Tribune price talk emerges; GM edges higher; Idearc dips with numbers; LCDX, cash up with stock

By Sara Rosenberg

New York, March 12 - Tribune Co. came out with price talk on its proposed accounts receivable securitization facility as syndication on the deal kicked off with the holding of a bank meeting on Thursday morning.

Meanwhile, in the secondary market, General Motors Corp.'s term loan was stronger as the company revealed it will not need a loan this month, and Idearc Inc.'s term loan slid after quarterly results were released in which the possibility of a bankruptcy filing was discussed.

Also in trading, the LCDX 10 index and the cash market in general were both better on the day in sympathy with equities.

Tribune sets talk

Tribune held a bank meeting on Thursday morning in New York - which was described as being well attended - to launch its proposed $225 million one-year accounts receivable securitization facility, at which time price talk on the transaction surfaced, according to a market source.

The $75 million revolver and the $150 million term loan were both presented to lenders with talk of Libor plus 600 basis points with a 3% Libor floor, the source said.

Original issue discount on the two tranches is still to be determined, the source added.

Prior to the launch, talk was that the expected yield on the facility would be in the range of 10% to 12% including Libor spread, Libor floor and original issue discount.

Tribune loan for refinancing

Proceeds from Tribune's newly launched accounts receivable securitization facility will be used to refinance an interim $300 million accounts receivable securitization debtor-in-possession financing facility.

The interim facility was provided by Barclays back in July 2008 and expires on April 10.

Barclays is acting as the lead bank on the new transaction as well.

The actual borrower under the proposed deal is a bankruptcy remote special purpose entity.

Tribune is a Chicago-based media company.

General Motors rises

Switching to trading happenings, General Motors' term loan inched its way to higher ground as news emerged that the company does not need the additional funding it requested for March, according to a trader.

The term loan was quoted at 36½ bid, 41½ offered, up from Wednesday's levels of 36 bid, 41 offered, the trader said.

On Thursday, General Motors said that it advised the Presidential Task Force on the Auto Industry that the $2 billion of funding previously requested for March would not be necessary at this time.

The company explained that this development reflects the acceleration of its cost reduction efforts as well as proactive deferrals of spending previously anticipated in January and February.

On Dec. 31, the company entered into a loan agreement with the U.S. Department of Treasury for funding of $13.4 billion, which was already paid in three tranches.

Then, in a viability plan filed with the Treasury on Feb. 17, General Motors included a request for additional government funding so that it can continue operations until global automotive sales recover and its restructuring actions generate benefits.

GM reaches agreement with CAW

Also on Thursday, General Motors announced that GM Canada and the members of the Canadian Auto Workers union have ratified a new competitive agreement that is vital to the continued transformation of the Canadian operations.

The agreement will quickly reduce costs in Canada by significantly closing the competitive gap with U.S. transplant automakers on active employee labor costs and substantially reducing legacy costs by introducing cash contributions for health benefits, increasing employee health care cost sharing, freezing pension benefits and removing hourly pension cost of living adjustments.

In addition, GM Canada and the CAW will work together with the Canadian government to explore the possibilities of adopting a similar approach to the GM UAW VEBA in the United States.

General Motors is a Detroit-based automaker.

Idearc drops with earnings, bankruptcy talk

Idearc's term loan headed lower on Thursday following the company's release of disappointing quarterly financials and the discussion of a potential Chapter 11 filing, according to traders.

The term loan was quoted by one trader at 30 bid, 31 offered, down from 30½ bid, 32½ offered, and by a second trader at 29½ bid, 30½ offered, down from 30¼ bid, 31¼ offered.

For the fourth quarter, Idearc reported a net loss of $77 million, or $0.53 per share, compared to net income of $100 million, or $0.68 per share in the prior year.

Revenues for the quarter were $709 million, a 9.9% decrease compared to revenues of $787 million in the same period in 2007.

EBITDA for the quarter was $48 million, down 85.6% from $333 million in the previous year, and adjusted EBITDA was $287 million, down 18% from $350 million in 2007.

"Idearc's fourth-quarter financial results are disappointing as we expected," said Scott W. Klein, chief executive officer, in a news release. "We are making progress on our transformational and cost-cutting initiatives. However, the unprecedented economic challenges this nation is facing are creating never-before-seen obstacles for our clients and, as a result, for us as well."

Idearc evaluating restructuring

In its earnings release on Thursday, Idearc said that it is evaluating various options for restructuring its capitalization and debt service obligations as a result of covenant issues and to create a capital structure that will permit it to remain a going concern.

Some alternatives being considered include a pre-packaged or similar plan of reorganization under bankruptcy laws.

The company went on to say that even if a pre-packaged reorganization can not be agreed upon, it will likely file for Chapter 11 anyway.

Idearc leverage requirement a problem

The covenant issues that Idearc is facing include possible non-compliance with the leverage ratio sometime in the first half of 2009, and a default resulting from auditors issuing a going concern opinion in its Dec. 31 financial statements.

"Simply stated, restructuring our capitalization and debt obligations to a more appropriate level will provide us with the opportunity to prosper and grow in the years ahead," Klein said in the release.

"We are dedicated to implementing an appropriate capital structure to support our new strategic business plans and objectives. A debt restructuring plan that will strengthen Idearc's financial condition will position the company to compete more effectively in a challenging and rapidly evolving economic environment," Klein added.

Idearc is a Dallas-based provider of yellow and white page directories and related advertising products.

LCDX, cash gain ground

The LCDX 10 index and the overall cash market both has some strength to them on Thursday as stocks continued to grind higher, according to a trader.

The index was quoted at 73.55 bid, 73.80 offered, up from around 73.30 bid, 73.50 offered, the trader said.

And, the cash market was better by as much as three quarters of a point to a point, generally speaking, the trader remarked.

As for stocks, Nasdaq closed up 54.46 points, or 3.97%, Dow Jones Industrial Average closed up 239.66 points, or 3.46%, S&P 500 closed up 29.38 points, or 4.07%, and NYSE closed up 179.61 points, or 3.99%.

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