Cablevision up on dividend OK; US Airways breaks; Hertz dips; Cendant cuts spread; Buckeye sets talk

By Sara Rosenberg

New York, April 10 - Cablevision Systems Corp.'s bank debt inched its way higher during Monday's trading session as the company decided to go ahead with its special dividend plans, removing near-term repayment fears from the market.

Also in trading, Hertz Corp.'s term loan B came under some pressure Monday as investors worried that, based on the current market environment and comparable deal pricing, a repricing of the paper may be soon to come.

And, US Airways Group Inc.'s billion-plus term loan freed up for trading at plus-101 levels.

Meanwhile, in the primary, Cendant Car Rental Group LLC (Avis Budget Car Rental LLC) lowered pricing on its term loan and Buckeye Check Cashing Inc. came out with price talk on its first-lien bank debt now that ratings have been announced.

CSC Holdings Inc., the wholly-owned subsidiary of Cablevision, saw its term loans strengthen in trading as, after weeks of uncertainty, the approximately $3 billion special cash dividend to shareholders was finally authorized, meaning that the recently obtained term loan B will remain outstanding, according to a trader.

The company's term loan B closed out the day quoted at par ¾ bid, 101¼ offered, up from Friday's closing levels of par ½ bid, par 7/8 offered, the trader said.

And, the company's term loan A moved up on the news as well, basically to keep pace with the term loan B, with levels closing out the day at par 3/8 bid, par ¾ offered, as compared to Friday's closing levels of par ¼ bid, par ½ offered, the trader added.

After the close Friday, Cablevision announced that its board of directors approved the special dividend plan, under which NY group class A and NY group class B stockholders will receive $10 per share on each outstanding share. The dividend is payable on April 24 to holders of record at the close of business on April 18.

Investors had previously been unsure as to whether the plan would actually become a reality since Cablevision was in the process of trying to settle a lawsuit pending in New York Supreme Court in Nassau County which, among other things, challenged and sought to enjoin the special dividend.

The board of directors had even appointed a special committee of independent directors to evaluate the proposed special dividend and make a recommendation to the board as to whether a dividend should be paid and, if so, in what amount.

If the boards of directors had decided to do away with the special dividend, CSC Holdings was going to repay the term loan B borrowings that it received in late-March, which is why the bank debt has recently been bid around the mid-par area.

Cablevision is a Bethpage, N.Y., media, entertainment and telecommunications company.

US Airways trades atop 101

US Airways allocated its $1.25 billion five-year non-amortizing senior secured term loan (B2/B) on Monday, with the paper freeing up for trading at 101 3/8 bid, 101 5/8 offered, according to a buy-side source.

The term loan is priced with an interest rate of Libor plus 350 basis points. During syndication, the tranche was upsized from $1.1 billion and pricing came down from original talk of Libor plus 375 basis points.

GE Capital Markets and Morgan Stanley Senior Funding acted as joint lead arrangers on the deal, which actually closed on March 31, with GE acting as bookrunner.

Security is a fully perfected first priority interest in substantially all of the existing and future real and personal, tangible and intangible assets securing the existing ATSB term loans and the existing GE Capital Spare Parts and Spare Engines term loan, including among other things, cash, accounts receivable, ground service equipment, spare engines, spare parts, flight simulators, real estate and airport gates and slots at LaGuardia airport in New York as well as Ronald Reagan airport in Washington, D.C.

Proceeds were used to refinance the company's existing US Airways term loan, the existing America West ATSB term loans, the existing GE Capital Spare Parts and Spare Engine term loans and the existing Airbus loan.

US Airways is a Tempe, Ariz., provider of airline services.

Hertz slips in trading

Hertz's term loan B softened during Monday's market hours as investors are viewing it as a potential repricing candidate based on the recent amount of repricing activity in general and the success of Cendant Car Rental's credit facility at 100-plus pricing, according to traders.

The Park Ridge, N.J., vehicle rental organization's term loan B closed out the session quoted at par 7/8 bid, 101½ offered, down about an eighth to a quarter of a point on the day, traders said.

"Anything north of 225/250 coupon, people are starting to get concerned that there's a repricing. Look at Charter and Warner Chilcott," one trader remarked.

A second trader pointed to the Cendant deal as another cause for worry. Cendant Car Rental (Avis Budget Car Rental LLC) is currently in-market with a term loan that priced in the low-100-plus range.

Since ratings are similar on the Cendant (Ba2/BBB-/BBB-) and Hertz (Ba2/BB/BBB-) deals and they both operate in the same sector, investors are speculating that Hertz may try to lower its spreads to be more in line with Cendant's spreads, the trader explained.

Cendant reverse flexes

Cendant Car Rental reduced pricing on its $875 million six-year term loan Monday to Libor plus 125 basis points from original price talk at launch of Libor plus 150 basis points as the deal was well received by the market, according to a source.

Pricing on the company's $1.5 billion five-year revolver was said to have been left unchanged at initial talk of Libor plus 150 basis points, the source added.

JPMorgan and Deutsche Bank are the lead banks on the $2.375 billion credit facility, with JPMorgan left lead.

Proceeds from the credit facility, along with $1 billion in bonds, will be used to help fund the car rental group's - which includes Avis Rent A Car System Inc. and Budget Rent A Car System Inc. - spin-off from Cendant Corp. into an independent company that will be renamed Avis Budget Car Rental LLC.

Buckeye talk surfaces

Buckeye Check Cashing released price talk of Libor plus 275 basis points on its $20 million revolver and $130 million first-lien term loan as ratings of B3/B were assigned to the deal late last week, according to a market source.

There is currently no price talk being announced on the $40 million second-lien term loan (Caa2/CCC+).

Bear Stearns and Royal Bank of Scotland are joint lead arrangers on the $190 million credit facility, with Bear acting as bookrunner.

Proceeds will be used to help fund the leveraged buyout of Buckeye Check Cashing by Diamond Castle Holdings and management.

Buckeye Check Cashing is a Dublin, Ohio, provider of financial services to customers who need cash immediately.

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