Ntelos rolls out $670 million deal; CIT revolver resumes upward march; LCDX gains a point

By Paul A. Harris

St. Louis, July 20 - The LCDX 12 index closed more than a point higher on Monday, ending the session at 89.9 bid, 90.2 offered, versus Friday levels of 88.7 bid, 89 offered, according to a trader.

Ntelos Holdings Corp. rolled out a new $670 million bank deal, including a $635 million term loan which one buy-side source characterized as the first decent-sized loan in some time and one where the borrower is actually seeking to refinance its existing term loan.

Meanwhile the CIT Group revolver due 2010 traded sharply higher again on Monday, on the back of a broad-based rally in credit and stocks, a trader said.

Ntelos $670 million starts Wednesday

Ntelos Holdings will launch its new $670 million credit facility at a Wednesday bank meeting.

JP Morgan is leading the deal.

The facility is expected to be comprised of a $635 million six-year first-lien term loan and a $35 million revolver.

Price guidance for the term loan is Libor plus 375 basis points, with a 2% Libor floor. The original issue discount remains to be determined.

Proceeds will be used to refinance and extend the maturity of its outstanding $603 million first lien term loan due August 2011 and for general corporate purposes.

Ntelos is an integrated communications provider with headquarters in Waynesboro, Va.

Proactive refinancing

A buy-side source complimented Ntelos for being proactive in bringing its deal to refinance approximately $600 million of term loan debt that matures in 2011.

The deal is apt to play to a strong audience, the source added, noting that CLOs will be interested in the double-B quality paper, and that an expected original issue discount ought to help attract mutual fund managers as well.

Characterizing the deal as the first decent-sized loan in some time, and noting that the borrower is actually seeking to refinance its existing term loan, the source commented that it may signal the reopening of the term loan market.

In recent months this kind of refinancing has been more likely to be done in the high-yield bond market, the source added.

Ntelos' announcement of the new bank deal appeared not to dramatically impact the existing term loan due 2011.

It was quoted at 98¼ bid, 99¼ offered on Monday, according to a trader who added that there had been no apparent changes in those levels over the past 10 days.

CIT revolver marches higher

CIT's unsecured revolver due 2010 finished the day wrapped around 70, according to a trader who reported it at 69 bid, 72 offered.

Not long before, another trader said that the CIT revolver was at 65 bid, 68 offered, up from 61 bid, 63 offered on Friday, on news that private lenders might be willing to loan money to the ailing commercial lender.

Noting that secondary market volume, in general, was light on Monday, a trader said that there have been marks put out there on CIT loan paper, but actual trading activity was pretty light.

Broad-based rally

There was a broad-based rally in credit and in stocks, on Monday, a buy-side source said.

In part, the rally is attributable to CIT's being able to survive without having to restructure its debt.

"Also you have Goldman Sachs becoming extremely bullish, especially in stocks, which is helping credit," the buy-sider said.

The CDX High-Yield 12 index was up on Monday by a point, and the LCDX was up 7/8 to 1 point, the buy-sider remarked.

Both the high-yield and investment grade bond markets now have active new issue calendars, the source said, and added that SBA Telecommunications rolled out a $500 million junk offer on Monday, while Bemis Co., Inc. priced $800 million of high-grade bonds.

"But it's not really about individual names," the buy-sider said.

"It's about the good tone of credit.

"The first wave of credits that have reported [earnings] have all been better than expected, which is another sign that fundamentals are at least temporarily okay, even if the economy has not yet turned the corner."

Fresh Del Monte closes

In follow up news, Fresh Del Monte Produce Inc. said it completed its new $500 million senior secured revolving credit facility.

The loan matures on Jan. 17, 2013 and currently has an interest rate of Libor plus 300 bps. The margin will vary with the leverage ratio. There is an unused fee of 62.5 bps.

Included in the new facility is a swing line facility and a letter of credit facility with a $100 million sublimit.

Proceeds were used to refinance Fresh Del Monte's existing credit facility and term loan.

The new revolver has $333.4 million outstanding, made up of $304.3 million in borrowings and $29.1 million of letters of credit. The unused $166.6 million is available for working capital needs, general corporate purposes and other uses.

Rabobank was lead arranger.

"The offering was significantly oversubscribed, and is indicative of our strong credit quality," commented Mohammad Abu-Ghazaleh, Fresh Del Monte's chairman and chief executive officer, in a news release. "This refinancing demonstrates our ability to raise funds at attractive rates in a very tight loan market. We believe the new credit facility provides a more than ample cushion for our liquidity needs based on the company's current financial projections."

Fresh Del Monte is a Coral Gables, Fla., producer of fresh fruit and vegetables.

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