Cablevision extended loan begins trading; Leap up on repayment; Harrah's slides; Visteon up

By Sara Rosenberg

New York, May 28 - Cablevision Systems Corp.'s extended term loan B was approved to start trading during Thursday's market hours, at which time it was seen quoted a little higher than the company's non-extended term loan B debt.

Also in the secondary, Leap Wireless International Inc.'s term loan headed higher as the debt is expected to be repaid in full, Harrah's Operating Co. Inc.'s term loan B-2 softened after its run-up during the previous day and Visteon Corp.'s term loan was a little better with the company's bankruptcy filing.

Over in the primary market, Rite Aid Corp. is talking its deal at an upsized amount and has gone out with guidance on the Libor floor and original issue discount, but final terms have not yet been set.

Cablevision starts trading

Cablevision's extended term loan B began trading during the session, with levels on the debt seen at 93 bid, 94 offered, according to a trader.

Meanwhile, the Bethpage, N.Y.-based telecommunications, media and entertainment company's non-extended term loan B was quoted at 92¾ bid, 93¾ offered, unchanged on the day, the trader said.

Last week, Cablevision successfully amended its credit facility to, among other things, allow for the postponement of the maturity date of as much of its term loan B as possible to March 29, 2016 from March 29, 2013.

With the amendment, the company extended $1.2 billion of the $3.395 billion term loan B.

Lenders could not get increased pricing on the extended term loan B since that would have required 100% approval under the credit agreement. Instead, those lenders are getting an extension fee of an extra 150 basis points each year.

Actual pricing on the extended term loan B, however, remained in line with pricing on the non-extended piece at Libor plus 175 bps.

Leap gains on paydown

Leap Wireless' term loan was better by a few points on Thursday on the back of news that the company intends to repay all amounts outstanding under its senior secured credit facility, according to a trader.

The term loan was quoted at par bid, 101 offered, up about two points on the day, the trader said, explaining that the debt is atop par because of call protection.

On Wednesday evening, Leap revealed plans to sell about $1.1 billion of senior secured notes due 2016 through its Cricket Communications Inc. subsidiary.

The funds from the notes offering will be used to fully repay the company's bank debt and a prepayment premium of about $17.5 million, and any remaining proceeds will be used for general corporate purposes.

As of March 31, there was $875.3 million outstanding under the term loan and the $200 million revolver was undrawn other than roughly $0.5 million of letters of credit.

With the loan repayment, the San Diego-based provider of digital wireless services plans to terminate its revolver.

Harrah's retreats

Harrah's term loan B-2 took a step back on Thursday as there seemed to be some profit taking on the heels of the debt's recent run-up. Also, some investors may have been selling the loan so that they could buy the company's bonds that just started trading, according to traders.

The term loan B-2 was quoted by one trader at 76¾ bid, 77¾ offered, down from 79 bid, 80¼ offered, and by a second trader at 77 bid, 78 offered, down from 78½ bid, 79½ offered.

On Wednesday, the term loan B-2 had moved up from 76½ bid, 77½ offered after the company announced plans to sell $1 billion in senior secured notes and use proceeds towards the repayment of some term loan and revolver borrowings, and for general corporate purposes.

In the end, Harrah's increased the bond offering to $1.375 billion. The 11¼% notes priced at 96.225 to yield 12%.

Completion of the bond offering is subject to the company successfully amending its senior secured credit facility.

Harrah's seeks amendment

As was previously reported, Harrah's is looking to amend its credit facility to allow for the sale of secured notes or loans as long as an agreed amount of the net cash proceeds from any notes or loan issuance are used to prepay existing term loans or revolving loans at par.

The amendment would exclude from the maintenance covenant notes secured with a first-priority lien on the assets that secure the senior secured credit facility, which collectively result in up to $2 billion of gross proceeds and up to $250 million of consolidated debt of subsidiaries that are not wholly owned subsidiaries.

In addition, Harrah's is hoping to get permission from its bank group to repurchase loans at a discount.

And, the amendment would allow the company to agree with individual lenders to extend the maturity of their term loans or revolving commitments in return for increased interest rates or otherwise modified terms.

Harrah's is a Las Vegas-based provider of branded casino entertainment.

Visteon up with bankruptcy

Visteon's term loan moved to higher ground in the secondary market following news that the company voluntarily filed petitions for relief under Chapter 11, according to traders.

The term loan was quoted by one trader at 37 bid, 39 offered, up from 36½ bid, 38½ offered on Wednesday, and by a second trader at 36¾ bid, 38½ offered, up from 36 bid, 37½ offered..

"Visteon is taking this step to maximize the long-term value of the company," said Donald J. Stebbins, chairman and chief executive officer, in a news release.

"During the reorganization period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment. The results of these actions, combined with our innovative products and excellent product quality, will allow Visteon to emerge a financially sound and well-positioned company," Stebbins added.

Visteon gets DIP support

Visteon plans to get a debtor-in-possession financing facility to help fund its operations during its time in bankruptcy.

The company said that Ford Motor Co. has executed a commitment letter to support the debtor-in-possession financing.

Other funds for the company's operations will come from U.S. cash balance and cash flows from operations.

Visteon is a Van Buren Township, Mich.-based automotive supplier that designs, engineers and manufactures climate, interior, electronic and lighting products for vehicle manufacturers, and also provides a range of products and services to aftermarket customers.

LCDX 12 inches higher

The LCDX 12 index was a touch stronger on Thursday as stocks ended the day better, according to a trader.

The index was quoted at 83.40 bid, 83.70 offered, up from 83.10 bid, 83.40 offered, the trader said.

As for equities, Nasdaq closed up 20.71 points, or 1.2%, Dow Jones Industrial Average closed up 103.78 points, or 1.25%, S&P 500 closed up 13.77 points, or 1.54%, and NYSE closed up 93.50 points, or 1.61%.

Rite Aid may upsize

Switching to new deal happenings, Rite Aid talked to accounts about increasing the size of its term loan due 2015 to $500 million from $400 million, according to a market source.

In addition, guidance of a 3% Libor floor and an original issue discount in the range of 95½ to 96½ was released, the source said.

As was previously reported, the spread on the loan is talked at Libor plus 650 basis points.

Books on the deal, which just launched with a conference call this past Tuesday, closed on Thursday.

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 a recent 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 is a Camp Hill, Pa.-based drugstore chain.

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