Delta steady to up with numbers; BWIC comes to market; Neustar, Sequa, PolyOne set talk

By Sara Rosenberg

New York, Oct. 25 - Delta Air Lines' new term loan B was unchanged to better on Tuesday, depending on which trader was asked, after the release of quarterly numbers, and a new loan Bid Wanted In Competition (BWIC) surfaced.

Over in the primary market, Neustar Inc., Sequa Corp. and PolyOne Corp. came out with price talk on their new deals as all three of these transactions were presented to lenders during the session.

Delta holds firm

Delta Air Lines' new term loan B was flat to higher on Tuesday as the company released quarterly results that showed year-over-year improvements in earnings and revenue, according to traders.

The Atlanta-based airline company's B loan was seen by one trader at 96½ bid, 97½ offered in the morning and by the afternoon at 96¼ bid, 97¼ offered. He had the debt at 95½ bid, 97 offered on Monday.

Meanwhile, a second trader was quoting it at 96¼ bid, 97¼ offered, unchanged on the day.

For the September quarter, Delta reported net income of $549 million, or $0.65 per diluted share, compared to net income of $363 million, or $0.43 per diluted share, in the previous year, and operating revenue for the quarter was $9.816 billion, up 10% from $8.95 billion last year.

Also, as of Sept. 30, the company had $5.1 billion of unrestricted liquidity, including $3.3 billion in cash and short-term investments and $1.8 billion of undrawn revolvers, and adjusted net debt was $14 billion. The company said that it remains on track to achieve its $10 billion adjusted net debt target in 2013.

BWIC bids due soon

A $100 million loan BWIC emerged, with market participants told that they have until Wednesday to place their bids, according to a market source.

The portfolio is a mix of "on-the-run and off-the-run" names, the source said, adding that the largest tranche is in the $5 million area.

Some names that are being auctioned include Affinion Group Inc., Yankee Candle Co. Inc., Realogy Corp., US Airways Group Inc. and Hexion Specialty Chemicals Inc.

Credit Suisse Securities (USA) LLC is heard to be leading the process, the source added.

Allison loan softens

Also in the secondary, Allison Transmission Inc.'s term loan was seen by one trader as fairly active on Tuesday, and bid side levels were softer, although there was no credit specific news causing the movement.

The term loan was quoted at 96¼ bid, 97¼ offered, versus prior levels of 96¾ bid, 97¼ offered, the trader remarked.

Allison is an Indianapolis-based automatic transmission company.

Neustar releases guidance

Moving to the primary, Neustar held a bank meeting on Tuesday morning to kick off syndication on its proposed $700 million senior secured credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $600 million seven-year term loan B is being talked at Libor plus 425 basis points to 450 bps with a 1.25% Libor floor and an original issue discount of 98, the source said.

And, the $100 million five-year revolver is being talked at Libor plus 400 bps to 425 bps with no Libor floor and an original issue discount of 99, the source continued.

Morgan Stanley Senior Funding Inc., the lead bank on the credit facility, is seeking commitments from lenders by Nov. 3.

Neustar funding acquisition

Proceeds from Neustar's credit facility will be used to help fund the purchase of Targus Information Corp. for roughly $650 million in cash, including repayment of outstanding debt.

For the combined company, total debt is 1.9 times and net debt is 0.9 times.

Closing on the transaction is expected in the fourth quarter, subject to Hart-Scott-Rodino approval.

Neustar is a Sterling, Va.-based provider of solutions and directory services that enable communication across networks, applications and enterprises. Targus is a Vienna, Va.-based provider of real-time, on-demand information and analytics services.

Sequa talk emerges

Also launching Tuesday was Sequa's $200 million incremental senior secured term loan (B1/B-), at which time lenders were told that the debt is talked at Libor plus 500 bps to 525 bps with a 1.5% Libor floor and an original issue discount of 98½ to 99 and includes 101 soft call protection for one year, according to a market source.

Barclays Capital Inc. and Credit Suisse Securities (USA) LLC are leading the deal and are seeking commitments by Nov. 1.

Proceeds, along with cash on hand, will be used to fund the acquisition of Roll Coater Inc. for $245 million.

Sequa is a New York-based diversified aerospace and industrial company. Roll Coater is an Indianapolis-based coil coating company.

PolyOne launches

Yet another company to come out with guidance was PolyOne, launching its $300 million six-year term loan B (Ba1/BB-) in the afternoon at talk of Libor plus 425 bps with a 1.25% Libor floor, an original issue discount of 98 to 99 and 101 soft call protection for one year, according to market sources.

As for the company's $300 million five-year ABL revolver, that is being talked at Libor plus 200 bps, sources said.

Bank of America Merrill Lynch and Wells Fargo Securities LLC are leading the $600 million deal, and are asking for commitment by Nov. 1 with the goal being to close on Nov. 17.

Proceeds, along with cash on hand, will be used to fund the acquisition of ColorMatrix Group Inc. for $486 million - the closing of which is subject to regulatory approvals.

PolyOne is an Avon Lake, Ohio-based provider of specialized polymer materials and services. ColorMatrix is a Berea, Ohio-based specialty provider of liquid colorants, additives and fluoropolymers.

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