First Data allocates, all three tranches seen higher; DAE trades up ¾ on the break; LCDX eases by 10 bps

By Paul A. Harris

St. Louis, Sept. 27 - The Thursday session saw First Data Corp. price and allocate a sizable portion of its $13 billion term loan B, with all three tranches firming in the secondary market.

Meanwhile a trader spotted the LCDX index closing at 97¼ bid, 97¾ offered, and added that the index had gone out Wednesday at 97.35 bid, 97.45 offered, and so was down approximately 10 basis points on the day.

The trader said that the index bounced around during the session but didn't have any firm direction one way or another.

Apart from the First Data news, which commandeered most of the market's attention, DAE Aviation Holdings Inc. priced the institutional strip of its $937 million secured credit facilities (B2/BB-) at 99.25, on the tight end of talk, and it had traded up to par by mid-afternoon.

Mitel Networks Corp. came with revised price talk for the institutional tranches of its $460 million credit facility.

And NV Broadcasting, LLC (New Vision Television) announced a Tuesday bank meeting for its $390 million of credit facilities, via UBS.

First Data trades up

Heading into Thursday, the underwriters were expected to allocate approximately $7 billion to $8 billion of First Data's $13 billion in term loan (Ba3/BB-/BB).

Credit Suisse, Citigroup, Deutsche Bank, Goldman Sachs, HSBC, Lehman Brothers and Merrill Lynch are the lead banks on the deal.

One market source said that $1.5 billion of the $5 billion B-1 tranche priced at 96.00, as did $4.05 billion of the $5 billion B-2 tranche. Meanwhile $1.5 billion of the $3 billion B-3 tranche priced at 97.00.

All three have Libor plus 275 basis points coupons.

This source, which had Thursday's total allocation just barely topping the $7 billion mark, was at the low end of the range given by various other sources, which topped out at around $10 billion.

What sources did agree upon, however, is that when the deal broke in the secondary it traded up.

Shortly after the allocation news circulated a trader spotted the B-1 tranche at 96¾ bid, versus the 96.00 OID.

The same source saw the B-2 tranche at 97 bid, up a point, while the B-3 tranche was at 97 1/8 bid, also higher versus the 97 OID.

Toward mid-afternoon another trader said that all three tranches were "up a point or so."

This source believed the total size of the Thursday allocation to be bigger, at around $10 billion, and spotted the B-1 tranche at 97 bid, the B-2 tranche at 97¼ bid, and the B-3 tranche at 97¼ bid.

"The underwriters did a good job," this source commented. "It's trading up.

"I don't know who they sold it to. My guess is that KKR Financial took $1 billion of the B-2.

"I think they had some chunky tickets early on," the source added.

"It remains to be seen if those people hang on, and whether the rest of the people who bought it are going to stay in for the long term, or just flip the stuff."

CLO bid still absent

At the Thursday close, another trader said that the First Data B-1 was going out at 96½ bid, 97 offered, versus the 96.00 issue price.

Although this source was not getting involved with either of the other tranches, the trader nonetheless reported hearing that the B-3 tranche was at 97 bid, 98 offered going out, versus the 97.00 issue price.

Prospect News inquired as to whether or not this trader looks for the First Data dollar prices to firm in the days ahead.

The source replied that without a regeneration of CLO demand, maybe not.

"Everybody is waiting to see if anyone will be bold enough to try to raise a CLO," the trader contended.

"If a couple of CLOs get done it should open people back up to that market in general, and the overall liquidity of the market should increase, in which case it would probably run another couple of points.

"Until then, however, prices are likely to bounce around," the trader added.

"If anything there is still room on the downside given all of the big deals that have to come."

DAE prices, trades up

Elsewhere on Thursday, DAE Aviation Holdings priced the institutional strip of its $937 million secured credit facilities (B2/BB-) at 99.25, on the tight end of the 99.25 to 99.50 price talk.

Barclays Capital led the deal.

The institutional strip is comprised of a $557 million Libor plus 375 basis points term loan B and a $280 million Libor plus 275 basis points asset sale loan.

The bank deal also included a $100 million Libor plus 250 basis points revolver.

Proceeds will be used to help fund the acquisition by Dubai Aerospace Enterprises of Standard Aero Holdings Inc. and Piedmont/Hawthorne Holdings from the Carlyle Group.

Soon after the DAE paper broke for trading, sources were spotting it up ¾ point at par bid.

An informed source told Prospect News that it was a well placed deal played by good loan accounts that like the company, allowing the underwriter to place the loan in good hands.

Mitel sets pricing

Meanwhile Mitel Networks set the price talk for the institutional tranches of its $460 million credit facility on Thursday.

The company's $300 million first-lien term loan (Ba3/BB-) is talked at Libor plus 325 basis points, while its $130 million second-lien covenant-light term loan (B3/CCC+) is talked at Libor plus 700 basis points.

Both tranches are talked at an original issue discount of 96.00. They had been marketed at 99.00 in July.

During syndication the first-lien term loan was upsized from $245 million and the second-lien term loan was downsized from $185 million.

The facility also includes a $30 million revolver.

Morgan Stanley and Merrill Lynch are leading the acquisition deal.

New Vision meeting Tuesday

Finally, Los Angeles-based NV Broadcasting (New Vision Television) will hold a bank meeting on Tuesday for its $390 million of credit facilities, via UBS.

The financing is comprised of $360 million of senior secured credit facilities and a $30 million senior unsecured holdco loan.

Proceeds will be used to finance New Vision's acquisition of Montecito Broadcast Group, LLC and refinance existing debt.

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