Ford pressured as market sells off; LCDX slides; Solutia, Augusta Sportswear set talk; Delphi resets launch

By Sara Rosenberg

New York, Jan. 7 - Ford Motor Co.'s term loan took one of the more noticeable hits in an overall down secondary cash market that also affected names like Cengage Learning and Texas Competitive Electric Holdings Co. LLC (TXU), and LCDX weakened as well.

Over in the primary, Solutia Inc. and Augusta Sportswear Group came out with price talk on their credit facilities as both deals were launched with bank meetings during Monday's market hours, and Delphi Corp. pushed off its bank meeting by one day as a result of an unspecified downsizing of the deal.

Ford's term loan was noticeably weaker during the trading session, more so than a lot of other names that were lower in sympathy with the rest of the market, like Cengage and TXU. However, traders could not find a solid explanation for the extra turbulence in Ford.

According to one trader, Ford, a Dearborn, Mich.-based automaker, saw its term loan end the day at 90½ bid, 91½ offered - after trading as low as 90 bid, 91 offered - down from Friday's levels of 91¼ bid, 92¼ offered.

A second trader had Ford's term loan going out at the low of 90 bid, 91 offered and said that on Friday afternoon the paper had been quoted at 91¾ bid, 92¾ offered.

"There's no credit-related reason that I can tell. Probably more market technicals. Autos tend to take the brunt of the hit [when the market is down] and for some reason it was all focused on Ford today," the first trader said.

"Some new deals coming out. People reminded of the pipeline. People are thinking recession. Not much confidence in the market today," the first trader added.

"It was really negative today. Some stuff was down like a half a point to a point. Don't know if it's people making way for some new issue coming, selling off some old stuff. It was not clear," the second remarked.

Some other examples of loans that were given by the traders as being down on Monday included Cengage and TXU.

Cengage, a Stamford, Conn., provider of print and digital instructional and reference materials for the higher education and library reference markets, saw its term loan B go out at 94 bid, 94½ offered, down from 94½ bid, 94 7/8 offered on Friday, the traders said.

TXU, a Dallas-based energy company, saw its term loan B-2 and term loan B-3 go out at 97 5/8 bid, 98 1/8 offered, down about a quarter of a point from previous levels, the traders added.

LCDX loses ground

Also in trading, LCDX 9 was softer with the cash market, despite the fact that stocks ended the day mostly at higher levels, according to traders.

The index was quoted around 95.95 bid, 96.10 offered, down from Friday's levels of around 96.10 bid, 96.20 offered, traders said.

Earlier in the day, the index had been quoted as low as 95.80 bid, 95.90 offered, traders remarked.

As for equities, Nasdaq was down 5.19 points, or 0.21%, Dow Jones Industrial Average was up 27.31 points, or 0.21%, S&P 500 was up 4.55 points, or 0.32%, and NYSE was up 30.21 points, or 0.32%.

Solutia guidance emerges

Solutia held a "packed" bank meeting on Monday afternoon to kick off syndication on its $1.6 billion exit financing credit facility, and in connection with the launch, price talk was announced, according to a market source.

The $1.2 billion seven-year term loan B (B1/B+) was presented to lenders with talk of Libor plus 350 basis points and an original issue discount in the 96 context, the source said.

The $400 million five-year asset-based revolver (Ba1) was presented with talk of Libor plus 175 bps, the source added.

Citigroup, Goldman Sachs and Deutsche Bank are the joint lead arrangers and joint bookrunners on the financing, which will be used to pay creditors under the company's plan of reorganization and to fund ongoing operations after its emergence from Chapter 11.

As part of its exit financing package, Solutia has also received a commitment for a $400 million senior unsecured bridge facility, which will not be used if $400 million of senior notes due 2016 are issued prior to emergence, and the company has arranged for a fully backstopped rights offering that will raise $250 million in new equity capital.

Solutia is a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products.

Augusta price talk

Also launching with a bank meeting on Monday afternoon was Augusta Sportswear's $302.5 million credit facility, at which time it too released pricing guidance, according to a market source.

The $50 million revolver and the $172 million first-lien term loan were both launched with talk of Libor plus 375 bps to 400 bps, and both are being offered to investors with an original issue discount of 99, the source said.

The $80.5 million second-lien term loan was launched with talk of a fixed rate of 13%, the source added.

According to another source, rumor has it that the second-lien term loan is largely spoken for already.

GE Capital is the lead bank on the deal, which will be used to help fund Quad-C Management's buyout of the company from Linsalata Capital Partners.

Augusta is an Augusta, Ga., designer, manufacturer and distributor of athletic-oriented apparel, team uniforms, sportswear and related accessories.

Delphi rescheduled

In more primary happenings, Delphi moved the bank meeting for its exit financing credit facility to Wednesday morning from Tuesday afternoon to give itself time to complete modifications to lender presentations and other documents as a result of downsizing the deal, according to a market source.

The exit financing is being reduced because liquidity improved since the company generated cash flow during the second half of 2007 in excess of the amount projected in its revised business plan.

Previously, Delphi was expecting to launch a $5.3 billion credit facility comprised of a $1.6 billion ABL revolver at Libor plus 225 bps and a $3.7 billion first-lien term loan at Libor plus 375 bps.

The company was also expecting to get a $750 million second-lien note at 9.5% that would be raised in the capital markets and a $750 million second-lien note at 9.5% that would be issued to General Motors Corp. in connection with plan of reorganization distributions.

JPMorgan and Citigroup are the lead banks on the deal, which will be used to repay the company's debtor-in-possession financing facility, to fund other payments required upon emergence from Chapter 11 and to conduct post-reorganization operations.

Delphi is a Troy, Mich.-based automotive electronics manufacturer.

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