Language Line tweaks deal; TNS well met; US Airways, Delta slide with earnings; UAL softens

By Sara Rosenberg

New York, Oct. 22 - Language Line Holdings Inc. added an excess cash flow sweep to its credit facility on Thursday and is now focusing on the high end of original spread guidance, and TNS Inc.'s credit facility saw a good reception at its launch.

In other news, US Airways Group Inc. and Delta Air Lines Inc. saw levels on their bank debt head lower during the trading session following the release of quarterly results, and UAL Corp.'s term loan was down, probably in sympathy.

Language Line adds sweep

Language Line came out with a change to its in-market credit facility, adding a 50% excess cash flow sweep to the structure, according to a fund manager.

In addition, price talk on the $575 million credit facility (Ba3/B+) is now Libor plus 350 basis points with a 2% Libor floor, whereas at launch, it was presented at Libor plus 325 bps to 350 bps, the fund manager continued.

Prior to the launch, however, price talk on the deal was being guided in the Libor plus 350 bps context.

The original issue discount on the term loan is still being talked at 99.

"Believe it is getting done, but not substantially over," the fund manager added.

Language Line tranching

Language Line's credit facility is comprised of a $50 million five-year revolver and a $525 million six-year term loan.

Bank of America, Credit Suisse and Morgan Stanley are the lead banks on the deal, with Bank of America the left lead.

Proceeds will be used to refinance existing debt.

Language Line is a Monterey, Calif.-based provider of language-based services.

TNS sees good response

TNS' $400 million credit facility received a "very positive reception from not only existing but some new lenders as well" as the deal was launched with a bank meeting on Thursday, according to a market source.

The source went on to say that there are already a "number of soft circles" for orders.

The facility consists of a $75 million five-year revolver and a $325 million six-year term loan B, with both tranches talked at Libor plus 400 bps with a 2% Libor floor.

Pricing on the term loan B will be able to step down to Libor plus 350 bps if corporate ratings are upgraded to 4-B status and leverage is below 1.5 times.

Original issue discount on the term loan B is talked at 981/2.

TNS led by SunTrust

SunTrust is the lead bank on the TNS credit facility and has committed to provide up to $40 million of the new revolver and $15 million of the new term loan.

Proceeds will be used to refinance an existing senior credit facility comprised a $15 million undrawn revolver and $363.5 million in term loan debt.

Included in the existing term loan debt is a $230 million incremental term loan that the company obtained a few months ago at Libor plus 600 bps with a 3.5% Libor floor and 101 soft call protection for one year. Investors were offered the loan at an original issue discount of 90.

The credit facility is being done on a best-efforts basis.

TNS is a Reston, Va.-based provider of business-critical, cost-effective data communications services for transaction-oriented applications.

USI finalizes pricing

USI Holdings Corp. firmed pricing on its $100 million incremental senior secured term loan (B-) at Libor plus 500 bps with a 2% Libor floor and an original issue discount of 95, according to a market source.

At launch, the discount was described as being talked in the mid-90s context.

Goldman Sachs is the lead arranger on the deal that will be used for general corporate purposes.

In June, the company had approached the market with a $117 million incremental senior secured term loan (B-) due in May 2014 that was going to fund a tender offer for up to $100 million of its outstanding senior floating-rate notes due 2014 and 9.75% senior subordinated notes due 2015.

However, the loan was pulled because the tender offer was terminated as a result of minimal participation in the tender.

The pulled loan was being talked at Libor plus 575 bps with an original issue discount of 90.

USI is a Briarcliff Manor, N.Y.-based distributor of property and casualty insurance and employee benefits products.

US Airways down on numbers

Switching to the secondary market, US Airways' term loan gave up some ground in trading after the company announced third-quarter numbers that included a drop in revenues, according to traders.

The term loan was quoted by one trader at 67½ bid, 68½ offered, down a half a point on the day, and by a second trader at 66½ bid, 68½ offered, down from 67 bid, 69 offered.

For the third quarter, US Airways reported total operating revenues of $2.7 billion, down 16.6% from $3.3 billion in the prior year.

Net loss for the quarter was $80 million, or $0.60 per share, compared to a net loss of $866 million, or $8.46 per share, for the same period last year.

Excluding special items, the company reported a net loss of $110 million, or $0.83 per share, versus a net loss of $243 million, or $2.36 per share, in the third quarter of 2008.

As of Sept. 30, the company had $2 billion in total cash and investments, of which $500 million was restricted. About $137 million was raised by the company through an underwritten common stock offering and closing took place on an about $265 million aircraft financing during the third quarter.

US Airways amends

US Airways also announced on Thursday that it amended its credit facility, and in connection with that amendment, $400 million of bank borrowings was repaid, reducing the principal amount outstanding to about $1.17 billion.

In addition, the amendment permits the issuance of debt with a silent second lien on the assets pledged as collateral under the credit facility.

The amendment also provides for a reduction in the amount of unrestricted cash required to be held by the company to $850 million from $1.25 billion.

The amendment was completed on Oct. 20.

Citigroup is the lead bank on the deal.

US Airways is a Tempe, Ariz.-based provider of air transportation for passengers and cargo.

Delta loans inch lower

Delta Air Lines' bank debt was also a little weaker with its quarterly results that showed a larger net loss when compared with last year, while revenues for the quarter improved, according to a trader.

The Atlanta-based airline company's new term loan was quoted at par ½ bid, 101 offered, down an eighth of a point and the second-lien term loan was quoted at 83½ bid, 84½ offered, down a quarter, the trader said. The company's first-lien term loan, however, was unchanged at 90 bid, 91 offered.

For the September quarter, Delta reported a net loss of $161 million, or $0.19 per share, compared to a net loss of $50 million, or $0.13 per share last.

Excluding special items, the company reported net income of $51 million, or $0.06 per share. This result is $115 million better than the prior year on a combined basis.

Total operating revenue for the quarter was $7.57 billion, up 32% from $5.72 billion last year.

As of Sept. 30, Delta had $5.8 billion in unrestricted liquidity, including $5.5 billion in cash, cash equivalents and short-term investments and $300 million available under its undrawn revolving credit facility.

During the quarter, the company completed $2.1 billion in new financing transactions, addressing 40% of 2010 debt maturities and generating $600 million in incremental liquidity. The new financing consisted of $1.35 billion of secured notes, a $500 million revolver and a $250 million term loan.

UAL falls

UAL's term loan was lower on Thursday as investors were probably just reacting to the earnings results of the other airline companies and there were possibly a lot of sellers in the market, according to traders.

The Chicago-based airline company's term loan was quoted by one trader at 78 bid, 79½ offered, compared to Wednesday's levels of 79½ bid, 81½ offered, and by a second trader at 77½ bid, 79½ offered, down from 79 bid, 81 offered.

On Wednesday, UAL's term loan jumped up from around 76½ bid, 77½ offered as the company revealed that its net loss for the third quarter was $57 million, or $0.39 per share, compared to a net loss of $792 million, or $6.22 per share, last year.

Revenues for the quarter were $4.433 billion, compared to $5.565 billion in the third quarter of 2008.

The company also said that it ended the quarter with a total cash balance of $2.8 billion, an unrestricted cash balance of more than $2.5 billion and restricted cash of $309 million.

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