E-mail us: service@prospectnews.com Or call: 212 374 2800
Bank Loans - Convertibles - Distressed Debt - Emerging Markets
Green Finance - High Yield - Investment Grade - Liability Management
Preferreds - Private Placements - Structured Products
 
Published on 10/8/2003 in the Prospect News Bank Loan Daily.

Collins & Aikman continues to rise and stabilize in aftermath of reassuring lender call

By Sara Rosenberg

New York, Oct. 8 - Collins & Aikman Corp.'s term loan B continued to stabilize on Wednesday and in fact, was even quoted higher, as investors' comfort level continues to grow regarding the whole Chrysler situation.

The B tranche was quoted at 99 bid, 99½ offered and the A tranche was quoted at 98 bid, 98½ offered, according to a trader. On Tuesday, the term loan B was quoted at 98 bid, 99 offered.

This market support started to show following Tuesday's private lender call, which many walked away from feeling more positive about the potential to eventually get par back on the bank loan. Basically, bank lenders are feeling reassured about their position because Chrysler needs Collins & Aikman for the short term since it would take years to transfer over $1 billion in contracts to other companies and given that the term loan B is due in 2005, sources explained.

Prior to this lender call, the term loan B was quoted at 971/2.

Collins & Aikman has been a big focus in the secondary since this past Friday as investors reacted to a report in The Detroit Free Press reporting that DaimlerChrysler AG's Chrysler Group is looking to rebid nearly all of the current and future business it does with the company.

Collins & Aikman is a Troy, Mich. designer engineer and manufacturer of automotive interior components.

Charter Communications Inc.'s bank debt was unchanged to up slightly with the term loan B quoted at 97 bid, 97½ offered, the term loan A quoted at 95½ bid, 96 offered, the incremental term loan quoted at 96½ bid, 97 offered and the revolver quoted at 94½ bid, 95½ offered, according to a trader.

Charter is a St. Louis cable company.

Eastman Kodak Co.'s 2006 revolver traded at 96, according to a trader, who added, "There was actually a trade in it today, which there wasn't before. People were just quoting it."

On Wednesday the company announced that it priced $500 million of 7.25% senior notes due 2013 and $500 million of 3.375% convertible senior notes. Proceeds from both debt offerings are being used to repay a portion of Kodak's commercial paper borrowings and to partially fund its acquisition of PracticeWorks Inc.

Although Kodak is an investment-grade name, some dealers started quoting it the other week as the previously near par paper dropped following downgrades from Moody's Investors Service and Standard & Poor's, and the company announced plans to reduce its dividend.

As these events were unfolding the Rochester, N.Y. imaging company's revolver was quoted all over the place and even managed to fall as low as 92 bid, 93 offered late last week, the trader said.

In follow-up news, CenterPoint Energy Inc. closed on its $2.35 billion credit facility (Ba1). JPMorgan and Citigroup were the lead banks on the deal.

The three-year facility consists of a $1.425 billion revolver with an interest rate of Libor plus 300 basis points (compared to Libor plus 450 basis points under the previous facility) and a $925 million term loan B with an interest rate of Libor plus 350 basis points. A 12 bank syndicate participated in the revolver.

Security is the company's Texas Genco stock.

Under the new agreement the Houston energy company is continuing its commitment to limit the dividend paid on its common stock to an annualized $0.40 per share.

The new facility refinances the company's existing $2.85 billion credit facility, which had been reduced to $2.35 billion in September with proceeds from a $500 million debt issuance by CenterPoint Energy Houston Electric LLC.

As before, CenterPoint has agreed to use proceeds from any sale of generating assets to reduce borrowings under the loan. Also any cash proceeds from the issuance of securitization bonds in excess of the proceeds required to repay CenterPoint Energy Houston Electric's $1.31 billion term loan, due in November 2005, also must be used to reduce borrowings under the facility.

"We continue to execute our financing strategy which is to reduce our borrowing costs, ensure adequate liquidity and maintain financial flexibility for the company," said Gary L. Whitlock, chief financial officer, in a news release. "This new facility reduces our interest expense, extends the maturity on the facility and diversifies our financing sources. In addition, it reduces our reliance on the bank market. We believe that this refinancing further enhances our financial stability and liquidity during our transition period through 2005, by which time we expect to have recovered our investment in our generating assets and returned to a debt level more typical for a regulated utility."


© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.