Chart Industries sets price talk; Dex, RH Donnelley dip on merger rumors; Calpine slide continues

By Sara Rosenberg

New York, Sept. 21 - Chart Industries Inc. came out with price talk on its credit facility as the deal launched Wednesday morning to be met with a good reception that included the placement of some early orders.

In the secondary, bank debt at both Dex Media Inc. and RH Donnelley Corp. moved down into the par region as rumors of merger talks sparked refinancing fears among market players.

Also, Calpine Corp.'s second-lien bank debt continued to plummet as more news reports surfaced that the collateral trustee for its first-lien bondholders has been inquiring about the use of proceeds from certain asset sales.

Chart Industries set opening spreads on its proposed $240 million credit facility (B1/B+) as syndication seemingly successfully kicked off with a 9:30 a.m. ET, 10 a.m. start, bank meeting in the New York Palace Wednesday.

The $60 million revolver was launched to investors with price talk of Libor plus 250 basis points and the $180 million term loan B was launched to investors with opening price talk of Libor plus 275 basis points, according to a market source.

Revolver commitments will get an upfront fee of 100 basis points.

As for the launch itself, that apparently went off on a positive note as "several early commitments" had already come in from lenders by midday, the source said.

Citigroup and Morgan Stanley are the lead banks on the deal, with Citigroup the left lead.

Proceeds will be used to help fund First Reserve Corp.'s leveraged buyout of Chart for a cash purchase price of $65.74 per share and a total transaction value of about $460 million, including the repayment of Chart's debt.

The transaction is expected to close by the end of October, assuming satisfaction of customary closing conditions.

Chart is a Garfield Heights, Ohio, supplier of products and systems for low-temperature and cryogenic applications.

Dex, Donnelley fall on refi fears

In trading, Dex Media's institutional term loans and RH Donnelley's institutional bank debt fell into the pars as speculation about merger talks between the two companies ignited fears that the bank debt may be refinanced, according to a trader.

Both the Dex and the Donnelley bank debt were quoted in the par ½ bid, 101 offered context by the close Wednesday, down from previous trading levels that were north of par, the trader said.

Rumor has it that the two directory publishers are involved in merger talks, but nothing definitive from either company has been announced at this time.

Dex is based in Englewood, Colo., and Donnelley is based in Cary, N.C.

Calpine slide persists

Calpine Corp.'s second-lien bank debt gave up at least another 2 points during Wednesday's market hours as talk continued to circulate that Bank of New York, the collateral trustee for holders of its secured bonds, has been asking questions about the manner in which proceeds from the July sale of oil and natural gas assets were put to use.

The bank paper was quoted at 77½ bid, 79½ offered, according to a trader.

On Tuesday, as rumors of the inquiries floated around, the bank debt dropped by about 3 to 4 points to 78 bid, 79 offered.

However, by late day Tuesday, the San Jose, Calif.-based power company's paper regained some ground with levels moving up to 80 bid, 81 offered for only about a 1 point loss on the day, a different trader said.

Delphi gyrates on bankruptcy doubts

Also, Delphi Corp.'s bank debt saw a slight weakening on the revolver front, while experiencing a slight gain on the term loan, as market players became more skeptical about the likelihood of a bankruptcy filing in the company's near future.

The revolver was quoted at 97½ bid, 98 offered and the term loan was quoted at 101¾ bid, 102¼ offered, according to a trader. By comparison, on Tuesday, the revolver was quoted at 97¾ bid, 98¼ offered and the term loan was quoted at 101½ bid, 102 offered.

On Wednesday, news articles surfaced claiming that Delphi's chief executive officer, Robert S. Miller, prefers to do an out-of-court restructuring, causing investors to lean away from the expectation of a Chapter 11 filing - which was obviously good news for term loan holders but not for revolver holders.

The only thing that was really working in the revolver's favor recently was the hope that the paper would be rolled into a debtor-in-possession facility and therefore lenders could be paid down at par. Consequently, the news that a court bankruptcy may not be the path of choice led to a softening in this particular debt's levels, the trader explained.

Delphi also denied on Wednesday the recent rumors that it has drawn the remaining $300 million under its $1.8 billion revolver. In August, the company drew down $1.5 billion under the revolver for liquidity purposes.

Delphi is looking to former corporate parent General Motors Corp. for some sort of financial bailout and has warned that it could be forced into Chapter 11 if it does not get concessions from the United Auto Workers union and help from GM.

The company has also said that a filing would come before Oct. 17 when federal bankruptcy laws will change, becoming less friendly to debtor companies as they will be given less time to come up with a reorganization plan.

Delphi is a Troy, Mich., supplier of vehicle electronics, transportation components, integrated systems and modules, and other electronic technology to vehicle manufacturers.

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