First Data up on new alliance; Targa better with deal; Swift dips after rally; QVC pulls loan

By Sara Rosenberg

New York, June 29 - First Data Corp.'s term loan B debt headed higher during Monday's trading session after the company announced that it is joining forces with Bank of America to form a payments services company.

Also in the secondary, Targa Resources Inc.'s strip of institutional bank debt was stronger on news of a bond offering, Swift Transportation Co. Inc.'s term loan B fell off a little after a big run-up at the end of last week and Nuveen Investments Inc.'s term loan was better as the company held a financial update conference call.

In other news, QVC Inc. terminated its plans to obtain a new term loan B as syndication was progressing slowly even after changes were made last week to the transaction to give investors higher pricing.

First Data rises

First Data's term loan B debt gained some ground in the secondary market following news that it has entered into an alliance with Bank of America, according to traders.

The term loan B debt was quoted by one trader at 74¾ bid, 75¾ offered, up from 73¼ bid, 74¼ offered. A second trader only saw levels on the term loan B-1 and he placed that tranche at 74¼ bid, 75¼ offered, up from 72¾ bid on Friday.

On Monday morning, First Data revealed that it and Bank of America are forming a new company named Banc of America Merchant Services LLC, which will provide clients with a suite of innovative payments services, including credit, debit and prepaid cards to merchant loyalty, check and eCommerce payments.

Bank of America will contribute about 240,000 merchant relationships and First Data will contribute about 140,000 merchant relationships to the new company.

The company will be about 46.5% owned by Bank of America and 48.5% by First Data, with the remaining stake held by Rockmount Investments LLC, an investment vehicle controlled by a third-party investor.

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

Targa gains on offering

Targa Resources' strip of letter-of-credit facility and term loan B debt moved higher on Monday after the company's publicly traded master limited partnership said that it was selling some notes, according to a trader.

The $250 million senior unsecured notes, being sold by Targa Resources Partners LP, will be used to repay senior secured credit facility borrowings and for general partnership purposes.

Following the announcement, the company's strip of bank debt was quoted at 96 bid, 98 offered, up from 95¼ bid, 97¼ offered on Friday, the trader said.

Targa is a Houston-based provider of midstream natural gas and natural gas liquid services.

Swift Transportation softens

Swift Transportation's term loan B came in a little in trading as there was probably some profit taking following Friday's rally, according to traders.

The term loan B was quoted by one trader at 74 bid, 75½ offered, down from 74½ bid, 76½ offered, and by a second trader at 74 3/8 bid, 75 3/8 offered, down from 74¾ bid, 76¼ offered.

On Friday, the term loan B moved up from 69¼ bid, 70¼ offered, after talk surfaced that the company borrowed all the remaining funds under its revolving credit facility.

One trader explained that revolver draw created speculation that the company was borrowing the money now because it might be facing covenant issues, which would likely result in an amendment attempt and higher loan pricing, and as a result, the term loan B moved up on the news.

Another possible reason for the Friday rally was a rumor that the company could potentially be doing a bond deal that would be used to pay down bank debt.

Swift Transportation is a Phoenix-based truckload carrier.

Nuveen up with call

Nuveen Investment's term loan gained on Monday in connection with the company's conference call that was held to update investors on its financial performance, according to a trader.

The term loan was quoted at 78½ bid, 80 offered, up from 76½ bid, 77½ offered, the trader said.

As part of its presentation, Nuveen said that its business fundamentals continue to strengthen with improved market, strong second-quarter inflows and continued strong relative investment performance.

The company is estimating assets under management of $128 billion in the second quarter, up 11% from the first quarter due to strengthening equity markets, continued strong municipal markets and $1.5 billion of net inflows.

In addition, the company is projection LTM second quarter EBITDA to be $380 million to $385 million.

And, the company implemented further cost reduction actions implemented in the second quarter with annualized savings of $40 million to $50 million.

Nuveen is a Chicago-based seller of investment products.

LCDX higher with stocks

In more trading news, the LCDX 12 index was stronger as stocks were better on the day, according to a trader.

The index was quoted at 86.80 bid, 87.10 offered, up from 85.85 bid, 86.15 offered, the trader said.

As for equities, Nasdaq closed up 5.84 points, or 0.32%, Dow Jones Industrial Average closed up 90.99 points, or 1.08%, S&P 500 closed up 8.33 points, or 0.91%, and NYSE closed up 55.54 points, or 0.94%.

QVC removes B loan from market

Over in the primary market, QVC's proposed $500 million term loan B (Ba2/BBB) "officially died" and there is "no word of [a] new or revised deal coming," since the deal was struggling to catch investor interest, a market source told Prospect News on Monday.

As of last Thursday, it was heard that only about half of the loan was committed, and the commitment deadline was set for Friday at 3 p.m. ET.

The term loan B was being talked at Libor plus 400 basis points, after flexing up from Libor plus 350 bps, with a 2% Libor floor and an original issue discount of 98, which was narrowed down from initial guidance of 98 to 981/2.

Also during the syndication attempt, Most-Favored-Nation language was added to the tranche.

Proceeds from the term loan B were going to be used for general corporate purposes.

Bank of America and JPMorgan were acting as the lead banks on the loan.

QVC is a West Chester, Pa.-based multimedia retailer.

Rite Aid closes

Rite Aid Corp. closed on its new $1 billion revolving credit facility due 2012, according to a news release.

The revolver is part of a refinancing that also included getting a new $525 million term loan due 2015 and the issuance of $410 million of 9.75% first-lien senior secured notes due 2016.

The term loan is priced at Libor plus 650 basis points with a 3% Libor floor, it was sold at an original issue discount of 96, and it carries call protection of 105 in year one, 103 in year two and 101 in year three. During syndication of this loan, the deal was upsized from $400 million as a result of strong demand and the original issue discount firmed at the midpoint of guidance of 95½ to 961/2.

Proceeds from the revolver, the term loan and the notes were used to repay/refinance the company's 2010 debt maturities, including its $145 million term loan tranche 1 and $1.75 billion senior secured revolver.

Completion of the revolver took place this past Friday.

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

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