Vought dips on lender call; Regal Cinemas up with paydown; Neiman slides as revenues revealed

By Sara Rosenberg

New York, July 9 -Vought Aircraft Industries Inc.'s term loan B was a little lower on Thursday following the release of additional information on the company's amendment proposal, which was launched to investors earlier in the session.

In other secondary happenings, Regal Cinemas Corp.'s term loan B headed higher on news that the company would be repaying a portion of its bank debt, Neiman Marcus Inc.'s term loan B softened with June revenue results and the LCDX 12 index was better.

Vought term B slides

Vought Aircraft's term loan B weakened during market hours as the company held a lender call to discuss all of the details of its proposed credit facility amendment, according to a market source.

The term loan B was quoted at 96½ bid, 97½ offered, down from around 96¾ bid, 97¾ offered on Wednesday, the source said.

However, the company's incremental term loan was unchanged on the news, remaining at 97½ bid, the source continued.

As was previously reported, the amendment is being done so that the company can sell the business and operations at its South Carolina facility to Boeing for about $580 million in cash.

The Vought facility that is being sold performs fabrication and assembly of structures and systems installation of 787 aft fuselage sections, which are made primarily of composite materials.

In order to be able to complete the transaction, Vought is asking lenders to waive the current $30 million annual cap on asset sales.

The transaction is anticipated to close in the third quarter following satisfaction of customary conditions.

Vought lenders may have expected more

The market source explained that Vought's term loan B might have slipped by a quarter of a point because lenders could have been hoping for a larger paydown from the asset sale proceeds or maybe they were anticipating a coupon boost - something that is not being offered.

As currently proposed, $305 million of the asset sale proceeds would be used to repay term loan B and incremental term loan debt on a pro rata basis. This $305 million is considered the true asset sale proceeds, while the remaining $275 million is considered payment for work and costs already incurred, the source remarked.

Of the $275 million left over from the sale, $135 million would be used to pay down revolver borrowings, $100 million would be used to fund the company's pension plan and $40 million would be used for cash on the balance sheet and/or to pay expenses related to the amendment and asset sale.

As a result of the paydowns, secured leverage would go to 1.5 times from 3.0 times, which is "immensely positive from a credit perspective," the source added.

Vought downsizing revolver

Vought Aircraft's amendment, if approved, would also reduce the actual size of the revolver to $100 million from $150 million.

In addition, the amendment would give the company the ability to extend the revolver, term loan B and incremental term loan maturities at a later date. Currently, the revolver expires in December 2010 and the term loans expire in December 2011.

Furthermore, the amendment seeks to change the administrative agent on the facility to Barclays from Lehman Brothers. Barclays is the one leading the amendment process.

Consents are due from lenders on July 17 and in return for approving the amendment, lenders would get paid a 5 basis point fee.

Vought Aircraft is a Dallas-based aerostructures company.

Regal Cinemas rises

Regal Cinemas' term loan B strengthened on Thursday after the company revealed plans to repay some of its existing credit facility borrowings, according to a trader.

The term loan B was quoted at 98¾ bid, 99¾ offered, up from 97½ bid, 98½ offered, the trader said.

Funds for the loan repayment will come from a senior notes offering that was announced in the morning.

When first disclosed, the notes were expected to carry a size of $300 million, but they were later upsized to $400 million. The 8 5/8% notes priced at 97.561 to yield 9%.

Regal Cinemas is a subsidiary of Regal Entertainment Group, a Knoxville, Tenn.-based motion picture exhibitor.

Neiman off with revenues

Neiman Marcus' term loan B posted some losses during the trading session as the company came out with preliminary revenue results for the month of June, according to traders.

One trader had the term loan B quoted at 74¾ bid, 75¾ offered, down from 75 bid, 76 offered, and a second trader had the paper quoted at 74 3/8 bid, 75 3/8 offered, down from 75 bid, 76 offered.

For the month of June, total revenues were $323 million, down 19.4% from $401 million last year, and comparable revenues were $317 million, down 20.8% from $401 million last year.

In the five-week June period, comparable revenues in the specialty retail stores segment, which includes Neiman Marcus Stores and Bergdorf Goodman, decreased 23%.

The company said that it experienced weakness across all geographies and merchandise categories in the specialty retail stores segment.

Lastly, comparable revenues at Neiman Marcus Direct in the five-week June period decreased 9.7%.

Neiman Marcus is a Dallas-based high-end specialty retailer.

LCDX trades up

Also in trading, the LCDX 12 index moved higher on Thursday and stocks were stronger as well, according to a trader.

The index was quoted at 86 bid, 86.30 offered, up from 85.40 bid, 85.80 offered, the trader said.

As for equities, Nasdaq closed up 5.38 points, or 0.31%, Dow Jones Industrial Average closed up 4.76 points, or 0.06%, S&P 500 closed up 3.12 points, or 0.35%, and NYSE closed up 42.80 points, or 0.76%.

Casella Waste closes

Casella Waste Systems Inc. closed on its $307.5 million senior secured credit facility (Ba2/BB) on Thursday, according to an 8-K filed with the Securities and Exchange Commission.

The facility consists of a $177.5 million revolver priced at Libor plus 450 bps with a 2% Libor floor, and a $130 million term loan priced at Libor plus 500 bps with a 2% Libor floor and an original issue discount of 941/2.

There is a $42.5 million accordion feature under the credit facility.

During syndication, the term loan was upsized from $100 million when a bond offering was downsized to $180 million from $205 million.

Bank of America and Comerica acted as the lead banks on the deal, with Bank of America the left lead.

Proceeds from the new facility, along with proceeds from second-lien notes offering, were used to repay the company's existing credit facility.

Casella is a Rutland, Vt.-based solid waste, recycling and resource management services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.