Tuesday, May 17, 2011

LCD Daily Wrap-Up

Inside
M&A
AES Corp........................................................2

Power play
The day saw a string of launches, the largest of which was a $1.05 billion, seven-year term loan backing AES Corp.s purchase of Dayton Power & Light. Ahead of this afternoons conference call, Bank of America Merrill Lynch, J.P. Morgan and Morgan Stanley set price talk at L+325-350, with a 1% LIBOR oor and a 99.5 offer price. The $4.7 billion purchase of DPL was announced on April 20. At the time, BAML committed to provide a $3.3 billion unsecured bridge loan to back the transaction. The new term loan will include a security package thats substantially similar to companys existing loans. Meanwhile, Toys R Us, Mobilitie Investments, FTD Group and US Silica rolled out renancing business. Bank of America Merrill Lynch, J.P. Morgan, Goldman Sachs, Wells Fargo, Credit Suisse, Citi and Deutsche Bank set a quick turnaround on their $400 million incremental B-2 term loan renancing for Toys R Us. Commitments are due this Thursday. The bank meeting was yesterday. Talk is L+325-350, with a 1.25-1.5% LIBOR oor and a 99.5 issue price. The seven-year term loan will be used to renance debt. The existing $700 million covenant-lite term loan is priced at L+450, with a 1.5% LIBOR oor. Toys R Us in March pulled an opportunistic renancing, citing current difcult global market conditions, according to sources. TD Securities today outlined price talk on the $415 million loan package that launched for Mobilitie Investments II, a builder of wireless-communication towers. The deal is talked at L+375-400, with a 1.25-1.5% LIBOR oor and a 99.5 issue price, according to sources. GE Capital has joined as a joint arranger on the deal to the right of TD. The senior secured package is structured as a $25 million, ve-year revolving credit; a $150 million, ve-year delayed-draw term loan; and a $240 million, six-year B term loan. The ticking fee for the delayed-draw term loan starts at 125 bps. Proceeds from the TLB will be used to renance existing debt, while the delayed-draw term loan, which will be available for 24 months, will fund future capex. Leverage through the funded debt at closing will run roughly 7.5x, sources say. Agencies assigned B/B2 corporate issuer ratings. The loan drew ratings of BB-/B2. Wells Fargo set talk of L+325-350, with a 1.25% LIBOR oor and a 99.5 offer price, on the $315 million loan for ower company FTD Group. The deal is structured as a $50 million, ve-year revolver and a $265 million, seven-year B term loan. The new TLB includes continued on page 11

Renancing

Flint Energy Services Chrysler First Wind Capital Integra Telecom...............................................4 Exopack Holdings OneLink Communications US Silica..........................................................5 Toys R Us Fortescue Metals Group Caesars Entertainment R.R. Donnelley & Sons...................................6 Amkor Technology Petrohawk Energy Leap Wireless/Cricket Communications..........7 Connacher Oil and Gas Mobilitie Rosetta Resources Univita Health Fifth Third Processing Solutions.......................8 Dunkin Brands FTD Group......................................................9 Evergreen International Aviation

Secondary

Brigham Exploration, E*Trade Star West Generation $274.4M BWIC............................................10

Distressed

Merit Group DirectBuy FairPoint.......................................................11

Recent price flexes
Name OneLink Chrysler Scotsman Revlon Select Medical Pricing (spread/floor/OID) Original Post-flex 400 / 125 / 100.0 425 / 125 / 99.0 425 / 150 / 99.5 350 / 150 / 99.5 375 / 150 / 99.0 450 / 150 / 99.5 475/125-150/ 99 425 / 150 / 100.0 350 / 125 / 99.5 375 / 175 / 99.0 Post-flex YTM 6.35% 6.48% 5.88% 4.94% 5.54%

Secondary loan break prices

Name Star West KAR Auction Metaldyne Delphi Wyle OID 99.5% 99.5% 100.0% 99.8% 99.8% Break price 99.8% 100.1% 100.5% 100.4% 100.3% New-issue yield 6.23% 5.20% 5.35% 3.60% 5.93% Break yield 6.18% 5.07% 5.25% 3.47% 5.82%

Note: yield calculations are based on current LIBOR Source: Standard & Poor's LCD

LCD Leveraged Loan Analysis

As well as loan/high-yield news and commentary, Standard & Poors LCD produces market-leading leveraged loan data and analysis used by lenders and investors worldwide. For more information on LCD data, contact Marc Auerbach at (212) 4382703, or marc_auerbach@sandp.com.

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

M&A
AES oats preliminary talk ahead of call to launch $1.05B TL
Bank of America Merrill Lynch, J.P. Morgan and Morgan Stanley are talking their term loan for AES Corp. at L+325-350, with a 1% LIBOR oor and a 99.5 offer price ahead of this afternoons conference call. The $1.05 billion, seven-year term loan backs the purchase of Dayton Power & Light, sources said. The $4.7 billion purchase of DPL was announced on April 20. At the time, BAML committed to providing a $3.3 billion unsecured bridge loan to back the transaction. The new term loan will include a security package thats substantially similar to companys existing loans. Arlington, Va.-based AES tapped a Citigroup-led syndicate for an $800 million revolving credit, sources said. The 4.5-year revolver was priced at L+300. AES is a power generator and distributor, with a presence in 29 countries.
Chris Donnelly

By comparison, the loan was originally talked at L+400-425, with a 1.25% LIBOR oor and a 99-99.5 offer price, with a 101, one-year soft call premium, sources said. As reported earlier today, the automaker boosted the size of its second-lien bond deal by $1 billion, to $3.5 billion, while the loan was decreased by the same amount, to $2.5 billion. Commitments on the downsized TL are due by 10:00 a.m. EDT on Thursday, May 19. Citi is left lead on the accompanying $1.5 billion, ve-year revolving credit, with Bank of America Merrill Lynch, Goldman Sachs and Morgan Stanley as bookrunners, sources noted. Guidance is also out for the bond deal, with the eight-year (noncall four) tranche talked at 7.75-8% and the 10-year (non-call ve) tranche guided 25 bps higher, or roughly 8-8.25%, the sources add. Ratings came in at B+/B2 corporate and BB-/Ba2 on the loans. The notes, which are second-lien obligations, were rated B-/B2, and the outlook is stable/positive. Cash from transactions will be used to repay loans from the U.S. and Canadian governments. The loan package will include a $1.5 billion revolving credit facility. The transaction follows a decision by Fiat SpA to inject an additional $1.27 billion of cash equity in a move that will raise its ownership stake to 46%, from 30%, sources said. In addition, Fiat can further increase its stake up to 51% when it meets the last performance event included in the contract, which it expects by the end of 2011, Standard & Poors noted as it afrmed Fiats ratings.
Staff reports

Renancing
Flint Energy to roadshow C$200M of notes to repay debt
Flint Energy Services kicks off a roadshow today for a senior note offering denominated in Canadian dollars, according to sources. The eight-year (non-call four) notes will total C$200 million. Bookrunners on the deal are Credit Suisse and BMO Capital Markets, sources note. The issue is 144A for life, and cash from the transaction will be used to repay term loans. Excess proceeds will fund general corporate purposes. The notes will carry a change-of-control put at 101% of par and a 35% equity clawback for the rst three years, according to sources. Calgary-based Flint is a provider of integrated products and services for the oil-and-gas industry in Canada and the United States.
Jon Hemingway

First Wind oats talk for secured notes; pricing today

Price talk is in the 10% area for First Wind Capitals $200 million issue of seven-year (non-call three) secured notes, according to sources. That guidance swaps to a oating-rate equivalent of about

High-yield stats
This week (pro forma) Last week Volume ($ billlion) 13.98 10.44 3.54 122.37 108.75 13.62 Bids 103.38 103.77 (0.39)

Chrysler boosts price talk on downsized TL

Chrysler this morning boosted price talk on its now-$2.5 billion term loan to L+475, with a 1.25-1.5% LIBOR oor and an 99 offer price, according to sources. In addition, the six-year loan now has a one-year non-call period followed by 102, 101 call premiums in years two and three, respectively.

Year-to-date 2011 Year-to-date 2010

Current flow names Last week

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

L+740. Pricing is expected later today via Credit Suisse, Deutsche Bank, Goldman Sachs, and RBS. Proceeds from the 144A-for-life offering will be used to repay an existing term loan, to fund capital expenditures, and for general corporate purposes. A portion of the proceeds will fund a reserve account for near-term projects and debt service, according to sources. Notably, the rst call is at a higher-than-usual par plus 75% of the coupon, sources note. The deal otherwise includes more standard high-yield features such as a three-year equity clawback for 35% and a change-of-control put at 101% of par.
Standard & Poor's LCD high-yield forward calendar
This week 17-May 17-May 17-May 17-May 17-May 17-May 17-May 17-May 17-May 17-May 17-May 18-May 18-May 18-May 18-May 18-May 20-May 19-May 19-May 20-May 20-May 20-May Beyond 23-May 24-May 27-May Issuer Amkor Technology Centene EchoStar EchoStar First Wind Capital Leap Wireless Petrohawk Energy R.R. Donnelley TFS Corp. Woodbine BakerCorp Chrysler Chrysler Longview Fibre Alpha Natural Resources JBS USA Gulf Offshore Logistics Eldorado Resorts Xerium Technologies Kindred Healthcare Flint Energy Connacher Oil and Gas Integra Telecom Forbes Energy Services Exopack AES Corp. Arch Coal Capsugel CenturyLink Ducommun Endo Pharmaceuticals Infor Global Solutions Landry's LDK Solar Level 3 Financing Norcraft Holdings NRG Energy Rural/Metro Saratoga Resources Silgan Holdings Silgan Holdings Solera Holdings SRA International Turning Stone Resort Casino Vantage Drilling Rating BB BB B+ BB+ B+ BB+ B CCC+ BBB+ Price talk 6.625% area 5.75-6% 6.625% area 7.875% area 10% area 6-6.125% 7.25% area 10-10.75% 12.25% 8.25-8.5% 7.75-8% +25 / 8Y 8.25% area

Ratings came in at B+/B3. In addition, S&P assigned a preliminary recovery rating of 1 to the notes, reecting expectations of very high (90-100%) recovery if a payment default occurs. S&P also placed the companys ratings on CreditWatch negative to reect a possible downgrade if a pending agreement is not closed between First Wind Capital and power utilities Emera and Algonquin to jointly construct, own and operate wind-energy projects in the northeast U.S. Under that agreement, announced last month, First Wind will contribute a 370 megawatt portfolio of projects, of which ve are

B+ BBBBUSD/CAD CCC+ CCC+

Amount ($ million) $400 $250 $1,000 $800 $200 $400 $600 $500 $175 $245 $240 $2,500 $2,500 $450 $1,500 $1,000 $110 $180 $240 $550 C$200 $900 $13,440 $260 $255 $225 $3,300 $3,800 $2,000 $200 $700 $560 $125

Tenor 10 6 8 10 7 9 8 7 7 5 8 8, 10 8, 10 5 5, 10 8, 10 5 8 7 8 8

Type senior senior secured senior secured senior senior senior secured secured senior secured secured secured senior senior secured secured senior senior senior

Purpose redeem notes redeem notes M&A M&A repay debt GCP repay debt redeem notes GCP LBO LBO repay debt repay debt dividend M&A repay debt repay debt repay debt repay debt M&A repay TL redeem notes repay TL redeem notes dividend recap M&A M&A LBO M&A M&A M&A M&A M&A repay debt M&A redeem notes redeem notes LBO repay debt M&A M&A M&A LBO redeem notes GCP

5 8 7

B $1,100 $1,100 $200 $150 $500 $400 $350 $415 $290 $225 $29,370

senior senior senior bridge bridge bridge bridge senior bridge bridge secured senior bridge

secured senior subordinated bridge senior 4 secured

Total

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

operational and two are near completion. First Wind will own 51% of the operating company and a joint venture between Emera and Algonquin will own the other 49% and will invest $333 million. First Wind, based in Boston, is owned by private equity rms Madison Dearborn Capital Partners and D. E. Shaw.
Jon Hemingway

in the event of a payment default. Ratings are B/B2 corporate and B/B1 on the term loan. The company intends to use the net proceeds from the notes offering and borrowings under the new term loan facility to repay all outstanding borrowings under its existing revolving credit facility, to purchase any and all of its outstanding 11.25% senior notes due 2014 that are tendered pursuant to a cash tender offer and consent solicitation also announced today, to redeem any 11.25% senior notes due 2014 not acquired in the tender offer, to make a distribution to the companys stockholders, and to pay related transaction fees and expenses.
Jon Hemingway/Chris Donnelly

Integra Telecom returns with $260M of senior notes to repay TL

Integra Telecom is back in market after 13 months with a $260 million offering under Rule 144A for life. J.P. Morgan and Morgan Stanley are joint bookrunners on the ve-year (non-call two) senior notes offering, which backs repayment of a $210 million term loan put in place last year, sources said. The ber-based CLEC will head out on a roadshow today continuing through early next week. Pricing is expected Monday, May 23, according to sources. So far the transaction netted a CCC+ rating after Standard & Poors upgraded the credit to B, with a stable outlook, from B-, reecting recent improvements in customer churn and an improved view on liquidity given that there will be no nancial maintenance covenants after the proposed renancing. S&P also assigned a 6 recovery rating to the bond deal, indicating an expectation for negligible (010%) recovery in the event of a default. Integra was in market in April 2010 with a $475 million issue of 10.75% secured notes due 2016. This paper, which priced at par but trades around 108 now, yielding about 8.3%, was upgraded today to B, from CCC+, and the recovery rating was raised from 5, to 4, indicating expectation for average (30-50%) recovery. The secured notes were the companys debut in market and were sold alongside the $210 million, ve-year term loan and $60 million RC. The combined transaction renanced a previously existing senior secured credit facility.
Matt Fuller

OneLink boosts rst-lien talk, seeks commitments tomorrow

A Citigroup-led arranger group is seeking commitments by noon EDT tomorrow on their dividend recapitalization deal for OneLink Communications after rming changes to the deal this morning, sources said. Pricing on the $345 million, six-year rst-lien term loan has been increased to L+450, with a 1.5% LIBOR oor, at 99. As before, theres a 101 one-year soft call premium on offer. Citigroup, J.P. Morgan, Credit Suisse and Morgan Stanley yesterday originally talked the rst-lien loan at L+375-400, with a 1.25% LIBOR oor and a 99.5 offer price. Revised pricing is expected to emerge shortly on the $150 million, seven-year second-lien tranche, which is being run by J.P. Morgan. For now it remains at L+650-700, with a 1.5% oor and an OID of 99, sources added. That tranche would be covered by 102, 101 call premiums in years one and two, respectively. The deal includes a $25 million, ve-year revolving credit in addition to the rst- and second-lien term loans. The nancing drew B+/B rst-lien and CCC/Caa2 second-lien ratings. The issuer is rated B/B3. The issuer, formerly known as San Juan Cable, will use the new loans to renance existing debt, including a $100 million unsecured holdco term loan, and to fund a dividend to sponsors MidOcean Partners and Crestview Capital Partners, sources said. The dividend will total $23.5 million, according to Standard & Poors. The issuer last approached the market in 2007 for the $100 million holdco loan, which was priced at L+650, at 99.5, and came with 102, 101 call premiums. The existing debt structure includes rstliens currently priced at L+200 and second-liens at L+550. OneLink Communications provides cable-television services to the greater San Juan area in Puerto Rico.
Chris Donnelly

Exopack on roadshow with $225M of bonds for dividend recap

A roadshow is underway for the bond component of the dividend recapitalization of Exopack Holdings. The $225 million offering of seven-year (non-call three) senior notes comes via Goldman Sachs and Bank of America, according to sources. Financing also includes a $75 million, ve-year asset-based revolver and a $400 million, six-year covenant-lite term loan. Bank of America Merrill Lynch and Goldman Sachs have set price talk of L+450, with a 1.5% LIBOR oor and a 99.5 issue price, for the term loan, sources said. It also includes a 101, one-year soft call premium. The bond deal is rated CCC+/Caa1, with a recovery rating from S&P of 6, which indicates expectations for negligible (0-10%) recovery

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

US Silica preps $260M TLB renancing for launch tomorrow

BNP Paribas is launching tomorrow an opportunistic renancing for US Silica that is structured as a $260 million B term loan, according to sources. Price talk has not hit the market yet. US Silica plans to use proceeds to renance mezzanine debt and to fund a distribution to the holding company, sources said. The transaction will leverage US Silica at 3.4x on an all-senior basis. US Silica was in the market a year ago via BNP with a $165 million term loan that cleared the market at L+400, with a 1.75% LIBOR oor. The paper was issued at 99.5. A portion of the proceeds were used to fund a $45 million dividend to nancial sponsor Golden Gate Capital. The 2010 term loan also renanced debt from the companys buyout, which was syndicated during challenging market conditions in late 2008. The buyout was heavily equitized and included mezzanine debt provided by Golden Gate. The 2010 renancing repaid about $10 million of mezzanine debt, leaving $75 million in place, according to sources. Leverage through the term loan ran 3.1x for the 2010 deal. Total leverage was 4.5x through the mezzanine. Current corporate issuer ratings are B+/B2. The companys capital structure includes a $35 million asset-based revolver. Berkeley Springs, W. Va.-based US Silica mines, processes and markets silica and other industrial minerals. The company, with 13 plants in 13 states, binds and processes industrial sand that is used to make glass and building products.
Kelly Thompson

Bank of America Merrill Lynch, J.P. Morgan, Goldman Sachs, Wells Fargo, Credit Suisse, Citigroup and Deutsche Bank had been seeking to line up $1.1 billion of covenant-lite term loans at L+300-325, with a LIBOR oor of 1.25-1.5% and a par offer price. Both tranches would have also included a 101, six-month soft call premium. That plan would have left in place the Sept. 1, 2016, maturity on the existing $700 million, while layering in a new $400 million, 7.5-year B-2 tranche. Proceeds were earmarked to renance existing debt, including a $500 million holdco issue, sources noted.
Chris Donnelly/Kerry Kantin

Fortescue Metals Group preps launch of $1B TL

J.P. Morgan, Bank of America Merrill Lynch, Credit Suisse, Deutsche Bank and RBS are preparing to launch on Monday, May 23, a $1 billion unsecured term loan for Fortescue Metals Group, sources said. The deal will be sold into the U.S. market, sources added. The Australian iron-ore-mining concern will use proceeds for general corporate purposes, including the expansion of is mining production. Additional details are expected to emerge shortly.
Chris Donnelly

Caesars nets A-to-E approval; gray markets emerge in extended TL

Caesars Entertainment late yesterday said it has obtained requisite lender approval for its proposed amend-to-extend transaction, but said it is still tabulating the results of the proposed extension. As reported, Caesars (formerly known as Harrahs) proposed extending the maturity of its B-1-B-3 term loans by three years, to January 2018, and offered to boost the spread on the extended debt to L+425, from L+300 currently, according to sources. In addition, the amendment allows the casino operator to convert up to $816 million of revolver commitments to extended term loans. The company is also looking to push out revolver commitments that are not converted into extended term loans by one year, to January 2015. Pricing on the extended revolver would step up to L+350, from L+300, with a 75 bps commitment fee, sources added. Revolver lenders would also see a commitment reduction of 5%. Though the amount debt extended is not yet available, a few dealers have begun making indicative markets in the extended term loan. It was recently quoted at 93/93.5, though markets vary across the Street. By comparison, the non-extended B-2 term loan (L+300) is wrapped around 94, which is in line with its recent trading range, sources said.

Toys R Us sets tight turnaround on $400M add-on TL

Bank of America Merrill Lynch, J.P. Morgan, Goldman Sachs, Wells Fargo, Credit Suisse, Citi and Deutsche Bank yesterday launched their $400 million incremental B-2 term loan renancing for Toys R Us, setting talk of L+325-350, with a LIBOR oor in the range of 1.25-1.5% and a 99.5 issue price. Commitments are due on Thursday. The seven-year term loan will be used to renance debt, sources said. The existing $700 million covenant-lite term loan is priced at L+450, with a 1.5% LIBOR oor. For reference, the existing loan was quoted at 100.25/100.75 today. Existing secured ratings are BB-/1. Toys R Us in March pulled an opportunistic renancing, citing current difcult global market conditions, according to sources.

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

Also, the amendment also allows the company to negotiate sub-par buybacks with individual lenders. Bank of America Merrill Lynch, Citigroup and J.P. Morgan arranged the amendment. Lenders were offered a 10 bps fee to approve the amendment. At year-end, the company had just over $5.8 billion outstanding under its B-1, B-2 and B-3 term loans, and $990 million under a B-4 term loan, which is not being extended and matures in October 2016. The B-4 loan, issued in late 2009, is priced at L+750, with a 2% LIBOR oor. The B-2 tranche is one of the 15 constituents of LCDs ow-name composite. The B-1, B-2 and B-3 term loans, which originally totaled $7.25 billion across the three tranches, funded in January 2008 as the buyout of gaming concern by Apollo Management and Texas Pacic Group closed. Corporate ratings are B-/Caa2.
Kerry Kantin

for the 10-year maturity, but it is countered with a rst call at par plus 75% of the coupon, versus the usual 50%. The deal backs a par-plus tender offer launched this morning for the $264.3 million outstanding of the 9.25% notes due 2016. The company will call any bonds not tendered. Excess proceeds will also be used for general corporate purposes, including the redemption of the 2.5% convertible subordinated notes due May 2011. Amkor was last in market in April 2010 with a $345 million offering of 7.375% notes due 2018 also backing existing-bond renancing efforts. Issuance was par, but the notes trade at 105.75-106 now, yielding about 6%, trade data shows. The new paper will be pari passu with the existing senior notes, which are BB/Ba3. That prole reects a one-notch upgrade last week by Standard & Poors reecting, expectation that credit ratios will remain consistent with Amkors intermediate nancial prole, although revenues and margins may decline moderately through at least the June 2011 quarter due to seasonality and the completion of an industrywide inventory correction in late 2010. Amkor, headquartered in Chandler, Ariz., provides semiconductor assembly and test services to semiconductor companies and electronics OEMs. The companys chairman and largest shareholder James J. Kim have agreed to purchase $75 million of the proposed notes as part of the offering, according to the company.
Matt Fuller/Jon Hemingway

RR Donnelley sets talk for senior notes; pricing today

Price talk is in the 7.25% area for the seven-year bullet notes from R.R. Donnelley & Sons, according to sources. That works out to roughly L+465, swap-adjusted. Books close this afternoon for the $500 million deal, and pricing will follow via Bank of America, Citi and J.P. Morgan, sources said. The commercial-printing company is back in market after 11 months to renance its 11.25% notes due 2019. The paper, which was issued amid the credit crisis in January 2009 with BBB+/Baa2 ratings, is the companys highest-coupon issue outstanding. Ratings on the new deal follow a downgrade of the credit yesterday by both agencies to BB+/Ba1, from BBB-/Baa3. The rationale includes both systemic issues with the commercial-printing industry, as well as R.R. Donnelleys plans to pursue acquisitions and share buybacks. R.R. Donnelley was last in market in June 2010 with a $400 million issue of 7.625% notes due 2020. Issuance was at par, at the tight end of talk, with BBB-/Baa3 ratings. The bullet notes, now rated BB+/ Ba1, traded late yesterday at 102.625, yielding roughly 7.2%, trade data show.
Staff reports

Petrohawk circulates guidance for senior notes; pricing today

Price talk for Petrohawk Energys $600 million offering of eightyear (non-call four) senior notes is at 6-6.125%, according to sources. That guidance swaps to a oating-rate equivalent of about L+320. Books close midafternoon and pricing follows via Wells Fargo, Barclays, BMO, BNP, Bank of America, Goldman Sachs, J.P. Morgan, and RBC. The notes are rated B+/B3, with stable outlooks on both sides. S&Ps recovery rating on the debt is 5, which indicates expectations for modest (10-30%) recovery in a payment default. The independent oil and natural-gas company will use proceeds from the deal to repay revolver borrowings and for general corporate purposes. Petrohawk was last in the market in January when it tacked on $400 million to its 7.25% notes due 2018 at 101.875, bringing the total outstanding to $1.225 billion. The issue traded late last week at 107.5, yielding 5.58%, according to MarketAxess.
Jon Hemingway

Amkor drive-by bond guidance circulates

Amkor Technologys $400 million offering of 10-year (non-call four) senior notes is being shopped to accounts around 6.625%, according to sources. Pricing is expected later in the session via Deutsche Bank and Citi. Moodys this morning assigned an issue rating of Ba3, with a stable outlook, noting that the renancing will improve the companys maturity prole. Notably, the non-call period is shorter than normal

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

Leap/Cricket plans add-on to 7.75% notes for network build-out

Leap Wireless operating subsidiary Cricket Communications is seeking to add $400 million to its 7.75% notes due 2020 via bookrunners Goldman Sachs, Morgan Stanley and Deutsche Bank, sources said. Proceeds will be used to support general corporate purposes, including build-out of its fourth-generation network. The original $1.2 billion was completed in November in an effort to pay down 2014 paper. The B-/B3 offering printed 25 bps wide of talk, at 98.3 to yield 8%, but the bonds since have traded up to a 104 context, yielding about 7%, sources said.
Matt Fuller

and a $240 million, six-year B term loan. The ticking fee for the delayed-draw term loan starts at 125 bps, sources said. Proceeds from the TLB will be used to renance existing debt, while the delayed-draw term loan, which will be available for 24 months, will fund future capex. Leverage through the funded debt at closing will run roughly 7.5x, sources said. Agencies assigned B/B2 corporate issuer ratings. The loan drew ratings of BB-/B2. Mobilitie, an Oaktree Capital Management portfolio company, acquires and builds cell towers, ber networks and distributed antennae systems. The Newport Beach, Calif.-based company has roughly 1,600 towers through the U.S. and a distributed antennae system in New York City. Wireless carrier T-Mobile USA accounts for 60% of Mobilities current revenue base. The debt currently in place dates to February 2008, when GE Capital syndicated a $425 million loan that was split between a revolver and a delayed-draw term loan.
Kelly Thompson/Kerry Kantin

Connacher Oil and Gas lines up bond deal to re existing issues

Connacher Oil and Gas is in the market with a dual-currency secured note offering to renance existing debt, according to sources. Credit Suisse is left lead on the U.S. dollar portion, while RBC is running the Canadian dollar tranche, according to sources. Tranche sizes are not yet set, but the deal is expected to total $900 million equivalent. Both the eight-year (non-call four) U.S. dollar notes and the seven-year (non-call four) Canadian dollar notes carry the standard change-of-control put at 101% of par and 35% equity clawback during the rst three years. Connacher is tendering for its $200 million issue of 11.75% rstlien notes due 2014 and $587.34 million of 10.25% second-lien notes due 2015. First-lien bondholders are offered $1,070 per note, and holders of the second-lien will receive $1,095. In both cases, the price includes a $30 consent payment for notes delivered by the early deadline of 5:00 p.m. EDT on May 23. Both deals were sold to help fund the construction of Connachers second oil-sands project, Algar. The second-lien notes were placed in the companys market debut in November 2007, while the rstliens were sold in June 2009. Connacher is based in Calgary. Its principal assets are its Great Divide Pod One and Algar SAGD oil-sands projects in northeastern Alberta.
Jon Hemingway

Rosetta Resources extends maturity, cuts pricing on $750M RC

Houston-based oil-and-gas company Rosetta Resources has amended its $750 million senior secured revolver, pushing the maturity out by four years, to 2016, and lowering the coupon, according to a regulatory ling. Additionally, Rosetta increased the size of the revolver from $600 million. Availability is tied to a borrowing base, currently set at $325 million. As of May 16, Rosetta had $30 million outstanding under the RC. Pricing now ranges from L+175-275, versus L+225-300 previously. As before, the grid is tied to utilization. BNP Paribas is administrative agent and led the amendment. Financial covenants include a minimum-xed-charge ratio of 1x and a maximum-4x-leverage test. Lenders include Wells Fargo, Union Bank, Compass Bank, Bank of Montreal, the Bank of Texas, Frost National Bank and Amegy Bank National Association. Rosetta is rated B/B2.
Richard Kellerhals

Mobilitie sets talk on $415M loan package

TD Securities today outlined price talk on the $415 million loan package that launched for Mobilitie Investments II, a builder of wireless communication towers. The deal is talked at L+375-400, with a 1.25-1.5% LIBOR oor and a 99.5 issue price, according to sources. GE Capital has joined as a joint arranger on the deal to the right of TD, sources noted. The senior secured package is structured as a $25 million, ve-year revolving credit; a $150 million, ve-year delayed-draw term loan;

Univita Health sets talk, launches $220M recap credit

Barclays Capital and Jefferies today launched their $220 million senior secured renancing for Univita Health, setting price talk of L+450475, with a 1.5 % LIBOR oor and a 99 offer price, sources said.

Standard & Poors LCD Daily Wrap-Up

May 17, 2011

Univita, a portfolio company of Genstar Capital, will tap the market for a $20 million, ve-year revolving credit and $200 million, sixyear term loan. The term loan includes a 101, one-year soft call premium. The loan will be used to repay credit facilities and mezzanine debt. Commitments are due on June 1. Univita last tapped the loan market in late 2009 for an add-on to fund an acquisition. At the same time, the company renanced its mezzanine debt with $72 million of new junior debt. The increased term loan totaled roughly $120 million and was priced at L+600, with a 2.5% LIBOR oor, sources noted. At the time, leverage was roughly 3.8x through the junior debt. Scottsdale, Ariz.-based Univita Health provides home-based care management through specialized support and in-home interventions to people with complex needs.
Chris Donnelly

The existing loan, which allocated in October 2010, consists of a $1.575 billion, rst-lien term loan; a $200 million, second-lien term loan; and a $150 million revolving credit. The existing rst-lien is priced at L+400, with a 1.5% LIBOR oor, and was issued at 99. The second-lien is priced at L+675, with a 1.5% LIBOR oor, and also was issued at 99. Proceeds from the deal were used to renance debt and provide funding for the purchase of National Processing Co. from GTCR Golder Rauner. Fifth Third Processing Solutions offers acceptance services for businesses nationwide, providing electronic funds transfer, debit, credit and merchant-transaction processing to support the complex payment strategies for the bank and its merchant and nancialinstitution clients. Corporate ratings are B+/Ba3.
Chris Donnelly/Kerry Kantin

Dunkin preps allocations on $100M add-on TL

Barclays Capital is likely to allocate tomorrow its $100 million add-on term loan for Dunkin Brands, which will clear in line with original guidance of L+300, with a 1.25% LIBOR oor and a par offer price, sources said. As noted earlier, the fast-food-restaurant chain is planning to use the proceeds from the add-on term loan, as well as proceeds raised through a proposed initial public offering, to pay off its $475 million balance of 9.625% notes due 2018 at the current, special rst-year call price of 100.5, according to an SEC ling. The add-on debt is available under the issuers incremental facility. The issuers existing term loan totals $1.4 billion. For reference, the existing loan is quoted at 100.25/100.5 today, sources said. It is also priced at L+300, with a 1.25% LIBOR oor. Dunkin recently led for an IPO of up to $400 million. As reported earlier today, Dunkin plans to list on the Nasdaq under the ticker DNKN. Timing was not identied in the S-1 ling; however, J.P. Morgan, Barclays, Morgan Stanley, Bank of America and Goldman Sachs were listed as bookrunners. Dunkin sold $625 million of the 9.625% senior notes in November as part of a dividend recapitalization. The bonds priced at 98.5, to yield 9.9%, and recent levels in the CCC+/Caa2 paper were at 101/102, sources said. The special call is available for the rst year, then it steps to 102.5. The company, which was purchased in 2006 by Bain Capital, Carlyle Group and Thomas H. Lee, used proceeds from the bond deal and coordinated loan nancing to repay in full its outstanding securitization debt and to fund a $500 million dividend to the owners, roughly half of what they initially put in, sources said. The nancing also included a $100 million, ve-year revolving credit and a $1.25 billion, seven-year term loan.

Fifth Third rms pricing, preps allocation of B-1 TL

Goldman Sachs, J.P. Morgan and Fifth Third are expected to allocate as soon as this afternoon their renancing for Fifth Third Processing Solutions. The $1.621 billion B-1 term loan will price at the tight end of its range, at L+325, with a 1.25% LIBOR oor, at par, with a 101, one-year soft call premium. The issuer will renance its rst- and second-lien debt into an allrst-lien structure, including a carve-out B-2 tranche that allows the issuer to maintain the existing second-lien loans November 2017 maturity, sources said. The deal will include two pari passu tranches, the $1.621 billion B-1 tranche, which will maintain the existing rst-lien debts November 2016 maturity, and a $150 million, B-2 tranche with the same November 2017 maturity as the existing second-lien loan. The B-2 has been put away and isnt expected to trade. Pricing on the B-2 is L+350, with a 1.5% LIBOR oor and a par offer price, also with the 101 soft call premium, sources added. In addition, the B-2 tranche will have a bullet maturity, no excess-cash-ow sweep and no mandatory debt sweep. The company is showing roughly $408 million of pro forma adjusted EBITDA, including roughly $48 million of transition and stand-alone adjustments relating to its separation last year from Fifth Third Bank. The issuer in March backed away from an all-rst-lien renancing plan amid increasingly difcult market conditions. That proposed deal was to include a $1.775 billion term loan that was talked at L+300-325, with a 1.25% LIBOR oor. It was offered at par and included a 101, one-year soft call premium, sources said.

Standard & Poors LCD Daily Wrap-Up

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The latter was upsized to $1.4 billion in February, and the spread was cut to L+300, from L+425, as part of an opportunistic renancing. The deal includes a 1.25% LIBOR oor and a one-year, 101 soft call premium. The additional $150 million of proceeds were used to call an initial chunk of the 9.625% notes. Corporate ratings are B/B3.
Staff reports

Evergreen Agricultural Enterprises, is headquartered near the notfor-prot Evergreen Aviation Museum, home of the Spruce Goose.
Chris Donnelly/Kerry Kantin

Secondary
Brigham bonds advance in post-break trading; E*Trade steady
Brigham Exploration Company late yesterday placed 6.875% notes due 2019 with accounts at par, the tight end of talk, and the CCC+/Caa1 paper changed hands at 100.625 this morning, sources said. The $300 million deal, upsized from $250 million, came via Bank of America and Credit Suisse, backing general corporate purposes. Also late yesterday, E*Trade Financial completed a $435 million issue of 6.75% notes due 2016 via sole bookrunner J.P. Morgan. The B-/B2 paper is essentially steady to par issuance this morning, pegged at 100/100.5, sources said. E*Trade returned to market in an effort to pay down 7.375% notes due 2013. The transaction marks the issuers rst regular-way execution since late 2005, although it did complete a par-for-par debt swap in mid-2009 amid the credit crisis in an effort to extend maturities. Broad market conditions are soft today as accounts stare down a near-$12 billion new-issue pipeline. The unfunded HY CDX 16 index slipped one quarter of a point, to a 102.5 context, according to Markit.
Matt Fuller

FTD Group launches loan renancing

Price talk is L+325-350, with a 1.25% LIBOR oor and a 99.5 offer price, on Wells Fargos renancing for FTD Group, sources said. The new nancing will include a $50 million, ve-year revolver and a $265 million, seven-year B term loan. The new TLB includes a 101, one-year soft call premium. The issuer is looking to cut pricing from the current L+450, with a 3% LIBOR oor. The existing deal, also led by Wells, was put in place in 2008. Commitments are due on June 1. FTD markets oral services and products.
Chris Donnelly

Evergreen International Aviation readies 1st-lien renancing

Evergreen International Aviation is re-approaching the market for a renancing with a call tomorrow at 1:00 p.m. EDT via Goldman Sachs, according to sources. Rather than seek an all-rst-lien transaction as the issuer did early in the year, the new effort has already locked in the second-lien component. Existing investors have already approved a 4.25-year extension of the issuers second-lien term loan, to September 2015, in line with current terms, L+1,200, with 3% LIBOR oor plus an additional pay-in-kind component. Following a $5 million paydown, the tranche will total $105 million. With the second-lien taken care of , Evergreen will now shop a $225 million, four-year term loan. The loan will include 5% annual amortization and will carry 103, 102, and 101 call premiums during years 1-3, respectively. Price talk will be announced on the call. The revised transaction reects market feedback that investors offered as the company attempted to renance with a $320 million, six-year term loan last year, sources said. Leverage will now be 1.9x through the rst-lien debt. Evergreen is also seeking to raise a $10 million, four-year RC, which wont be funded at closing. Evergreen International Aviation is a portfolio of ve diverse aviation companies. The company is headquartered in McMinnville, Ore., with international operating authority and a network of global ofces and afliates. The company, which also owns and operates

Star West TL allocates, inches up on break

The $650 million term loan for Star West Generation edged up to 99.625/100.125 after breaking for trading this morning at 99.5/100, versus issuance at 99.5, sources said. Pricing on the seven-year loan rmed at L+450, with a 1.5% LIBOR oor, and includes 102, 101 call premiums. At issuance, the yield to maturity is 6.23%, which tightens to 6.18% using the midpoint of the bid/ask on the break. As reported, Barclays Capital, RBC Capital Markets and Citigroup boosted pricing on the deal from original guidance of L+375-400, with a 1.5% LIBOR oor and a 99.5 offer price, with a 101 one-year soft call premium. The nancing, which also includes a $100 million, ve-year revolving credit, drew B+/Ba3 ratings. As noted previously, proceeds from the deal back Highstar Capitals planned acquisition of two power-generation plants from LS Power. Highstar announced on March 29 that it agreed to acquire 100% of the equity interests in the Arlington Valley and Grifth powergeneration plants, located in Arizona.

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The deal will also be nanced with $300 million of equity capital, comprised of $250 million from Highstar and roughly $50 million of third-party nancing provided to Star Wests indirect parent, according to Moodys. The planned acquisition of the two plants would be Highstars third major power-generation investment. Previous investments have included a 50% interest in InterGen, a global power-generation business with operations in the U.K., the Netherlands, Mexico and Australia; and a 50% interest in Northern Star Generation, a U.S. power-generation business with operations in six states. The Arlington and Grifth acquisitions are intended to serve as the basis for building the rms third power-generation business, Highstar said.
Kerry Kantin/Chris Donnelly

The Merit Groups customer base consists of more than 10,000 independent, regional and national paint-store chains, as well as bigbox retailers, hardware stores, lumber yards, home centers, drywall yards and auto trim shop distributors, the company said. Revenue in 2010 was roughly $200 million. The company said it has about 1,160 creditors, excluding its current and former employees. The Merit Group is represented by the McNair Law Firm, with restructuring help from Alvarez & Marsal and investment bank Morgan Joseph TriArtisan.
John Bringardner

DirectBuy notes dive on grim April results, rejected settlement

DirectBuy 12% second-lien notes dropped 10 points this morning, to 34/36, after the company privately released to investors further proof of its membership erosion. The April metrics were posted on IntraLinks last night, only hours after a federal court rejected a settlement in a class-action suit against the discount consumer club. The latest drop in the $335 million issue follows last Thursdays 6-7 point slide, to the high 40s, after the objections were rst faced in the courtroom of U.S. District Judge Janet C. Hall in Connecticut. Yesterday, Hall sided with the 37 state attorneys general who objected to $55 million in free memberships for the class-action plaintiffs. When the attorneys general rst opposed the settlement in mid-April, the notes plunged as much as 14 points, to 61/63. According to media reports, Hall called the settlement too meager, suggesting the plaintiffs claims have merit and that the plaintiffs might be able to settle for more than $2 billion. DirectBuy allegedly raised prices in exchange for kickbacks from manufacturers. DirectBuy last night revealed that the number of new memberships sold in April decreased 24.9% year over year, while the number of renewals decreased 12.3% during the same period, according to sources familiar with private data. In mid-April, DirectBuy warned that membership growth plunged 23% year over year and that it had hired an interim CEO. The notes immediately plunged more than ve points, to 56/58. The April data released last night also revealed that the number of franchise clubs decreased to 132, from 134 the previous month, and total members decreased to 400,474, from 403,631. Finally, the number of purchase orders decreased 8.6% year over year, and merchandise dollar volume decreased 14.6%. Investors are concerned that the company has been unable to stop the membership bleed. Most of the companys cash ow depends on signing new members, and it has little in the way of hard assets. In March, the second-lien notes plunged from the low 90s to 72 on disappointing scal-second-quarter results. The B/B2 paper was

Bids due Friday on $274.4M loan BWIC

Bids are due at noon EDT on Friday, May 20, on a portfolio of loans totaling roughly $274.4 million, according to sources. The BWIC contains 231 tranches of debt. It consists mostly of institutional loans, with a handful of CLO tranches, as well as a few revolvers. Positions generally range from less than $1 million to just under $3 million. The portfolio includes liquid issues such as the Allison Transmission term loan, the Charter Communications extended TLC and the Univision Communications extended term loan, as well as some smaller, less liquid loans, such as the Gleason rst-lien term loan and the Totes Isotoner rst-lien term loan. Including Fridays BWIC, the year-to-date volume of loans put up for sale via BWICs is roughly $1.56 billion, versus $965 million in the same period of last year, according to LCD News.
Kerry Kantin

Distressed
Merit Group les for Ch. 11, citing $100M in total debt
Spartanburg, S.C.-based Merit Group, a national supplier of paint sundries, led for Chapter 11 this morning in the U.S. Bankruptcy Court in Columbia, S.C., listing about $100 million in total debt. The company blamed its ling on liquidity issues brought on by greater-than-anticipated costs related to its acquisition of Five Star Products in January 2010. The consolidation of warehouses and integration of the organizations cost more than expected, putting substantial stress on the companys liquidity, Merit said. The cash shortage meant Merit couldnt purchase goods at normal levels, and the lower inventory levels led to declining sales, further exacerbating its liquidity issues. Merit estimated its current assets at less than $10 million, court lings show.

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sold at 97 in January via J.P. Morgan in an effort to pay down a term loan and subordinated notes held with private investors, sources said.
Beth Campbell

While Catalysts $375 million issue of 11% secured notes due 2016 were steady today, at 92/94, they are down six points from their 98/99 context on Wednesday evening, according to sources. Many distressed investors said they see Catalyst Paper as the next restructuring target, and have been playing off the volatility in the paper caused by news events. Just three weeks ago, the unsecured notes fell four points, to a 70 context, when the Canadian newsprint and paper company announced its own disappointing rst-quarter results. Last November the companys third-quarter performance beat Street estimates, and the bonds rallied. As reported, the secured notes rose ve points, to a 94 context, while the unsecured paper was up 10 points, in the high 60s. Today, the news of AbitibiBowater rst-quarter net income coming in short of market estimates due to higher energy and ber costs, as well as s strong Canadian dollar caused the Catalyst unsecured notes to slip. The Montreal-based company reported rst-quarter net income of $30 million, or $0.31 per share, on sales of $1.2 billion, versus a net loss of $500 million, or $8.68 per diluted share, on sales of $1.1 billion in the year-ago period. Analysts said they were expecting $0.41 per share. Abitibi exited Chapter 11 in December, shedding $7 billion in debt.

FairPoint TL sinks as co. says it will miss 2011 revenue guidance

The $1 billion term loan for FairPoint Communications fell more than three points this morning, to 92/92.5, on the heels of a lackluster rst-quarter earnings report stating the company would miss its 2011 revenue guidance, sources said. The second-lien, veyear TL (L+450, 2% LIBOR oor) closed yesterday at 95.25/95.75. Revenue in the rst quarter was $254.8 million, versus $270.8 million in the year-ago period. Several investors said they were expecting the company to exceed last years rst-quarter revenue. Although the company said it was encouraged by the essentially at revenue, it stated the full-year 2011 revenue guidance of $1.061.09 billion is unlikely to be achieved and it does not intend to provide new revenue guidance. However, the company continues to believe that it can achieve the low end of its consolidated EBITDAR guidance of $260-280 million through cost-reduction initiatives, many of which are already underway, and revenue growth, according to company statement. While net income in the rst quarter was $562.5 million, versus a net loss of $86.3 million last year, the 2011 results beneted from a one-time pre-tax gain of $911.3 million related to the companys reorganization in Chapter 11, which included $1.35 billion of cancelled debt. FairPoint emerged from Chapter 11 on Jan. 24. Under the plan, FairPoints pre-petition lenders were to receive a pro rata share of the new $1 billion term loan, a pro rata share of roughly 47.28 million shares in the reorganized company (comprising 92% of the equity to be issued under the plan) and cash to the extent the companys cash exceeds $40 million, less certain reserves. The plan values the distribution on account of lender claims at 87.9%. Charlotte-based FairPoint is a communications provider of highspeed Internet access, local and long-distance phone, television and other broadband services to customers in 18 states. Beth Campbell/Kerry Kantin Catalyst Paper debt continues slide in sympathy with Abitibi results Unsecured bonds backing Catalyst Paper fell another point today, to 59/61, in sympathy with AbitibiBowaters rst-quarter profits falling short of expectations, sources said. The 7.375% notes due March 2014 began falling from a 66/68 context, amid NewPage releasing its lackluster rst-quarter results on Thursday morning.

Beth Campbell

Power play (continued from page 1)

a 101, one-year soft call premium. The issuer is looking to cut pricing from the current L+450, with a 3% LIBOR oor. The existing deal, also led by Wells, was put in place in 2008. Commitments are due on June 1. BNP Paribas tomorrow is launching an opportunistic renancing for US Silica that is structured as a $260 million B term loan. Price talk has not hit the market yet. US Silica plans to use proceeds to renance mezzanine debt and to fund a distribution to the holding company, sources say. The transaction will leverage US Silica at 3.4x on an all-senior basis. Current corporate issuer ratings are B+/B2. Elsewhere today, accounts pushed for changes on the dividend recap for OneLink Communications and won. Pricing on the $345 million, six-year rst-lien term loan has been increased to L+450, with a 1.5% LIBOR oor and a 99 offer price. As before, theres a 101 one-year soft call premium on offer. Citigroup, J.P. Morgan, Credit Suisse and Morgan Stanley originally talked the rst-lien loan at L+375-400, with a 1.25% LIBOR oor and a 99.5 offer price. Revised pricing is expected to emerge shortly on the $150 million, seven-year second-lien tranche, which is being run

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by J.P. Morgan. For now it remains at L+650-700, with a 1.5% oor and an OID of 99, sources add. That tranche would be covered by 102, 101 call premiums in years one and two, respectively.

Secondary
The heavy supply in the primary market has put a bit of pressure on the secondary, which continued to drift lower in thin trading. With yields more compelling in the primary market, theres a lack of focus on the secondary, traders say. Longer-dated par-plus names are coming under pressure. The Dunkin Brands term loan (L+300, 1.25% LIBOR oor) cooled an eighth of a point, to 100.25/100.5, as did the Reynolds Group TLE (L+325, 1% LIBOR oor), to 100.125/100.5. Some high-beta names are also softer: TXUs non-extended term loan (L+350) had slid to 86.625/87, down nearly a point over the past few sessions. In the synthetic market, LCDX 16 dipped about three sixteenths, to either side of par, as stocks spent another day in the red, weighed down by disappointing results from Hewlett-Packard and disappointing manufacturing data. Losses in FairPoint Communications term debt (L+450, 2% oor) outpaced the overall market on the back of the companys rst-quarter results, which sent the companys shares down more than 38%. By late in the session, the paper had plummeted roughly 5.5 points from yesterday, to 89.25/89.75. Revenue in the rst quarter was $254.8 million, versus $270.8 million in the year-ago period. Although the company said it was encouraged by the essentially at revenue, it stated that full-year 2011 revenue guidance of $1.06-1.09 billion is unlikely to be achieved, and it does not intend to provide new revenue guidance. Amid the lackluster tone, the $650 million M&A term loan for Star West Generation was bid in line with its 99.5 OID on the break, versus a par offer, though it quickly inched up to 99.625/100.125. The seven-year loan is priced at L+450, with a 1.5% LIBOR oor. It includes 102, 101 call premiums. The $1.621 billion B-1 for Fifth Third Processing Solutions was also expected to break late this afternoon, but was not yet trading at press time. The performance of recent issues is something of a mixed bag. The KAR Auction Services TLB (L+375, 1.25% oor) rose to 100.625/100.875, from 99.5 at offer yesterday, but the Neiman Marcus term loan (L+350, 1.25% oor) slid to a 99.5 bid, from 99.75 last week at issuance. The recently allocated US Foodservice term loan (L+425, 1.5% oor) has cooled to 98.625/99.125, from a 99 OID. A few dealers began making indicative markets in Caesars Entertainments extended term loan. It was quoted at

93/93.5 earlier today, though the size of the tranche is not yet available. It will mature in January 2018 and will be priced at L+425. The non-extended term loan due 2015 (L+300) remained wrapped around 94. The company disclosed in an 8-K late yesterday that it won requisite lender approval for its proposed amend-to-extend. A $274.4 million BWIC began circulating in the loan market today, for which bids are due Friday. The BWIC contains 231 tranches of debt. It consists mostly of institutional loans, with a handful of CLO tranches, as well as a few revolvers. The portfolio includes liquid issues, such as the Allison Transmission term loan, Charter Communications extended TLC and Univision Communications extended term loan, as well as positions in some smaller, less-liquid loans, such as the Gleason rst-lien term loan and the Totes Isotoner rst-lien.

High-yield
Another busy day in the primary market saw new names added to the calendar, while price talk emerged for several others. With these deals, this weeks volume is creeping toward the $14 billion mark. A big chunk of that comes from Chrysler, particularly after an upsizing. Talk emerged for the deal today as a rumored shift of funding in the deal materialized, with $1 billion moving from the loan to the bonds, leaving totals at $2.5 billion and $3.5 billion, respectively. Talk for the eight-year (non-call four) notes is 7.75-8%, while the 10-year (non-call ve) notes are guided 25 bps higher, or roughly 8-8.25%. Joint physical bookrunners Bank of America and Goldman Sachs, alongside bookrunners Citi and Morgan Stanley, intend to take nal orders through mid-morning Thursday. Meanwhile, terms were expected this afternoon for many other deals. Among them is Centenes $250 million issue of six-year bullet notes, which was talked at 5.75-6% via Barclays, Bank of America and Wells Fargo. Echostars eight-year and 10year bullet notes were guided in the 6.625% area and 7.875% area, respectively, and terms were expected this afternoon via Deutsche Bank. Deals already priced include First Wind Capitals $200 million issue of seven-year (non-call three) secured notes, at 10.25%, which was wide of talk by 12.5 bps. Credit Suisse, Deutsche Bank, Goldman Sachs and RBS were the leads. Meanwhile, the Longview Fibre deal priced at the tight end of talk with a $30 million upsizing, to $480 million. The 8% secured notes due 2016 priced at 99.5, to yield 8.125%, via Bank of America and CIBC. Connacher Oil and Gas is on the road this week with a dual-currency offering of secured notes to renance existing

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issues. Credit Suisse and RBC are joint bookrunners on the deal, with the former left lead on the eight-year (non-call four) U.S.-dollar portion and the latter leading the seven-year (noncall four) Canadian-dollar tranche. Sizes are not yet set, but the deal is expected to total $900 million. Cricket Communications was looking to tack on another $400 million to its 7.75% notes due 2020 via bookrunners Goldman Sachs, Morgan Stanley and Deutsche Bank. Proceeds will be used to support general corporate purposes, including build-out of its fourth-generation network. The original $1.2 billion was completed in November and recently traded up to a 104 context, yielding about 7%. R.R. Donnelleys $500 million issue of seven-year bullet notes launched this afternoon in the 7.25% area via Bank of America, Citi and J.P. Morgan. Ratings on the new deal follow one-notch downgrades yesterday by both agencies, to BB+/ Ba1. The commercial-printing company is back in market after 11 months to renance its 11.25% notes due 2019. Petrohawk Energy unveiled a $600 million drive-by offering of eight-year (non-call four) senior notes this morning. Talk for the deal is 6-6.125%, and pricing comes through Wells Fargo, Barclays, BMO, BNP, Bank of America, Goldman Sachs, J.P. Morgan and RBC. Proceeds from the B+/B3 notes will be used to repay RC borrowings. In another intraday print, Amkor Technology is shopping $400 million of 10-year (non-call four) senior notes around 6.625% via Deutsche Bank and Citi. Ratings are BB/Ba3. The deal backs a par-plus tender offer for $264.3 million of outstanding 9.25% notes due 2016. Excess proceeds will also be used for general corporate purposes, including the redemption of the 2.5% convertible subordinated notes due May 2011. Flint Energy Services kicked off a roadshow today for an offering of senior notes denominated in Canadian dollars. The eight-year (non-call four) notes will total C$200 million. Bookrunners are Credit Suisse and BMO Capital Markets. Proceeds will be used to repay term loans.

Yesterdays issues saw mixed performance. E*Trade Financial 6.75% bullet notes due 2016 held around par issuance, while Brigham Exploration 6.875% notes due 2019 traded at 100.625 on the break, from par at offer. Leap Wireless subsidiary Cricket is reopening its 7.75% notes due 2020 today. The existing paper was pegged at 104 before the news, only to change hands as low as 100.75 this afternoon, according to trade data. The $400 million add-on would boost the issue to $1.6 billion. DirectBuy 12% second-lien notes dropped 10 points this morning, to 34/36, after the company privately released to investors further proof of its membership erosion. The April metrics were posted on IntraLinks last night, only hours after a federal court rejected a settlement in a class-action suit against the discount consumer club. The settlement would provide membership coupons rather than cash, and the rejection leaves the door open to much more speculation and uncertainty about the fate of the discount consumer club. The B/B2 paper was issued at 97 in January via J.P. Morgan to pay down private loans with Allied Capital and other hedge funds, sources say. Unsecured bonds backing Catalyst Paper fell another point today, to 59/61, after AbitibiBowaters rst-quarter prots fell short of expectations, sources say. The 7.375% notes due March 2014 started slipping from 66/68 last week after NewPage released lackluster rst-quarter results. Catalyst 11% secured notes due 2016 were steady today, at 92/94, but down from 98/99 last week, sources say. NewPage paper continues to be volatile. NewPages secondlien notes the most in question under recovery analysis have fared the worst and remain the most heavily traded. The 10% and L+625 notes, both due next year, continue to trade in a 40 context. Levels were in the mid-40s going out last week and the mid-50s prior to last weeks report of relatively at rst-quarter results and news that Robert Nardelli resigned from the board of directors. Its unclear where the rumored controlling stakeholders Apollo and Avenue Capital amassed their positions, but they have certainly been offered an opportunity to dollar-cost average in recent days, and there is clear support for the second-lien notes just below 40. Lower in the capital structure is the $200 million issue of 12% subordinated notes due 2013, which are stuck around 10, versus trades at 22 before the news last week. Meanwhile, at the top of the capital structure, the $1.77 billion issue of 11.375% rst-lien notes due 2014 was quoted at 96.25/96.75 after trading at a new low of 95 today and markets at 100/101 before the rst-quarter results were released. Staff reports

High-yield secondary
The monstrous forward calendar is commanding attention and is nally starting to weigh on the broader market. Indeed, soft market conditions set in yesterday, and a heavy tone was afoot today. Some of the more volatile credits traded lower, with Caesars/Harrahs 10% second-lien exchange notes due 2018 at 93.5, versus 95 yesterday. And even par-area benchmarks were under pressure, with Charter 6.5% notes due 2021 changing hands at 98.938, versus 99.25 yesterday, according to trade data.

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