Close to $1 billion BWIC surfaces; LCDX drops with equities; NFR sets pricing

By Sara Rosenberg

New York, Oct. 24 - On Friday, a nearly $1 billion BWIC was announced to market participants with bids scheduled to be due early during the week of Oct. 27.

Meanwhile, the secondary market was relatively quiet with levels basically unchanged, but LCDX 10 slid lower in sympathy with stocks.

In other news, NFR LLC wrapped up syndication of its revolving credit facility and came out with pricing details on the new deal.

BWIC emerges

Market professionals were approached on Friday about a $969 million BWIC, with the request being that bids are due on Tuesday, according to traders.

The portfolio is made up of some well known names, such as Delta Air Lines Inc., Northwest Airlines Corp., UAL Corp., Swift Transportation Co. Inc., General Motors Corp. and Calpine Corp.

There are also some not so well known names such as TMD Friction, one trader remarked.

All in all, the portfolio is comprised of somewhere around 135 names.

When asked what type of affect this BWIC will have on the loan market, the trader said that he wasn't sure. However, he admitted that usually a portfolio of this magnitude puts pressure on the market.

"Monday and Tuesday should be interesting. There's a $59 million [BWIC] on Monday. That's really a non event. Now a $969 million one on Tuesday," the trader added.

The trader noted that only about 50% sold off from the last large BWIC, which was $600 million-plus and came out of Highland Capital.

"I would assume it should bring the market down a little bit, but before you could know you have to know where things trade in it," a second trader said. "They're not good for the market, put it that way."

Cash holds steady

The cash market in general on Friday held in fairly well despite the sell off in stocks, with levels pretty much described an unchanged in light trading, according to traders.

"Really, really thin," one trader remarked about the trading session. "Overall tone is scared. Everybody is sitting around. Equities were down hard today but loans held up. Somebody called it a decoupling if equities and loans. I call it a lack of volume causing incorrect pricing of loans. Nobody out there doing anything in loans, so people are just quoting yesterday's levels."

"Last we heard is there's 15 buyers in 15 names, making up 90% of the loan volume all week. Trading big chunks of high liquid names like Alltel [Communications Inc.], First Data [Corp.] and TXU [Texas Competitive Electric Holdings Co. LLC]. They're also non-traditional loan market participants, from what we heard," the trader continued.

On Friday, Alltel, a Little Rock, Ark.-based provider of voice and advanced data services, saw its term loan B1 and B2 quoted at 93½ bid, 94½ offered, compared to 94 bid, 95 offered on Thursday, the trader said.

First Data, a Greenwood Village, Colo., provider of electronic commerce and payment services, saw its term loan B-2 quoted at 72 bid, 7 ½ offered, compared to 72½ bid, 74 offered on Thursday, the trader continued.

And, TXU, a Dallas-based energy company, saw its term loan B-1 and B-2 quoted at 76½ bid, 77 offered, versus 76½ bid, 77½ offered on Thursday, the trader added.

LCDX slides

Unlike cash, LCDX 10 did post some losses in the trading session as it moved lower with the equities market, according to a trader.

The index was quoted around 84 bid, 84.75 offered, down from Thursday's levels of 85.50 bid, 86.25 offered, the trader said.

Meanwhile, Nasdaq was down 51.88 points, or 3.23%, Dow Jones Industrial Average was down 312.30 points, or 3.59%, S&P 500 was down 31.34 points, or 3.45%, and NYSE was down 244.39 points, or 4.31%.

NFR completes deal, reveals spread

Moving to new deal happenings, NFR LLC successfully syndicated and closed on its $250 million four-year revolving credit facility, and now that the transaction is finalized, details on pricing were made available, according to a market source.

The revolver has a $210 million borrowing and a $20 million overadvance that matures on June 30, 2009.

Pricing on the revolver can range from Libor plus 150 basis points to 225 bps. When in the overadvance, pricing will be Libor plus 300 bps, the source said.

The commitment fee on the revolver is 37.5 bps, but it goes up to 50 bps when in the overadvance, the source added.

BNP Paribas acted as the lead arranger on the deal, with Capital One the syndication agent.

Proceeds from the revolver will be used for acquisition financing of on-shore properties.

NFR, a privately held company owned 50/50 by sponsors Nabors Industries and First Reserve Corp., is an onshore and shallow water exploration and production company.

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