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Loan Market Commentary 03/02/2010

Well this morning the market opened up strong as sentiment is growing more positive that the situation in Greece is settling down. We get the details of the “new” aid package later this week and people are speculating that something tangible is going to come out of this as Greek CDS has hit a 7-week low. The Ford and Pfizer news also helped push Equities higher. However, there wasn’t much behind the rally to begin with and things started to pull back in the afternoon.
There is not much to say about the loan market today as most of the major buy-side players are down in Miami at the JPM conference, so the market was very quite. On a positive note overall the market was firm. Most of the index names were up an eighth and Auto names and OEM’s were up about a quarter on the back of the Ford news. HCA’s term loan continued to firm after their announcement yesterday to issue bonds to take out their existing term loans. We saw some pockets of activity in some distressed credits today, so people are back digging in the sandbox searching for treasures. The LCDX 13 started the day off strong at about 102 1/8 – 102 3/ 8, but fell off with equities at 101 7/8 – 102 1/8.
  • Solutia Inc announced that on Thursday it will put in place a $1.05 billion senior secured credit facility to replace its existing senior secured term loan due February 2014 and its asset-based revolving credit facility due February 2013. The new loan will include a $300 million revolver due 2015 and a $750 million term loan due 2017. A portion of the financing may also be used to fund the company's recently announced acquisition of Etimex Solar GmbH. Deutsche Bank, Jefferies Finance, Citi, HSBC and JP Morgan are acting as joint lead arrangers and joint bookrunners on the refinancing.
  • Charter Communications Inc's "old" TLB is up about 25bp from yesterday's levels after the company posted a rise in 4Q09 revenue and EBTIDA. This morning, the cable company said revenue rose 3.3% from the year-earlier period to $1.71 billion. Adjusted EBITDA rose 2.4% to $633 million.   
  • Intergraph has netted the requisite approval from its lenders to seek a $300 million incremental term loan, which will, along with cash on hand, be used to pay a dividend payment of $347 million to the company's owners. JP Morgan is leading the deal. The approvals came after pricing on Intergraph Corp's existing $420 million first-lien term loan and $200 million second-lien term loan was bumped up by an additional 25bp to LIB+425 and LIB+825, respectively, in light of opposition from a block of lenders to the company's proposed amendment. Pricing on the incremental term loan is at LIB+400. The incremental TL is being offered at 99 and has a Libor floor of 2%. A 101 soft-call protection in year one is being offered on the incremental and existing loans. The existing first- and second-lien lenders are also being offered with a 50bp amendment fee. The existing first-lien is being offered without a Libor floor, while the existing second-lien features a 2% Libor floor, as per the initial launch of the amendment.
  • Graceway Pharmaceuticals' first- and second-lien loans rose 1-2 points today following a private lenders call, sources said. The first-lien loan is currently 70 bid, while the second-lien loan is now quoted in the high-30s. Last week, Graceway's loans dropped after a competitor gained FDA approval of a generic version of the company's Aldara drug. E. Fougera & Co. announced the FDA approval of its Imiquimod Cream 5%, which is generically equivalent to Graceway's Aldara drug.