Equities were messy today. Durable goods orders came in less than expected, down 1% verses an estimate increase of 1%, which sent but European and U.S. equities lower. This was then followed by the Fed’s Beige Book which showed that economic growth slowed in some areas dragged lower by commercial real estate and the expiration of the tax credit for home buyers. The Dow and S&P closed lower on the day at 10,497.88 (-0.38%) and 1,106.13 (-0.69%) respectively.
The loan market continues to look firmer, with flow names up around three-quarters of a point and off-the-run paper looked better as well, up around a quarter. The LCDX 14 followed equities lower to 96 ½ - 96 ¾. But, the sell-off in equities after the durable goods numbers prompted some profit taking, mostly in the flow names which have seen a significant run up over the past several weeks. Nothing really to fear here, its just some profit taking and not people looking to leave the market entirely. Today’s numbers furthered the argument that now is a prime-time to be investing in the credit markets as equities have become increasingly choppy. All eyes will be on the jobs number tomorrow, and most signs we have seen are pointing to a low number. But, we shall see. Also, get you bids in early for the $136MM BWIC, they are due by 11:30am.
- Europe stocks halt brisk one-week rally
- Stocks, dollar ease on weak U.S. durable goods
- Some yields fall at Portugal debt auction
- Some U.S. districts report slowing economy-Fed
- Profit-taking halts US corp spread tightening
- Las Vegas Sands tops estimates as Asia outperforms
- Visteon gets loan holder support for reorganization
- Las Vegas Sands Corp Wednesday reported better-than-expected quarterly results on strong performance in Macau and Singapore. Adjusted 2Q earnings were $129.3 million, or 17 cents a share, compared with $8.8 million, or 1 cent a share, a year earlier. Analysts on average expected of 9 cents a share.
- Office products maker Acco Brands reported 2Q net income of $5.2 million, or 9 cents a share, compared with a loss of $116.7 million, or $2.14 a share, a year ago. Revenue rose 4% to $316.5 million. Sales from the Americas segment increased 5% to $169.9 million.
- Diversified industrial manufacturer Manitowoc Co Inc late yesterday posted 2Q net income of $14.1 million, or 11 cents a share, compared with a loss of $12.3 million, or 9 cents a share a year ago. Sales fell 12% to $876.5 million, but food service sales rose 11% to $424.9 million.
- Jones Apparel Group Inc said overall revenue, which includes net sales and licensing income, rose 6.9% to reach $859.6 million. Jones said it expects 2010 full year revenue to range between $3.61 billion and $3.7 billion, according to a regulatory filing.
- Sprint Nextel said its 2Q loss widened to $760 million, or 25 cents per share, from $384 million, or 13 cents per share, a year earlier. The company said it lost fewer monthly contract customers in 2Q than analysts had expected.
- Tribune Co said it remains optimistic it can emerge from Chapter 11 before the end of the year, Reuters reported late yesterday. The company said it is moving toward an August 30 confirmation hearing. Voting on restructuring plan ends August 6.
- Las Vegas Sands' strip is up almost three points today as the company intends to launch an amendment and extension of its loan. The strip rose to 93.125-93.875 this morning from 90.5-91 yesterday. The company began sounding out lenders earlier this week on a potential amendment and extension of its $5 billion financing from May 2007. During a conference call to discuss the company's earnings, the company confirmed that it plans to launch the transaction later this week. "The transaction contemplates a paydown of our term loans and a reduction of a revolving credit facility commitment in exchange for the extension of maturities and other modifications to the credit agreement." Las Vegas Sands operates the Venetian Casino Resort and the Sands Expo and Convention Center in Las Vegas. It also operates the Sands Macao Casino in Macau, China.
- American Safety Razor LLC announced it has filed for bankruptcy protection after it reached an agreement with first-lien lenders under which they will purchase the company, it said in a company statement. The transaction and filing involve only the company's U.S. and Puerto Rican operations. Its other non-U.S. operations and entities are not borrowers under the debt that is being restructured. Under the terms of the agreement, the first-lien holders will serve as the stalking horse to establish a floor for a purchase of substantially all of the assets of the company. The acquisition includes the assumption of trade supplier, customer and employee obligations. The final transaction will be subject to court approval and is expected to be completed in the fourth quarter of 2010. American Safety Razor manufactures and distributes wet shaving razors and blades.
- Visteon Corp today announced it will not seek reinstatement of its term loan, if the term lender class votes in favor of the company's fourth amended plan of reorganization. Holders of Visteon Corp's term loan B are likely to see recoveries above par. Visteon said today in a statement it would provide term lenders with post-petition interest at the default rate. Typically this means the outstanding balance of the loan will be paid in full plus accrued interest at the default rate of interest. The default rate of interest is set forth in the credit agreement and is usually about two points higher than the regular rate of interest. Visteon's TLB is currently quoted in the 106.5-108 context. The company announced today it has signed a letter agreement with the steering committee of term loan lenders and the agent. Both parties affirmed their support of the company's fourth amended plan of reorganization. Now, as a result, holders of approximately 55% of the outstanding amount of Visteon's $1.5 billion credit facility have agreed to vote in favor of the plan. The steering committee, which is comprised of four financial institutions, has agreed to formally recommend to the remaining term loan lenders that they vote in favor of the plan. If approved the plan would allow bondholders to acquire the company's equity with a $1.25 billion rights offering. The money raised in the rights offering will be used to take out senior secured lenders.
On the Break
- Vertafore's new $550 million term loan B has risen to 99-99.75 since breaking this morning in the 98.75-99.75 range. Pricing was cut to LIB+500 from LIB+525 and the OID firmed at 98 from talk in the 97-98 range. A 1.75% Libor floor remained unchanged. Credit Suisse, Bank of America Merrill Lynch and Barclays Capital lead the $625 million loan backing Vertafore's $1.4 billion buyout by TPG Capital. The deal includes a $75 million, five-year revolving credit facility and the $550 million, six-year term loan. Vertafore makes software for the property and casualty insurance industry.
- GEO Group's new $200 million term loan B has traded up to 100.25-100.75 since breaking yesterday. The loan was sold at 99. The seven-year loan is priced at LIB+325 with a 1.5% Libor floor.
- Pricing on Savvis Inc's $550 million, six-year term loan has been flexed up to LIB+500 from LIB+475. The OID has firmed at 97 from talk of 97-98. A 1.75% Libor floor remains unchanged. The deal is expected to allocate Friday. There is also 101 soft call protection. Bank of America Merrill Lynch, Morgan Stanley, Credit Suisse and SunTrust leads the $625 million refinancing loan, which also includes a $75 million revolving credit facility due 2014. The corporate family and facility ratings are B1. Proceeds, along with cash on hand, will be used to refinance its $345 million, 3% convertible notes due 2012 and amounts under its existing $150 million revolver.
- Moody's Investors Service (Moody's) has affirmed NTELOS Inc's (NTELOS) existing senior secured credit facilities rating at Ba3. In conjunction with the company's proposal to acquire Mountaineer Telecommunications, LLC and subsidiaries (collectively "FiberNet"), NTELOS is planning to issue a $125 million incremental term loan under the existing senior secured term loan facility. The $170 million acquisition, which will increase debt outstanding under the term loan facility to $755 million, is expected to contribute $25m in EBITDA initially and possibly another $5-$10 million in EBITDA after merger benefits are realized. Although Moody's believes the merger is accretive to EBITDA, the incremental leverage will likely result in a slight deterioration in relevant credit metrics. Consequently, Moody's revised the company's outlook to stable from positive. The existing Ba3 corporate family rating (NYSE:CFR) and B1 probability of default rating (PDR) were affirmed. NTELOS's operating performance has been stable over the past 4-6 quarters, in contrast to the overall economy and telecommunications industry.
- Price guidance of 7% area (range 6.90%-7.00%) is out on Ford Motor Credit Co LLC USD benchmark SEC registered sr unsec notes due August 15, 2017 (7y). NC. Ba3/B-/BB- (s/pos/pos). BAML/BNP/Citi/GS joint books. 2/15/11 first pay. Pricing today. Settle August 4 (T+5).
- EnergySolutions Inc USD300m 144A sr notes due 2018. B3/BB- (stable/negative). Via JPM/CS/Citi. UOP: along with a new USD560m sr sec term loan B and USD125m revolver (via JPM), to refinance its existing sr sec credit facility. Biz: provides nuclear energy services. HQ: Salt Lake City, UT.
- inVentiv Health Inc (VTIV) USD275m 144A sr notes due 08/15/18 (8y). NC4 (MWC T+50bp). Equity claw: 3y 35%. Caa1/B- (stable/stable). Via BAML/Citi/CS/DB joint books. With reg rights. 10% at 100. +739bp vs 4% 08/15/18. Del 08/04 (T+5). 144A CUSIP: 46122EAA3.