Nextel trades in quiet market; Charter bank debt strengthens by about 50 basis points

By Sara Rosenberg

New York, Dec. 2 - Nextel Communications Inc. and Charter Communications Inc. saw some interest by investors on Monday in what was otherwise described as a quiet day in the bank loan market, according to market sources. Nextel softened slightly as it traded a couple of times, while Charter strengthened on better bond and equity performance over the last couple of days.

"It's a quiet day. Everybody's just getting back from the holiday," a fund manager said.

This sentiment was not felt by the buy-side alone. According to one trader, it was a really quiet day in the secondary as well since people were settling back in to work.

"Nextel [Communications] traded a couple of times today at 98¾ and then at 981/4," the trader said. "It's just a touch softer. You can't really read anything into that.

"Charter [Communications Inc.] was better bid. It's an 851/2/86½ market, about 50 basis points higher [than previous levels]," the trader continued, explaining that the improved quotes in the bank market are basically in reaction to the performance of the company's bonds and stock. "The bonds were up a couple of points. The stock is up about 60% over the last few days." However, Charter's equity did close lower on Monday at $1.82, down 22 cents or 10.78%.

Coming up in the primary, PerkinElmer Inc. is scheduled to hold a bank meeting on Tuesday regarding a new $545 million credit facility, according to market sources. Merrill Lynch is the lead bank on the deal.

The loan consists of a $100 million five-year revolver with an interest rate of Libor plus 300 basis points and a $445 million term loan B with an interest rate of Libor plus 350 basis points.

Proceeds will be used by the Boston technology company to help redeem convertible notes and to replace the existing revolver.

There were a couple of loan closings that occurred as companies wrapped up acquisitions.

First, El Paso Energy Partners LP completed its acquisition of the San Juan assets from El Paso Corp. for $782 million. The transaction was funded through $238 million under a new senior secured credit facility that matures in May 2004, the issuance of 10.9 million Series C equity units in El Paso Corp. and the sale of $200 million of 10.625% senior subordinated notes due 2012.

Chase, UBS Warburg and Goldman Sachs are the lead banks on the credit facility.

"We are thrilled to close this acquisition and add these valuable businesses to the partnership's stable of diversified, long lived, solid cash flow generating assets," said Robert G. Phillips, chairman and chief executive officer, in a news release. "We expect these assets to contribute between $115 million and $125 million of cash flow to our full year 2003 results or approximately $0.20 per unit of distributable cash flow.

"We are also pleased that we were able to put together a comprehensive financing package which immediately enhances our balance sheet by decreasing our pro forma September 2002 debt to total capital ratio to 65% from 69%," Phillips added.

El Paso Energy Partners is a Houston-based manager of a portfolio of energy interests and assets.

Second, BCE Inc. completed the sale of its Bell Canada directories business to Kohlberg Kravis Roberts and the Teachers' Merchant Bank. In conjunction with the sale, Bell Actimedia obtained a new credit facility consisting of a $63 million (C$100 million) six-year revolver with an interest rate of Libor plus 300 basis points, a $252 million (C$400 million) six-year term loan A with an interest rate of Libor plus 300 basis points, a $100 million term loan B with an interest rate of Libor plus 400 basis points and a $620 million term loan C with an interest rate of Libor plus 425 basis points.

CIBC World Markets, Scotia Capital and Credit Suisse First Boston are the lead banks on the deal.

And third, The leveraged buyout of the Vitamin Shoppe Industries Inc. by an affiliate of Bear Stearns Merchant Banking from FdG Associates was completed, according to a company announcement on Monday. In conjunction with this LBO, Vitamin Shoppe obtained a new $125 million credit facility (B1/B+), consisting of a $15 million five-year revolver with an interest rate of Libor plus 375 basis points and a $110 million 5 1/2-year term loan B with an interest rate of Libor plus 425 basis points.

Bear Stearns and BNP Paribas are the lead banks on this credit facility.

The Vitamin Shoppe is a North Bergen, N.J. seller of vitamins, supplements and minerals.

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