Univision trades up; Revlon steady on preliminary earnings; Allen-Vanguard sets spreads

By Sara Rosenberg

New York, April 11 - Univision Communications Inc.'s strip of institutional bank debt continued to climb its way higher on Friday after a meltdown earlier in the week following news of bank debt draws, and Revlon Inc.'s term loan held firm on Friday after the company released preliminary financial results for the first quarter 2008.

In other news, Allen-Vanguard Corp. firmed pricing on its credit facility and Newport Television LLC launched its already funded, but not yet syndicated, deal.

Univision's strip of institutional bank debt's upward momentum continued into the Friday session so that the paper is now basically back to where it was trading prior to when the company's drawdown news hit the market, according to traders.

The institutional debt was quoted by one trader at 78 bid, 78½ offered, and by a second trader at 78 1/8 bid, 78 5/8 offered - up from 77 bid, 78 offered on Thursday.

This past Monday the bank debt was quoted at 78 bid, 79 offered, and then on Tuesday it traded as low as 74 when people first heard that the company drew down nearly all of its revolving credit facility debt. By the end of the day Tuesday, the paper had rebounded to the 76 bid, 77 offered context and it has continued to inch its way higher every day since then.

Specifically, Univision drew down $700 million under its $750 million revolver, of which up to $250 million can be used to pay down its $500 million second-lien asset sale bridge loan that is due on March 29, 2009.

After giving effect to outstanding letters of credit, the company has about $18 million remaining available under the revolver.

According to the company, there is no immediate need for additional liquidity, but, in light of current financial market conditions, the decision was made to make the revolver draw so as to get greater financial flexibility.

Univision also initiated a draw under its $450 million delayed-draw term loan for the remaining $250 million of funds available under the tranche, with the proceeds earmarked for the prepayment of senior notes that are due in October.

Market participants initially found the drawdown unsettling as it brought up concerns over the credit in general being that it operates in the media sector and is highly levered.

Univision is a Los Angeles-based Spanish-language media company.

Revlon holds firm

Revlon's term loan was steady during market hours after the company announced preliminary earnings for the first quarter, according to a trader.

The term loan was quoted at 93 bid, 94 offered, unchanged from Thursday's levels, the trader said.

For the quarter, the company expects net sales of about $320 million, compared to $328.6 million in the first quarter of 2007.

Operating income is expected to be about $30 million, compared to $3 million in the same period last year.

Net loss is anticipated to be about $5 million, compared to a net loss of $35.2 million reported in the first quarter of 2007.

And, adjusted EBITDA for the quarter is expected at about $55 million, compared to $32.3 million last year.

The company said that the significant improvement in preliminary operating income, net loss and adjusted EBITDA was primarily driven by continuing cost improvements, and the non-recurrence of brand support related to the launch of Revlon Colorist hair color in the first quarter of last year.

"Our strong preliminary financial results for the first quarter of 2008 continue to build upon our performance in 2007, which was our best year in many years. These results continue to validate our strategy, and we remain committed to our focus on increasing the value of our company by building the Revlon brand and generating profitable sales growth and positive free cash flow," said David Kennedy, president and chief executive officer, in a news release.

In addition, on Friday, the company announced plans for a reverse split of its class A and class B common stock at a 1-for-10 split ratio.

"We believe that a reverse stock split is in the best interest of our stockholders because we expect it will allow our stock to be more attractive to a broader range of institutional and other investors, would reduce certain of our costs, such as listing fees, and would be intended to satisfy our compliance with the NYSE's price criteria for continued listing," Kennedy added in the release.

Revlon is a New York-based cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirants/deodorants and personal care products company.

Allen-Vanguard firms pricing

Allen-Vanguard set pricing on both tranches under its C$250 million three-year secured credit facility at Libor plus 350 basis points, pretty much in line with initial guidance at launch that was described as the Libor plus mid-300 bps range, according to a market source.

Tranching on the deal is comprised of a C$200 million term loan and a C$50 million revolver, with both tranches available in U.S. dollars.

RBC Capital Markets is the lead bank on the deal that is being targeted at commercial banks.

The term loan is repayable in quarterly principal payments of C$10 million, plus additional quarterly payments ranging from 50% to 75% of excess cash flow, with any remaining principal repayable upon the maturity date.

Proceeds will be used to repay the company's existing higher-cost senior debt facilities, expected to be about C$180 million, plus a prepayment penalty equal to 5% of the outstanding balance.

Leverage is less than 2.0 times.

Commitments are due on April 18 and the deal is expected to close by April 25.

Allen-Vanguard is an Ottawa, Can.-based provider of proprietary counter-terrorist equipment systems for defeating and mitigating conventional and unconventional terrorist devices of all kinds.

Newport Television launches

Newport Television launched its senior secured credit facility with a conference call on Friday morning at price talk that was in line with previously rumored guidance, according to a market source.

The company's $515 million term loan was officially presented to lenders with talk of Libor plus 500 bps, with a 3% Libor floor and an original issue discount of 95, the source said.

Market buzz since late March has been that some investors have already been given an early look at the deal.

Newport Television's $590 million credit facility also includes a $75 million revolver.

Wachovia, Goldman Sachs and UBS are the lead banks on the deal.

Proceeds were used to help finance Providence Equity Partners Inc.'s recently completed acquisition of Clear Channel Communications Inc.'s television group for $1.012 billion. Providence's total equity commitment was about $260 million.

The sale included 56 television stations, including 18 digital multicast stations, located in 24 markets across the United States. Also included in the sale were the stations' associated web sites, the Television Operations Center and Inergize Digital Media, which manages the television group's online and wireless initiatives.

The acquisition was first announced in 2007 and before finally closing in mid-March, Providence tried to get out of the deal but Clear Channel took the equity firm to court, and then Wachovia tried to back out of the debt commitment.

However, over the course of the negotiations, the purchase price for Newport Television was lowered from the originally agreed upon price of $1.2 billion.

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