Overnight, global equities were firmer after the BP agreement and a successful Spanish Bond sales calmed investors and US Equities were set up to have a strong open. However, the worse than expected jobless claims number prompted a flight to safety and futures reversed course, treasuries and gold rallied. The jobless claims number came in worse than expected, showing that the US shed 12K more jobs. At 10 a.m. the Philly Fed index showed signs that manufacturing was slowing, plunging 13.4 points to 8, the lowest reading in 10 months. The Leading Economic Index rose +0.4% to 109.9, continuing its rise since April of last year. But comments out the Conference Boards chief economist that public debt is going to hinder future growth spooked the market and the market sold off again.
Despite signs of slowing growth, the loan market opened higher. Flow names and recently beat up names were seen up a quarter to half a point and the LCDX 14 was at 96 3/8 – 96 5/8 (+1/4). Much of the movement was due to the late day rally yesterday that carried over into today. Overall the market had a positive tone with advancers outpacing declines by 1.5:1. In the afternoon cash was quiet and the LCDX 14 moved up an eighth due to the late day rally in equities to finish at 96 ½ - 96 ¾. With the primary bond market struggling, eliminating the bond for loan take outs, and a slowly growing loan pipeline, it should be slow goings for the secondary in the weeks to come. But, have no fear, earnings season is almost hear, and hopefully it will give us reason to rally. Until then we will continue to battle low volumes and heightened volatility.
- Holders more than 68% of Lions Gate Entertainment shares rejected the Icahn Group's tender offer, the company announced this morning. Only 13.2% of the outstanding shares were tendered into the offer at its expiry, the company said. "The vast majority of our shareholders have yet again demonstrated that they are serious about protecting the value of their investment in Lions Gate," the company said.
- Hertz Global Holdings Inc said U.S. regulators sought more information on its potential acquisition of rival Dollar Thrifty Automotive Group Inc. The company received a "second request" letter from the Federal Trade Commission on Monday afternoon, a Hertz spokesman said.
- Yesterday Spansion announced 2Q10 adjusted EBITDA guidance of $50-65 million. The company's 2010 adjusted EBITDA guidance is $260-300 million.
- Deutsche Bank has provided a $400 million senior secured credit to refinance debt at Radio One, according to an SEC filing. The credit includes a $50 million, four-year revolving credit facility and a $350 million, six-year term loan. Deutsche Bank will use "commercially reasonable efforts" to syndicate the term loan. The term loan will be priced at LIB+500 with a 2% Libor floor and a 99 OID. The revolver will be priced at LIB+450 with no Libor floor and a 50bp undrawn fee. In connection with the refinancing, the company will also raise $100 million in secured second-lien notes due 2016 and $267.4 million in unsecured exchange notes due 2017. The corporate family rating could be upgraded by Moody's to B3 pending the exchange of the notes and the refinancing. S&P has placed the CCC+ corporate credit rating on creditwatch with positive implications and could upgrade it to B. The term loan is rated B1/BB-. Radio One, headquartered in Lanham, Maryland operates or owns interests in broadcasting stations, a cable television network, and Internet-based properties, largely targeting the African-American audience. The company reported sales of approximately $270 million through the 12 months ending March 31, 2010.
- Price talk on Vision Solutions' $245 million term loan is LIB+500 with a 1.75% Libor floor and a 98.5 OID. The corporate family and facility ratings are B1/B+. Jefferies launched the deal today to back the $242 million acquisition of Double-Take Software by Vision Solutions, a Thoma Bravo portfolio company. The deal also includes a $15 million revolving credit facility. Vision Solutions is a provider of high availability, disaster recovery and system management solutions for IBM Power Systems.
- Madison Capital is in market with a $120 million deal to back Veritext's buyout by Investcorp, sources said. The deal includes a $15 million revolving credit facility, a $75 million term loan B and a $30 million acquisition line, which is to be used in 30 months. Price talk is LIB+475 with a 1.5% Libor floor and a 98 OID. Veritext provides deposition and litigation services.
- Goldman Sachs launched yesterday a $160 million, five-year term loan for Gun Lake Tribal Gaming Authority. Price talk is LIB+900 with a 2.5% Libor floor and a 98 OID. Proceeds are to fund the construction of the Gun Lake Casino, which commenced in September 2009. The casino is expected to open in 1Q11. The casino, owned by the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, will be located in Michigan.
- BMO is in market with a $105 million bank loan backing a dividend recap for Kool Smiles. The deal includes a $10 million revolving credit facility and a $95 million term loan. Friedman, Fleischer & Lowe is the sponsor. Price talk is LIB+525 with a 1.5% Libor floor. The company is a dental practice management business.
- Vulcan Materials is offering an upfront fee of 45bp for all ticket levels on its $450 million, five-year senior unsecured term loan.. SunTrust, Regions Bank and BBVA Compass are joint lead arrangers and bookrunners. The facility has an up to $150 million accordion. The loan amortizes in quarterly installments of $10 million from June 2013 with a bullet at maturity. Financial covenants include a maximum debt to total capitalization ratio of 0.65 times. Pricing, based on a ratings grid, ranges from LIB+150-250 for A-/A3 to BB+/Ba1 ratings. Proceeds are for refinancing. The borrower earlier approached its existing lenders. Vulcan Materials produces aggregates used in construction. It reported a loss of $39 million and an EBITDA of $59 million for the first quarter of 2010.
- Precision Drilling Corporation is seeking to amend its 2008 credit to reduce the Libor floor and interest rate on its term loan Bs, the company said in a statement. RBC Capital Markets is leading the amendment. Precision Drilling entered into a $400 million TLB and $75 million TLB-2 in December of 2008 at the height of the financial crisis (story, 9Dec08). The loans cleared at LIB+725 and were issued 85 cents on the dollar. Both loans are currently quoted above par. The company's statement came in response to the Icahn Group's announcement that the cash value of shares tendered through June 16 is about $109.2 million. Icahn said he would own about 31.8% of the company after the purchase of these shares.