Avis rises on financing; LCDX up with stocks; Rite Aid launches new loan, old loan steady

By Sara Rosenberg

New York, May 26 - Avis Budget Group Inc.'s term loan B headed higher during Tuesday's trading session following news that the company has received new lease financing commitments, and the LCDX 12 index was better.

In other news, Rite Aid Corp. launched during the afternoon a new term loan to a wide group of investors, which included new and existing guys. And, in reaction to the new deal, the company's "old" term loan was seen as unchanged to slightly lower in the secondary, depending on who was asked.

Avis trades up

Avis Budget Group's term loan B posted some gains during market hours on news that the company has obtained commitments for about $325 million of operating lease financing, according to traders.

Following the announcement, one trader had Avis' term loan B quoted at 71 bid, 76 offered, up about two points on the day.

Meanwhile, a second trader had the loan quoted at 73 bid, 74½ offered, up from 72½ bid, 73½ offered on Friday.

Avis adding vehicles

In a press release on Tuesday, Avis explained that the new financing commitments are for vehicles that it plans to add to its U.S. car rental fleet over the next four months.

"This transaction represents another important step in the evolution and expansion of our fleet financing to reflect the changes that have occurred in the credit markets," said David B. Wyshner, executive vice president and chief financial officer, in the release.

"With this financing, we are not only obtaining additional liquidity at competitive rates, we are also executing against a funding strategy that anticipates a rebound in car rental demand in 2010," Wyshner added.

Avis is a Parsippany, N.J.-based provider of vehicle rental services.

LCDX strengthens

Also in trading, the LCDX 12 index moved higher as stocks were better on the day, according to a trader.

The index was quoted at 82.85 bid, 83.25 offered, up from 82.45 bid, 82.65 offered, the trader said.

Nasdaq closed up 58.42 points, or 3.45%, Dow Jones Industrial Average closed up 196.17 points, or 2.37%, S&P 500 closed up 23.33 points, or 2.63%, and NYSE closed up 146.96 points, or 2.54%.

Rite Aid launches

Switching to the new deal front, Rite Aid launched to lenders via a conference call at 2 p.m. ET on Tuesday a proposed $400 million term loan due 2015, and the loan was presented with price talk of Libor plus 650 basis points, according to a market source.

The source said that the loan is expected to have a Libor floor and an original issue discount, but specifics of those features are still to be determined.

Citigroup, Bank of America, Wells Fargo and GE Capital are the joint lead arrangers on the deal, with Citi the left lead.

Proceeds will be used to refinance the company's $145 million term loan tranche 1 due 2010, and repay and cancel a portion of the commitments outstanding under its revolver.

Rite Aid amending

In connection with the term loan, Rite Aid is also looking to amend its existing credit facility to allow for the new debt and the completion of a refinancing plan, of which the term loan is a part, according to an 8-K filed with the Securities and Exchange Commission.

The company is looking to refinance its September 2010 debt maturities, including its accounts receivable securitization programs.

Funds for the refinancing are targeted to come from a combination of a new revolver, new term loans, the issuance of high-yield notes, which may be secured on a first- or second-priority basis or unsecured, or the entry into a new securitization program.

Rite Aid loan unchanged to softer

After Rite Aid revealed its new term loan plans and refinancing hopes, the company's "old" term loan was steady to a little bit weaker in the secondary market, depending on the trader.

One trader told Prospect News that he had the old term loan quoted at 79 bid, 81 offered, flat from Friday's levels.

However, a second trader had the term loan quoted at 78½ bid, 79½ offered, down from 79 bid, 80 offered late last week.

Rite Aid is a Camp Hill, Pa.-based drugstore chain.

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