been taken out of the market and the deal will not close, according to a market source, who declined to comment on why the transaction fell through.

Most recently, the facility consisted of a $125 million three-year reserve-based revolver talked at Libor plus 175 basis points to Libor plus 250 bps based on use with a 50 bps commitment fee, and a $175 million second-lien term loan talked at Libor plus 1,000 bps with a 3.5% Libor floor, an original issue discount of 97 and call protection of non-callable for one year, then at 103, 102, 101.

During the attempted syndication, pricing on the term loan was flexed up from initial talk of Libor plus 850 bps, the Libor floor was changed from 3.25%, and call protection was sweetened from just 103, 102, 101.

The revolver was being marketed to a small club of banks and the initial borrowing base was going to be $75 million.

Credit Suisse and BNP Paribas were acting as the lead banks on the second-lien term loan, with Credit Suisse the left lead, and BNP Paribas was acting as the lead bank on the revolver.

Proceeds from the facility were going to be used by the Austin, Texas, energy company to refinance existing debt and for general corporate purposes.

Nations Petroleum also gone

Nations Petroleum's proposed term loan is another deal that has gone dead, according to a market source.

The deal was launched as a $325 million term loan talked at Libor plus 750 bps with a 3.25% Libor floor and an original issue discount of 98.

However, during the syndication attempt, rumor was that the loan was downsized to $220 million, pricing was flexed up to Libor plus 1,250 bps and the original issue discount was increased to 97.

Credit Suisse was acting as the lead bank on the deal.

Proceeds were going to be used to fund the development of the heavy-oil Lost Hills field in the San Joaquin Valley Basin of Kern County, Calif.

Landry's reveals targeted timeframe

Landry's Restaurants is working on nailing down timing for the launch of its proposed $300 million senior secured credit facility, and talk is that the current target is to hold a bank meeting during the week of Sept. 29, according to a market source.

However, the source warned that timing on the launch is still very much in motion as a result of hurricane Ike and the volatility in the financial markets.

Originally, Landry's had scheduled a bank meeting for Sept. 4 to launch the facility, but that ended up being delayed until Sept. 18. And then, earlier this week, the Sept. 18 bank meeting was pushed off primarily because of the hurricane.

On Wednesday, the company disclosed that 14 of its Houston area restaurants remain closed as a result of the hurricane and will re-open as soon as power is restored to each of the units, and all of its Kemah and Galveston restaurants are closed.

Once power and water are restored in Galveston, the company anticipates that the majority of its Galveston restaurants will re-open, and that some of the restaurants at the Kemah Boardwalk may re-open within the next 45 to 60 days, with additional restaurants opening monthly thereafter.

The company said that it expects the majority of its property losses and cash flow to be covered by property and business interruption insurance.

Landry's long awaited credit facility consists of a $50 million five-year revolver and a $250 million five-year term loan A.

According to filings with the Securities and Exchange Commission, pricing on the revolver and the term loan A is expected to be Libor plus 400 bps, with a 3.25% Libor floor, and the revolver has a 50 bps commitment fee.

There is no official talk on the deal as of yet.

Wells Fargo Foothill and Jefferies are the co-lead arrangers, co-bookrunners and co-syndication agents on the deal, with Well Fargo the administrative agent.

Proceeds will be used to help fund the buyout of the company by Fertitta Holdings Inc for $21 per share in cash. The total value of the deal is about $1.3 billion, including about $885 million of debt.

Fertitta is a newly formed entity wholly owned by the company's chairman, president, chief executive officer and original founder, Tilman J. Fertitta, who beneficially owns about 39% of the company's outstanding common shares.

Landry's is a Houston-based restaurant, hospitality and entertainment company.

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