Ntelos breaks atop discount price; Dean Foods, DaVita move with earnings; Oshkosh rises

By Sara Rosenberg

New York, Aug. 5 - Ntelos Holdings Corp.'s credit facility hit the secondary market on Wednesday, with the term loan quoted above the original issue discount price at which it was sold during syndication.

Also in trading, Dean Foods Co.'s term loan was weaker after numbers came out, DaVita Inc.'s term loan B gained some ground on the back of earnings, and Oshkosh Corp.'s term loan was stronger on paydown news and continued positive sentiment about government contracts.

Ntelos frees to trade

Ntelos' credit facility broke for trading during market hours, with the term loan seen trading higher than its original issue discount price, according to traders.

The $635 million six-year first-lien term loan was quoted at par bid, 101 offered on the break, it then moved up to 101 bid, 102 offered and then it settled in at par¾ bid, 101 offered by the end of the day, one trader remarked.

A second trader, meanwhile, said that the first "hit" he saw was par ¼ bid, 101 offered and by late day he was seeing the term loan quoted at par ½ bid, 101½ offered.

During syndication, the term loan was issued to investors at a price of 99. This original issue discount was tightened from initial talk of 98½ as the deal was well received by investors.

Pricing on the term loan is Libor plus 375 basis points with a 2% Libor floor.

Ntelos refinancing debt

Ntelos is using proceeds from the term loan to help refinance and extend the maturity of its outstanding $603 million first-lien term loan due August 2011 and for general corporate purposes.

As part of the refinancing, the company is also getting a $35 million revolver.

JPMorgan is the lead bank on the $670 million credit facility (Ba3/BB-).

Ntelos is a Waynesboro, Va.-based integrated communications provider.

Dean Foods softens

Dean Foods term loan B headed lower on Wednesday as the company released earnings that showed better net income but a reduction in sales, according to a trader.

The term loan B was quoted at 95¾ bid, 96¼ offered, down from 96 bid, 96¾ offered during the previous session.

For the second quarter, the company reported net income of $64.1 million, or $0.38 per diluted share, compared to net income of $48.9 million, or $0.31 per diluted share, in the second quarter of 2008. Adjusted diluted earnings per share were $0.43, an increase of 30% from $0.33 per adjusted diluted share last year.

Net sales for the second quarter totaled $2.7 billion, a decrease of 14% from $3.1 billion in the prior year.

"The second quarter marks another solid step forward. Again, we posted strong financial results across the business, made continued progress against our strategic initiatives, and further deleveraged the balance sheet," said Gregg Engles, chairman and chief executive officer, in a news release.

"We believe we are firmly on track to deliver very strong full-year results," Engles added.

For the third quarter, the company is expecting adjusted diluted earnings per share of at least $0.30 and the full-year forecast was increased to at least $1.60 per adjusted diluted share.

Dean Foods reduces debt

In the second quarter, Dean Foods' equity offering and strong cash flow combined to drive total net debt outstanding lower by $509.7 million.

Total debt at June 30, net of $53.1 million in cash on hand, was about $3.8 billion, and net cash provided by continuing operations for the first half of 2009 totaled $349.8 million, compared to $315.3 million for the first half of 2008.

In addition, the company's funded debt to EBITDA ratio declined to 3.85 times as of the end of the quarter.

"Free cash flow and debt paydown were again especially strong in the quarter," said Jack Callahan, chief financial officer, in the release. "Our strong cash performance over the last year, combined with our May equity offering that raised about $445 million, has allowed us to reduce our total debt outstanding by nearly $900 million in the past year alone."

Dean Foods is a Dallas-based food and beverage company.

DaVita trades up

DaVita's term loan B was stronger in trading as the company came out with quarterly results late in the day Tuesday that showed an improvement in net income and revenues, according to traders.

The term loan B was quoted at 96½ bid, 97½ offered, up from 96 bid, 97 offered on Tuesday, the trader said. The trader went on to remark that the loan was around 96¼ bid, 97¼ offered at the open on Wednesday and then it inched up by a quarter of a point before around midday.

However, a second trader did not see the same type of rise in term loan B levels. The second trader had the loan quoted at 96¾ bid, 97¼ offered, up only on the bid side from 96½ bid, 97¼ offered.

For the quarter ended June 30, DaVita's net income was $105.8 million, or $1.02 per share, compared to $95 million, or $0.90 per share, last year.

And, revenues for the quarter were $1.5 billion, up from $1.4 billion in the comparable period in the prior year.

DaVita generates cash

DaVita also revealed that in the second quarter, its operating cash flow was $212 million and free cash flow was $174 million.

Furthermore, the company narrowed its operating income guidance for 2009 to be in the range of $900 million to $930 million.

Operating cash flow guidance for the full year remained unchanged at a range of $550 million to $600 million.

DaVita is an El Segundo, Calif.-based provider of dialysis services.

Oshkosh moves higher

Oshkosh's term loan posted some gains during the trading session as the company announced plans to repay some of the debt and investors are still pleased with recent government contracts, according to a trader.

The term loan was quoted at 99 5/8 bid, par ¼ offered, up from 98 3/8 bid, 99¾ offered, the trader said.

Late Wednesday, Oshkosh said that it will repay a portion of its term loan borrowings using proceeds from the sale of 13 million shares of common stock.

Also, last Friday, the company announced that it received an additional $1.06 billion delivery order for 1,700 more MRAP All Terrain Vehicles to be delivered to the U.S. Armed Forces by February 2010.

This order follows an initial $1.05 billion delivery order the company received for 2,244 M-ATVs on June 30.

"Went from $1 billion contract to $2 billion contract, and people believe by September it could be $3 billion," the trader added.

Oshkosh is an Oshkosh, Wis.-based designer, manufacturer and marketer of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies.

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