Wyndham's bond deal halts loan trading; Adelphia stable to down slightly; Riverwood to launch

By Sara Rosenberg and Paul A. Harris

New York, June 4 -Wyndham International Inc. and Adelphia Communications Corp. continue to steal the spotlight in the bank loan secondary market. Wyndham's loan has seen little to no trading as the market continues to focus on the bond deal, which just can't seem to get priced. Adelphia was level to slightly down, while participants are still looking for a conclusion to the company's long and troubling saga.

Wyndham experienced no trading activity, as the bank loan paper's bid/offer couldn't meet on an agreed price, a fund manager said. The loan was bid at 97½ and offered at 99½ Tuesday.

"I think that's opportunistic bids," the fund manager added.

The Dallas, Tex. lodging company is working on an offering of $750 million senior secured notes due 2008. Originally they had been expected to price during the week of May 27. Then pricing was pushed back to Tuesday with talk at 10¾%.

Now, "it looks like the pricing of the bonds will happen Thursday," the fund manager said. "I think they're negotiating additional covenants and terms of the deal."

"They're just redoing some of the covenants to satisfy investors," a syndicate source told Prospect News, adding that the bond deal is now expected to price Wednesday or Thursday.

The syndicate official also anticipates that the structure of the deal will be altered slightly.

JP Morgan and Bear Stearns are joint bookrunners on the notes.

Until the bond deal is resolved, chances are trading on Wyndham's bank loan paper will remain light, the fund manager added.

Wyndham's loan had been lifted by news of the bond deal, then fell back before rebounding this week as it appeared the deal would be completed.

Meanwhile Adelphia Communications Corp. is holding steady, according to some. While others say that the bank loan paper faded over the course of the day.

The Olympus loan was trading around 90½ and the Century loan was trading in the high 80s, a fund manager said. "Once there's a clearer picture, people will know what assumptions to make in the bid and what assumptions to make in the offer calculations," the fund manager concluded.

However, according to a trader, the Coudersport, Pa. cable company's loan was down by approximately a point or two. "It's not hugely material," the trader said. "It looks like someone who's trying to buy the paper is trying to push it down."

Tyco International Ltd. is trading at consistent levels in the mid-90s, according to a trader, despite the recent controversy surrounding former chairman and chief executive officer, L. Dennis Kozlowski.

Kozlowski resigned from the Pembroke, Bermuda diversified manufacturing and service company on Monday due to "personal reasons" and is temporarily being replaced by John Fort, according to a company press release. On Tuesday, Kozlowski was indicted on sales tax evasion and pled not guilty to the charges.

Coming up in the primary, Riverwood Holding Inc. is scheduled to launch its $250 million add-on term B on Wednesday, according to a syndicate source. The term B expires in approximately 5.8 years and has an interest rate of Libor plus 250 basis points. Deutsche and JPMorgan Chase are lead banks on the deal.

Proceeds from the Atlanta, Ga. paperboard and packaging company's loan will be used to repay outstanding debt.

"It should do OK," a trader said. "In this overall market a deal has to be really bad to not succeed."

Also scheduled for Wednesday is Buffets Inc.'s bank meeting regarding its new $255 million senior secured credit facility (BB-), according to market sources. Credit Suisse First Boston is the lead bank on the deal and Fleet Securities is the syndication agent.

The Eagen, Minn. restaurant chain's loan consists of a $205 million seven-year term B with an interest rate of Libor plus 350 basis points, a $30 million five-year revolver with an interest rate of Libor plus 325 basis points and a $20 million five-year letter of credit facility with an interest rate of Libor plus 325 basis points, market sources said.

The new institutional tranche is priced 25 basis points cheaper than the existing term B, which was at Libor plus 375 basis points, a market professional said. The company is using the credit facility "to refinance its capital structure and pay sponsor dividends," he added.

Advanced Medical Optics Inc. is expected to hold a bank meeting this week for its new $140 million credit facility (B1/BB-), according to market sources. Merrill Lynch and Bank of America are the lead banks on the deal. The loan consists of a $100 million six-year term B with an anticipated interest rate of Libor plus 350 basis points and a $40 million five-year revolver with an anticipated interest rate of Libor plus 300 basis points, according to market sources.

Advanced Medical Optics is an Irvine, Calif. manufacturer and marketer of medical devices for the eye and contact lens care products.

"I expect it will go well," the fund manager said. "The company has very little leverage with under two times senior debt and under four times total debt."

In other news, Venetian Casino Resorts LLC, a subsidiary of Las Vegas Sands Inc., closed its new $375 million senior secured credit facility (B2/B+), flexing down the pricing on the term B. Goldman Sachs and Scotiabank are the lead banks on the deal.

The Las Vegas, Nev. resort's loan consists of a $250 million six-year term B with an interest rate of Libor plus 300 basis points, flexed down from a spread of 350 basis points, a $75 million five-year revolver with an interest rate of Libor plus 300 basis points and a $50 million delayed draw term A with an interest rate of Libor plus 300 basis points, a syndicate source said. Basically all assets secure the facility.

Proceeds are being used to repay, redeem or repurchase outstanding debt and finance the construction and development of the Phase 1A addition.

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