Biomet loan trades higher; LCDX trades flat; Metavante $2 billion bank meeting set for Tuesday

By Paul A. Harris

St. Louis, Oct. 4 - With the three-day Columbus day weekend approaching, a trader said that the new LCDX 9 and the LCDX 8 both traded flat on Thursday.

The source added that the volume of rolls into the LCDX 9 from the LCDX 8 was definitely lower, and added that the market was flat overall, on low volume.

Noting that stock prices were also flat on Thursday, the trader said that the LCDX 9 went out at 99.35 bid, 99.75 offered, while the LCDX 8 closed at 97.25 bid, 97.35 offered.

Meanwhile a money manager told Prospect News that the leveraged loan market "continues to grind in," with prices moving toward par.

"The market isn't changing radically," the investor said. "But every day it's a little stronger."

Biomet trades higher

The money manager spotted the Biomet Inc. term loan at 99 bid, 99¼ offered early Thursday afternoon, and added that it had been at 98¾ bid earlier in the day.

Throughout the Wednesday session, the paper had traded in a high-98 bid context, the source noted, adding that on Sept. 28 it was 98½ bid.

This investor said that the loan was priced at par, and recounted that pricing must have occurred an instant before the subprime mortgage mess sent the leveraged markets spiraling down, taking the Biomet paper along with it.

"It was exactly the wrong moment for investors, but exactly the right moment for the issuer and the banks," the source observed.

First Data steady

Elsewhere sources told Prospect News that there was little volume and no movement in the three tranches of the First Data Corp. term loan.

One source saw the B-1 tranche at 96¼ bid and the B-2 tranche at 96½ bid. Both of those tranches were priced at original issue discounts of 96.

Meanwhile the B-3 tranche, which was priced at 97, continued to trade Thursday below the issue price, at 96 7/8 bid.

"The panic is out of the market," said the money manager, who provided the levels on First Data.

"But the structural pressure on the dealers to get rid of some of their paper still exists.

"I think there will continue to be some discounts. Some of the dealers have Nov. 30 year-ends, and want the risk off of their books by then.

"But the discounts are not going to be huge or exciting.

"There was a lot of money raised in August by people who thought they were going to be able to scoop up hung bank loans at huge discounts.

"Now some of that money is being given back to investors because the huge discounts never materialized."

Elsewhere this source saw the GateHouse Media, Inc., term loan at 93¼ bid, 94¼ offered, and "moving up a little."

Metavante fixes bank meeting

A bank meeting is set to take place Tuesday for Metavante Corp.'s proposed $2 billion senior secured credit facility (expected ratings Ba2/BB).

The deal is comprised of a $1.75 billion seven-year term loan talked at Libor plus 175 basis points and a $250 million six-year revolver which is expected to price at Libor pus 137.5 basis points.

JPMorgan, Morgan Stanley, Lehman Brothers and Robert W. Baird & Co. are the lead banks.

Proceeds will be used to help fund the company's spin-off from Marshall & Ilsley Corp.

Under the spin-off, Marshall & Ilsley shareholders will receive one share of Marshall & Ilsley stock as well as one share of Metavante stock for every three shares of Marshall & Ilsley stock held.

In addition, Warburg Pincus, a private equity firm, will invest $625 million to obtain a 25% equity stake in Metavante.

Metavante is a provider of banking and payment technologies.

GSI relaunches

GSI Group, Inc. relaunched its $355 million credit facility on Thursday, talking its $305 million first-lien term loan at an original issue discount of 97 and paying interest at Libor plus 300 basis points, according to an informed source.

The interest rate was increased from Libor plus 250 basis points.

The credit facility (B1/B), via UBS, is also comprised of a $50 million six-year revolver and a $120 million second-lien term loan talked at par to bear interest at Libor plus 500 basis points.

An informed source told Prospect News that the order book, which is set to close on Thursday, is well on its way to being oversubscribed.

Proceeds will be used to help fund Centerbridge Capital Partners, LP's acquisition of a majority stake in the company from Charlesbank Capital Partners and to refinance existing debt, including the company's 12% senior notes.

GSI is an Assumption, Ill., provider of agricultural equipment and services.

Elsewhere the primary market was quiet.

One source said that some of the TXU Corp. bank deal, believed to be comprised of up to $26.1 billion of senior secured credit facilities, could come next week.

Citigroup, Credit Suisse, Goldman Sachs, JPMorgan, Lehman Brothers and Morgan Stanley are the bookrunners for the massive LBO deal.

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