Overnight Japan’s Nikkei Index moved into bear country, hitting a 15-month low of 8,995 and setting the pace of the day for both Europe and the US, but the housing numbers were the main focus. The market opened up about 1% lower continued to grind lower into the housing numbers release. The numbers were expected to drop by 12% m/m, but that turned out to be a conservative estimate as the numbers actually showed at 27% drop m/m. This was largely expected by the market; no jobs, no stimulus, no housing, its that simple. So, after a quick shot down, the market recovered to levels previously seen prior to the number. Equities chopped around for the rest of the day and the Dow and S&P 500 closed at 10,040.45 (-1.32%) and 1,051.87 (-1.45%) respectively. Now, the question is, will the Dow dip below 10,000 tomorrow? Let’s see what happens with the July durable goods orders tomorrow as that will be what dictates the markets direction.
The loan market was heavier today, influenced by equities. Volumes continue to be light and most of the trading was situational, with buyers outweighing sellers. iStar’s 2nd liens were quoted higher today on the news that the company is seeking to extend the loans and bump pricing. Tomorrow, we get the durable goods orders number at 8:30 and the new homes sales number and 10am. Also, we get earnings from OSI Systems and Integra Telecom. It should be another quiet day with economic numbers at the helm. Have a good night.
- Existing home sales plunge to 15-year low
- Japan may consider unilateral yen-selling: report
- Stimulus boosted US GDP by up to 4.5 percent in 2Q 2010
- Fed wanted to avoid unintended tightening says Fisher
- Oil falls as weak U.S. data weighs on markets
- July existing home sales fall 27.2 percent to a 15-year low.
- Wall Street is anticipating a fiscal 3Q loss of 14 cents per share when luxury homebuilder Toll Brothers reports earnings tomorrow, Reuters reported. That is narrower than last year's loss of $2.93 but still weak compared with rivals Pulte and DR Horton, which reported profits in their most recent quarters.
- Keybanc raises Isle of Capri Casinos to buy from hold.
- iStar Financial's second-lien loans are better today after it was reported yesterday that the company is seeking to extend the loans in exchange for a bump in spread. The second-lien loan due 2011 is up about 75bp to 89.75-90.75 and the second-lien loan due 2012 is up about a point to 86 bid. The company is seeking to extend 2011 loan to June 2014 and the 2012 loan to June 2015. In exchange, the spread on both loans will be bumped up by 150bp to LIB+300 and LIB+350, respectively. The company is also planning to make a $500 million paydown on its first lien loan due June 2012. The remaining $500 million first lien loan will maintain the same maturity and pricing of 250 bps over LIBOR. That loan is unchanged today at 96-97.
- Fresenius Medical Care USA is scheduled to have a bank meeting in New York on Sept. 8 for an amendment and extension on its $1 billion revolving credit facility and $1.3 billion term loan A, sources said. Bank of America Merrill Lynch and Deutsche Bank are leads. The company is asking to extend both facilities to March 2013, according to sources. Another bank meeting is scehduled in Germany on Sept. 3. Fresenius AG sealed a $996 million and 165 million euro term loan C to refinance its term loan B. That loan has a spread of LIB+300 with a step down to LIB+275 if leverage falls to 3.5 times after March 2011. There is a EURIBOR/LIBOR floor of 1.5%. Fresenius provides dialysis treatment to through its network of dialysis clinics in North America, Europe, Latin America and Asia-Pacific.
- NOVA Chemicals generated 2Q10 net income of $51 million compared to a net loss of $83 million in 2Q09. Its 50% share of the INEOS NOVA joint venture`s operating loss was $5 million in 2Q10 compared to operating income of $6 million in the year earlier period.
- Nutritional supplements maker NBTY Inc has set a bank meeting for Sept. 7 to launch its $1.7 billion LBO loan. Earlier this month, the issuer began approaching a handful of large institutional shops. Sources who got an early look at the deal also said pricing would likely be in the LIB+400 area, along with a 1.75% Libor floor. Senior secured leverage is said to be three times, while total leverage is believed to be 4.8 times. Official price talk has not yet been released. Barclays, Bank of America Merrill Lynch and Credit Suisse lead the loan. The loan includes a $200 million revolving credit facility and a $1.5 billion senior secured term loan. The company will also raise $900 million senior unsecured notes. Carlyle Group will contribute $1.6 billion in equity. Under the terms of the merger agreement, Carlyle will acquire all of the outstanding common shares of NBTY for $55 per share in cash, representing a premium of approximately 57% over NBTY's average closing share price during the 30 trading days ended July 14.
- Standard & Poor's Ratings Services today raised its ratings on Atlanta-based Consolidated Container Co. LLC, including the corporate credit rating to 'B' from 'B-'. The outlook is stable. We raised the issue-level rating on the company's $405 million first-lien senior secured term loan B ($369.6 million outstanding as of June 30, 2010) by one notch to 'B' from 'B-' (the same as the corporate credit rating). The recovery rating on this debt remains unchanged at '3', indicating our expectation for a meaningful (50%-70%) recovery in the event of a payment default. We raised the issue-level rating on the $225 million second-lien term loan ($225 million outstanding as of June 30, 2010) to 'CCC+' from 'CCC' (two notches below the corporate credit rating). The recovery rating remains unchanged at '6', indicating our expectation for a negligible (0%-10%) recovery in the event of a payment default.
What to Watch tomorrow
- Durable goods, July (Census Bureau) 8:30 a.m. ET
- New home sales, July (Census Bureau) 10 a.m. ET
- Treasury to auction $36 billion five-year notes
- Treasury to auction $35 billion 21-day cash management bills
- Treasury to auction $25 billion 56-day cash management bills
- Integra Telecom, Inc. Q2 earnings, conference call 11 a.m. ET
- Shiloh Industries Q3 earnings, conference call 11 a.m. ET
- OSI Systems, Inc. Q4 earnings, conference call 12 p.m. ET
- ATP Oil & Gas Corp. at EnerCom oil & gas conference 12:30 p.m. ET
- Hain Celestial Group, Inc. Q4 earnings, conference call 4:30 p.m. ET
- Precision Drilling Corp. at EnerCom oil & gas conference 4:45 p.m. ET
- Key Energy Services, Inc. at EnerCom oil & gas conference 5:35 p.m. ET
- Global Geophysical Services, Inc. at EnerCom oil & gas conference 6:50 p.m. ET
- Vanguard Health Systems, Inc. Q4 earnings after market close
16th Annual Thomson Reuters LPC Loan Conference
Wednesday September 22, 2010
Marriott Marquis, New York City
Wednesday September 22, 2010
Marriott Marquis, New York City
Now in its 16th year, the Thomson Reuters LPC Loan Conference has become one of the industry's premiere annual events. Join investors, lenders, financial sponsors and treasurers as they discuss the outlook for a continually evolving loan market.
Click Here to view our detailed agenda and to access registration information.
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