Hexion rises on amend, extend; Dex One strengthens with amendment; Chrysler trades up

By Sara Rosenberg

New York, March 1 - Hexion Specialty Chemicals Inc.'s non-extended loan gained ground in trading on Thursday as its parent company, Momentive Specialty Chemicals Inc., disclosed plans for an amendment and extension transaction.

Also in the secondary, Dex One Corp.'s bank debt was higher on news of an amendment that would permit sub-par repurchases and the release of fourth-quarter earnings, and Chrysler Group LLC's term loan B was up with sales results.

Over in the primary, iStar Financial Inc. and Sonneborn LLC disclosed pricing guidance on their term loans as the transactions were presented to lenders in the afternoon, and Bombardier Recreational Products released talk on its extension proposal.

In addition, Ennis-Flint and Protection One Inc. revealed plans to bring new credit facilities to market, and Avis Budget Car Rental LLC told investors that it will be launching a term loan B and started circulating price talk on the debt.

Hexion heads higher

Hexion's non-extended term loan C1/C2 debt rose to 99½ bid, par ½ offered from 98¾ bid, 99¾ offered and its extended C1/C2 debt moved to 98¼ bid, 99¼ offered from 98 bid, 99 offered, after word of an amendment and extension hit the market, according to a trader.

Furthermore, the extended term loan at the Momentive Performance Materials Holdings LLC level was 97 bid, 98 offered, up from 96¾ bid, 97¾ offered, while its non-extended loan was unchanged at 98 bid, 99 offered, the trader added.

In an 8-K filed with the Securities and Exchange Commission, Momentive Specialty Chemicals said that it is looking to extend its term loans due May 5, 2013 to March 4, 2015, its term loan due May 5, 2015 to March 3, 2017 and its third incremental revolver due Feb. 3, 2013 to Dec. 3, 2014.

With the extension offer, the company will launch an issuance of new senior secured debt that will be used to repay loan borrowings.

Momentive Specialty Chemicals, parent company of Hexion and Momentive Performance, is a Columbus, Ohio-based thermoset resins company.

Dex One gains

Dex One's term loans were stronger in trading on Thursday as well, with the driver being the launch of an amendment request that would allow for the repurchase of loans below par within the next two years, according to traders.

One trader had the Dex West term loan quoted at 59½ bid, 61½ offered, up from 57½ bid, 59½ offered, the Dex East term loan quoted at 50½ bid, 52½ offered, up from 49 bid, 51 offered, and the R.H. Donnelley Inc. term loan quoted at 39½ bid, 41½ offered, up from 38½ bid, 40½ offered.

And, a second trader had Dex West at 59 bid, 62 offered, up from 56 bid, 60 offered, and Dex East at 50 bid, 52 offered, up from 49 bid, 51 offered.

Consents are due on March 8 and closing is expected on March 9. The company intends to begin repurchasing the debt shortly thereafter.

Lenders are being offered a 7.5 basis point consent fee.

Dex One earnings

Also on Thursday, Dex One revealed fourth-quarter numbers that included net income of $5.5 million, or $0.11 per share, compared to a net loss of $20.2 million, or $0.41 per share in the prior year.

Net revenue for the quarter was $352 million, versus $357.6 million in the fourth quarter of 2010.

And, quarterly adjusted EBITDA was $150.4 million, compared to $165 million in the previous year.

The company also disclosed full-year 2012 guidance of net revenue in the range of $1.225 billion to $1.3 billion, adjusted EBITDA in the range of $500 million to $575 million and free cash flow in the range of $300 million to $375 million.

Dex One is a Cary, N.C.-based marketing solutions provider.

Chrysler up with numbers

In more secondary happenings, Chrysler's term loan B was better as the company announced positive U.S. sales results for the month of February, according to traders.

The term loan B was quoted by one trader at 101 bid, 101½ offered, up from par 5/8 bid, 101 1/8 offered, and by a second trader at par 7/8 bid, 101 3/8 offered, up from par ½ bid, 101¼ offered.

For February, the company reported total sale of 133,521, compared to 95, 102 in the comparable period last year.

Total car sales for the month were 40,024, up from 17,745, and total truck sales were 93,497, up from 77,357.

Chrysler is an Auburn Hills, Mich.-based automotive company.

iStar guidance emerges

Switching to the primary, iStar Financial held a bank meeting on Thursday to kick off syndication on its $900 million of new senior secured term loans, and with the launch, price talk was announced.

The $500 million first-out four-year term loan A-1 is talked at Libor plus 400 bps with a 1.25% Libor floor, an original issue discount of 98½ to 99, and call protection of 101 in year one and par ½ in year two, a source said.

And, the $400 million second-out five-year term loan A-2 is talked at Libor plus 575 bps with a 1.25% Libor floor and an original issue discount of 98½ to 99, the source remarked. The tranche is non-callable for three years, then at 104 in year four.

Lead banks Barclays Capital Inc., Bank of America Merrill Lynch and J.P. Morgan Securities LLC are seeking commitments by March 14.

iStar Financial, a New York-based finance and investment company focused on the commercial real estate industry, will use the new loans to refinance 2012 unsecured debt maturities.

Sonneborn sets talk

Also launching during the session was Sonneborn, and lenders were told that the $240 million six-year term loan B is being talked in the Libor plus 550 bps area with a 1.5% Libor floor and an original issue discount of 98, according to a market source.

The company's $270 million credit facility also includes a $30 million five-year revolver.

Commitments are due on March 15, and closing is expected on March 30, the source added.

Macquarie Capital and BMO Capital Markets Corp. are leading the deal that will be used to fund the buyout of the company by One Equity Partners from Sun Capital Partners Inc.

Sonneborn, a Parsippany, N.J.-based manufacturer and supplier of high-purity specialty hydrocarbons, will have total and senior leverage of 3.8 times.

Bombardier extended pricing

Meanwhile, Bombardier Recreational Products launched its amendment and extension proposal, under which it is looking to extend a portion of its term loan (B1/B+) by three years to June 2016 at pricing of Libor plus 425 bps, according to a market source.

By comparison, non-extended pricing is Libor plus 250 bps.

BMO Capital Markets Corp., RBC Capital Markets LLC and UBS Securities LLC are the lead banks on the deal.

Bombardier is a Valcourt, Quebec-based designer manufacturer, distributor and marketer of motorized recreational vehicles and powersports engines.

Ennis-Flint readies launch

Ennis-Flint, a provider of pavement markings with corporate offices in Dallas and Thomasville, N.C., emerged on this week's calendar, setting a bank meeting for 10 a.m. ET on Friday to launch a $405 million credit facility, according to a market source.

The Credit Suisse Securities (USA) LLC-led deal consists of a $50 million five-year revolver, a $240 million six-year first-lien term B and a $115 million 61/2-year second-lien term loan, the source said.

Although price talk is still to be determined, it is known that the term loan B has 101 soft call protection for one year, and the second-lien loan has call protection of 103 in year one, 102 in year two and 101 in year three, the source continued.

Proceeds will be used to refinance existing debt in connection with the merger of Ennis Traffic Safety Solutions and Flint Trading Inc., which is expected to close in the second quarter. Both companies are majority owned by Brazos Private Equity Partners LLC.

Protection One plans deal

Continuing on the new issue front, Protection One will be holding a bank meeting at 10:30 a.m. ET on Monday to launch a proposed $545 million credit facility that is being led by J.P. Morgan Securities LLC and Barclays Capital Inc., according to sources.

The facility is comprised of a $25 million five-year revolver and a $520 million seven-year term loan, sources said.

Proceeds will be used to refinance existing credit facility borrowings and fund a distribution to shareholders.

Protection One is a Romeoville, Ill.-based alarm and security services provider.

Avis coming soon

Avis Budget Car Rental also came out with a new deal, scheduling a conference call for 11 a.m. ET on Friday to launch a proposed $375 million seven-year term loan B, according to market sources.

Additionally, price talk on the term loan B surfaced at Libor plus 325 bps with a 1% Libor floor and an original issue discount of 99, sources said.

J.P. Morgan Securities LLC is the lead bank on the deal that will be used to refinance existing debt.

Avis is a Parsippany, N.J.-based vehicle rental operator.

RailAmerica closes

RailAmerica Inc. closed on its $585 million seven-year senior secured term loan (B1/BB+) that is priced at Libor plus 300 basis points with a 1% Libor floor and was sold at an original issue discount of 991/2, according to a news release. There is 101 soft call protection for one year.

During syndication, pricing firmed at the low end of initial talk of Libor plus 300 bps to 325 bps talk with a discount of 99 to 991/2.

Morgan Stanley & Co. LLC acted as the lead arranger on the deal and a joint bookrunner with Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and BMO Capital Markets Corp.

Proceeds were used to fund a tender offer for $444 million of the company's 9¼% senior secured notes.

In addition to the new term loan, the company is increasing its revolving credit facility to $100 million from $75 million.

RailAmerica is a Jacksonville, Fla.-based owner and operator of short-line and regional freight railroads.

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