The market opened up better this morning but volumes were extremely light; about half of what we saw yesterday. It was almost too quiet and seemed like people were more interested in the World Cup than trading. And that may have been the case but people kept glancing back at the 200-day moving average in the S&P 500 to see what was going to happen. The past couple times we flirted with that level we got shot down and sold off around 5 points in the following session. Being that was the case a lot of people were short equities and were sitting back watching there positions. But, the bulls have been growing a silent majority and were successful in pushing the S&P through that resistance level. Into the close equities had a pretty substantial rally as everyone covered their shorts. With the bulls in full charge now, I would look to see the market move up another 3% to test the 50-day moving average next in the S&P.
The loan market benefited from the equity rally today and flow names and the LCDX 14 trended higher. The LCDX 14 opened up unchanged but traded higher as the day went on. It was last seen at 95 3/8 – 95 ¾ (+7/8). Flow names traded up by around half a point. It was noted that some buyers were nibbling at names that have been beaten up in the recent weeks. Volume continues to be very light but with buyers back in the pool, loan bids inched higher by around an eighth overall. Sentiment has changed and the market is feeling a better. I would not be surprised if we keep this trend going through month/quarter end as the market will try to push through the 50-day moving average in the S&P. So, I hope you guys are ready to let the dogs out. It could get interesting so keep your eyes open.
- News Corp announced a tender offer for the 61% of UK satellite-television company BSkyB it does not currently own for $11.6 billion. News Corp said it would fund the transaction with cash on hand and new debt. BSkyB's independent directors rejected the bid as too low.
- Visteon Corp on Monday amended its bankruptcy plan. Under the fourth proposed plan shareholders could receive up to 5 percent of the company. A hearing on the company's disclosure statement will continue today.
- Citi and Keybank have joined American Electric Power Co's $1.5 billion, three-year revolving credit facility at the top tier level prior to the retail syndication. JP Morgan and RBS are leads. Commitments are due today. According to Thomson Reuters LPC, the utilities company has an existing $1.5 billion revolver due March 2011 that is paying LIB+36 with a 9bp annual fee.
- WW Grainger Inc is expected to surface for a refinancing, sources said. According to sources, the market has already been sounded on the imminent deal. According to Thomson Reuters LPC, the company has a $500 million term loan due May 2012 (LIB+75) and a $250 million revolving credit facility due June 2011 (LIB+13.5). Both deals were led by Wells Fargo.
- A total of 40 banks piled onto Peabody Energy Corp's $2 billion, five-year unsecured financing including administrative agent Bank of America Merrill Lynch, co-syndication agents HSBC and Citi, and co-documentation agents Morgan Stanley and RBS, sources said. BAML, HSBC and Citi hold $90 million each, while Morgan Stanley and RBS hold $80 million each.
- Jefferies will launch Thursday a $255 million loan to back the $242 million acquisition of Double-Take Software by Vision Solutions, a Thoma Bravo portfolio company. The deal includes a $15 million revolving credit facility and a $245 million term loan.
- Michael Foods' $790 million, six-year term loan B is said to be netting orders at unofficial price talk of LIB+450-475 with a 1.75% Libor floor and a 99 OID. There is also 101 soft-call protection. Senior secured and total leverage is 3.8 times and 5.8 times, respectively. The corporate family rating from Moody's is B2, while the facility rating is B1. Commitments will be due June 21.
- Pricing on Camelbak Products' $95 million term loan B has been flexed up to LIB+525 from LIB+475, sources said. The 1.75% Libor floor and 99 OID remain unchanged. Proceeds are to refinance existing debt. The deal is unrated.
Amendments and Extensions
- Dean Foods is looking to extend one-third of its existing $1.8 billion, seven-year term loan B and 70% of its existing $1.5 billion, five-year revolving credit facility and its $1.5 billion term loan A.. The company is offering LIB+300 to extend all three tranches to 2016. Their TLB traded down about 2 points.
- ProLogis is seeking an amendment to reduce its total debt through October 2010 to roughly $2.17 billion from $3.5 billion, sources said. The deal consists of an $800 million tranche, a C$143 million tranche, a 1 billion euro tranche, a 117.4 billion yen tranche and a 103.4 billion won tranche. The borrower is asking to eliminate the C$ and won tranches, and reduce the euro tranche to 630.3 million euro and yen tranche to 56.4 billion yen. Also, the adjusted EBITDA to calculate fixed charge coverage ratio now includes allowed unconsolidated affiliates earnings of up to 25%, compared to the previous 15%. Under the amendment, "grant by borrowers of first lien in all intercompany debt in excess of $10 million is payable to borrower if such subsidiary does not guarantee the facility," compared to the original $1 million.
- Standard & Poor's Ratings Services today revised its rating outlook on the Las Vegas Sands Corp. (LVSC) family of companies to positive from negative. All related ratings, including the 'B-' corporate credit rating, were affirmed. Aside from Las Vegas Sands Corp., the LVSC family of rated companies includes Las Vegas Sands LLC, its Venetian Casino Resort LLC subsidiary, and affiliate VML U.S. Finance LLC.
- Moody's Investors Service revised the outlook of Dana Holding Corp to positive from stable and affirmed all of its ratings including it B3 CFR. The company's announced spending for additional restructuring actions should further improve its operating performance and credit metrics into 2011, Moody's said.
What to Watch Tomorrow June 16
• Housing starts, May (Census Bureau) 8:30 a.m. ET
• Producer price index, May (Bureau of Labor Statistics) 8:30 a.m. ET
• Industrial production (Federal Reserve) 9:15 a.m. ET
• Treasury to auction $25 billion 56-day cash management bills
• Penn National Gaming, Inc. at Macquarie small & mid cap conference 8 a.m. ET
• Emdeon at Goldman Sachs health care conference 8:30 a.m. ET
• Rand Logistics, Inc. Q4 earnings before market open, conference call 8:30 a.m. ET
• MSCI Inc. at William Blair growth stock conference 8:50 a.m. ET
• Scotts Miracle-Gro Co. at William Blair growth stock conference 8:50 a.m. ET
• OPTI Canada Inc. at CAPP oil & gas investment symposium 9:20 a.m. ET
• Genesee & Wyoming Inc. at Bank of America Merrill Lynch transportation conference 9:25 a.m. ET
• Allegiant Travel Co. at Macquarie small & mid cap conference 9:30 a.m. ET
• MedAssets, Inc. at ThinkEquity health care conference 10 a.m. ET
• Spansion Inc. Q2 earnings, conference call 10 a.m. ET
• Bill Barrett Corp. at Macquarie small & mid cap conference 10:45 a.m. ET
• Air Canada at Bank of America Merrill Lynch transportation conference 10:55 a.m. ET
• Dave & Buster’s, Inc. Q1 earnings before market open, conference call 11 a.m. ET
• WellCare Health Plans, Inc. at Goldman Sachs health care conference 11 a.m. ET
• Kansas City Southern at Bank of America Merrill Lynch transportation conference 11:35 a.m. ET
• Charles River Laboratories International, Inc. at William Blair growth stock conference 12:20 p.m. ET
• Health Net, Inc. at Goldman Sachs health care conference 12:20 p.m. ET
• HealthSpring, Inc. at Goldman Sachs health care conference 12:20 p.m. ET
• Omnicare, Inc. at Goldman Sachs health care conference 1 p.m. ET
• Watson Pharmaceuticals, Inc. at Goldman Sachs health care conference 1 p.m. ET
• Medco Health Solutions, Inc. at William Blair growth stock conference 1:40 p.m. ET
• PrivateBancorp, Inc. at William Blair growth stock conference 3 p.m. ET
• Pool Corp. at William Blair growth stock conference 3:40 p.m. ET
• TNS, Inc. at William Blair growth stock conference 3:40 p.m. ET
• Cooper Cos., Inc. at Goldman Sachs health care conference 5 p.m. ET
• Health Management Associates, Inc. at Goldman Sachs health care conference 5 p.m. ET
• Parexel International Corp. at Goldman Sachs health care conference 5:40 p.m. ET