Texas Competitive, First Data, HCA rise with market; Dollar General term loan moves up

By Sara Rosenberg

New York, Aug. 21 - The secondary market in general was firmer, although activity was light on Friday, pushing names like Texas Competitive Electric Holdings Co. LLC, First Data Corp. and HCA Inc. into better territory.

Also in trading happenings, Dollar General Corp.'s term loan B was higher as Moody's Investors Service and Standard and Poor's changed their outlooks on the company's ratings.

Cash market posts gains

Texas Competitive, First Data and HCA were all stronger during the trading session as the overall market saw an improvement in levels in sympathy with equities, although there was not enough volume to really get any momentum going, according to a trader.

Texas Competitive, a Dallas-based energy company, saw its term loan B-2 quoted at 75½ bid, 76½ offered, up about a point on the day, the trader said.

First Data, a Greenwood Village, Colo.-based provider of electronic commerce and payment services, saw its term loan B-2 quoted at 82 ¾ bid, 83 ½ offered, up about half a point, the trader continued.

And, HCA, a Nashville-based owner and operator of hospitals and surgery centers, saw its term loan B quoted at 93½ bid, 94 offered, up about a quarter of a point.

As for stocks, Nasdaq closed up 31.68 points, or 1.59%, Dow Jones Industrial Average closed up 155.91 points, or 1.67%, S&P 500 closed up 18.76 points, or 1.86%, and NYSE closed up 122.86 points, or 1.87%.

Texas Competitive reacts stronger

The trader went on to say that Texas Competitive's term loan B-2 gained more ground than most other names in the secondary market.

"Most names up half a point. TXU is up close to a point. But it got beat up over the past couple of days. It always moves more," the trader remarked.

"Plus it's in the 70s whereas other stuff is in the 80s or 90s, so it's a good buy," the trader added.

Dollar General trades higher

Dollar General's term loan B was better with the move, possibly just a result of the overall market strength and possibly as a result of a change in outlook from Moody's and S&P, according to a trader.

The term loan B was quoted at 96 bid, 97 offered, up from 95½ bid, 96½ offered, the trader said.

On Friday, Moody's revised the outlook on Dollar General's ratings to positive from stable and affirmed all existing ratings, including the first-out term loan at Ba3 and the first-loss term loan at B1, and S&P placed the company's ratings on CreditWatch with positive implications.

Both rating agencies attributed the change in outlook to the company's announcement that it intends to proceed with an initial public offering of common stock for which the proceeds will be used to repay existing debt.

Specifically, the company plans on redeeming senior subordinated notes and senior notes with the IPO proceeds.

In addition, the positive outlook reflects the agencies' expectation that Dollar General's earning will continue to improve leading to a strengthening of credit metrics.

Dollar General is a Goodlettsville, Tenn.-based discount retailer.

American Dental closes

American Dental Partners Inc. closed its $130 million senior secured credit facility due August 2012, according to a news release.

The facility consists of a $50 million revolver and an $80 million term loan, with initial pricing on the tranches set at Libor plus 600 bps. Pricing can range from Libor plus 525 bps to 600 bps based on the company's debt coverage ratio.

There is also an unused fee that can range from 37.5 bps to 62.5 bps, with the initial rate set at 62.5 bps.

Covenants include minimum net worth, and leverage and fixed-charge coverage ratios.

American Dental led by three banks

American Dental's credit facility was done via lead arrangers KeyBank, RBS and Bank of America, with KeyBank the administrative agent on the deal.

Proceeds from the credit facility were used to help refinance the company's existing credit facility and are also available for general corporate purposes, including working capital, acquisitions and affiliations and capital expenditures.

Other funds for the refinancing and for general corporate purposes came from the sale of 2.26 million shares of common stock at a price of $12.00 per share.

American Dental Partners is a Wakefield, Mass.-based provider of dental facilities, support staff and business services to dental group practices.

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