TNS floats timing and talk; Masonite softens with filing plans; GM dips on sales

By Sara Rosenberg

New York, March 3 - TNS Inc. came out with expected pricing on its proposed incremental term loan on Tuesday as the acquisition financing deal is getting ready to launch to investors a little later this month.

Over in the secondary market, Masonite International Inc.'s term loan headed lower as the company announced its intention to file for bankruptcy assuming that its debt holders sign off on a pre-packaged plan of reorganization.

Also, General Motors Corp.'s term loan was down on Tuesday on monthly sales numbers, while Ford Motor Co.'s term loan was unchanged to lower on the bid side, depending on who was asked, as its results weren't as bad.

TNS timing, guidance emerge

TNS revealed anticipated timing and pricing on its proposed $250 million term loan that will be marketed to both banks and institutional investors, according to a market source.

A bank meeting for the deal is targeted to take place on March 17 in New York, the source said.

And, price talk on the loan is Libor plus 600 basis points with a 3.5% Libor floor and an original issue discount of 90, the source continued.

SunTrust is the bookrunner and lead agent on the new loan.

Expected pro forma leverage is around 2½ times and it is anticipated that the company's three-B rating will be maintained.

Proceeds will be used to help fund the acquisition of VeriSign Inc.'s communication services group for $230 million in cash.

TNS existing loan to be amended

As was previously reported by Prospect News, in connection with the new deal, TNS' existing $178.5 million term loan B will be amended to accommodate the new debt and to revise pricing.

However, on Tuesday, details of the amendment came out, including that the spread on the existing term loan B will go to Libor plus 600 bps to match pricing on the new term loan, and the 3.5% Libor floor will be added to the existing deal as well, the source remarked.

Currently, the existing term loan B is priced at Libor plus 200 bps.

It is anticipated that some of the company's existing lenders will show some interest in the new term loan, which, in turn, will help the syndication process.

The financing and the acquisition are expected to close within the next 60 days, subject to customary regulatory approvals.

TNS is a Reston, Va.-based provider of business-critical, cost-effective data communications services for transaction-oriented applications.

Masonite loses ground

Switching to trading news, Masonite's term loan weakened after the company revealed details on a pre-packaged reorganization that it hopes to achieve through a bankruptcy filing, according to a trader.

The company said on Tuesday that it is planning to file for Chapter 11 if lenders and bondholders approve a pre-negotiated restructuring plan that would reduce total funded debt by almost $2 billion and create a better capital structure for the company.

The term loan was quoted at 37 bid, 39 offered, down from levels that were previously seen quoted in the area of 42 bid, 46 offered, the trader said.

"Maybe not thrilled with the package. [Also] might be first time [levels are] real in the market so it's hard to tell. Seems to be trading on the news," the trader added.

Masonite plan gets OK from committees

Members of a steering committee representing Masonite's senior secured lenders and representatives of an ad-hoc committee representing holders of its senior subordinated notes due 2015 agreed upon Masonite's proposed restructuring plan.

"We are very pleased to have reached an agreement in principle on a plan that will allow us to reduce our debt substantially and put Masonite in a stronger, financially healthier position for the future," said Fred Lynch, president and chief executive officer, in a news release.

"With an appropriately sized capital structure and greater financial flexibility, along with our excellent market position, strong brand and industry-leading products, we believe we will be well-positioned to take advantage of market opportunities and grow our business over the long term," Lynch added in the release.

Masonite lenders to get debt and equity

Under the terms of the agreement in principle, Masonite's existing senior secured obligations would be converted on a pro rata basis, subject to the election of each existing holder, into debt and/or equity.

More specifically, senior secured lenders will be offered a new up to $200 million senior secured term loan, a new up to $100 million second-lien PIK loan and/or 97.5% of the common equity of the company.

The common equity is subject to dilution for warrants issued to the senior subordinated noteholders and management equity and/or options.

Senior subordinated notes would be converted to 2.5% of the common equity plus warrants for 17.5% of the common stock of the company, subject to dilution for management equity and/or options.

Masonite is a Mississauga, Ont.-based manufacturer of residential and commercial doors.

General Motors slides

General Motors' term loan was lower during the trading session on disappointing sales numbers, while Ford's term loan basically held in since its sales, although not great, were still better than General Motors, according to traders.

General Motors, a Detroit-based automotive company, saw its term loan quoted by one trader at 34 bid, 38 offered, down a point on the day, and by a second trader at 36 bid, 38 offered, down a half a point on the day.

Meanwhile, Ford, a Dearborn, Mich.-based automotive company, saw its term loan quoted by one trader at 29 bid, 33 offered, unchanged from previous levels, and by a second trader at 29¼ bid, 31¼ offered, down only on the bid side from 30¼ bid, 31¼ offered.

GM sales drop by more than 50%

For the month of February, General Motors' total sales for February were 127,296, down 52.9% from 270,423 last year.

General Motors' total car sales were 53,813, down 50% from 107,592, and total truck sales were 73,483, down 54.9% from 162,831.

By comparison, Ford's total sales were 99,400, down 48.4% form 192,799 February 2007.

Ford, Lincoln and Mercury car sales were 34,678, down 40.8% from 58,585, and total truck sales were 61,366, down 51.6% from 126,709.

LCDX inches lower

Also on the secondary front, LCDX 10 was a little bit weaker on Tuesday as equities were minimally down, according to a trader.

The index was quoted at 71.85 bid, 72.15 offered, versus levels of around 72.50 bid, 72.60 offered on Monday, the trader said.

As for stocks, Nasdaq closed down 1.84 points, or 0.14%, NYSE closed down 26.26 points, or 0.60%, S&P 500 closed down 4.49 points, or 0.64%, and Dow Jones Industrial Average closed down 37.27 points, or 0.55%.

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