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January 26, 2012

High Yield

One-Pagers

January 26, 2012 High Yield One-Pagers Credit Research A reference book for high yield investors This

Credit Research

A reference book for high yield investors

This reference guide contains single-page summaries for many of the companies in the high yield universe and serves as a companion to our Investment Grade One-Pager publication. In addition to credits covered by the Goldman Sachs credit research team, we also include summary pages for some uncovered companies that we view as benchmark high yield names.

We hope you find this book to be a useful tool. Please contact the sector analysts for additional information.

 

Contributing analysts

Erin Blum

Jason Kim

Gregory Chwatko

Raymond M. Leung

Kevin Coyne

Amanda R. Lynam, CPA

Karen Eltrich

Kristen McDuffy

Justine Fisher

Joshua Pinkerton

Jason Gilbert

Joseph Stivaletti

Brian Jacoby, CFA

Scott Wipperman, CFA

Franklin Jarman

Jacoby, CFA Scott Wipperman, CFA Franklin Jarman Global Investment Research (212) 902-1000 Erin Blum (212)

Global Investment Research (212) 902-1000

Erin Blum (212) 855-7718 erin.blum@gs.com Goldman, Sachs & Co.

Gregory J. Chwatko (212) 902-0673 gregory.chwatko@gs.com Goldman, Sachs & Co.

Kevin Coyne (212) 357-9918 kevin.coyne@gs.com Goldman, Sachs & Co.

The Goldman Sachs Group, Inc.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html. This research discusses Rule 144a securities, which generally are available only to Qualified Institutional Buyers.

Global Investment Research

January 26, 2012

This Page Intentionally Left Blank

High Yield

January 26, 2012

Table of contents

High Yield

Company

Page

Company

Page

Accellent (ACCINC)

5

Del Monte Foods (DLM) Delta Air Lines Inc. (DAL) Denbury Resources (DNR) Dillard's Inc. (DDS) DineEquity, Inc. (DIN) DISH Network Corporation (DISH) Dole Foods (DOL) DR Horton Inc. (DHI) Dynegy Holdings inc. (DYN) Edison Mission Energy (EIX) El Paso Corp. (EP) Elan Corporation (ELN) Emergency Medical Services (EMS) Endo Pharmaceuticals (ENDP) Energy XXI (EXXI) Exopack Holding Corp. (EXOPAC) Felcor Lodging Inc. (FCH) First Data Corp. (FDC) Ford Motor Company (F) Forest Oil (FST) Fortescue Metals Group Ltd (FMGAU) Freescale Semiconductor, Inc. (FSL) Frontier Communications (FTR) Gannett Company Inc. (GCI) Gaylord Entertainment Company (GET) GenOn Energy Corp. (GEN) Goodyear Tire (GT) Graphic Packaging Corporation (GPK) Great Canadian Gaming Corp. (GRTCAN) Greektown Superholdings (GREEK) Gymboree Corp. (GYMB) Hanesbrands Inc. (HBI) HCA, Inc. (HCA) Health Management Associates, Inc. (HMA) HealthSouth (HLS) Hornbeck Offshore Services (HOS) Host Hotels & Resorts Inc. (HST) Huntsman Corp. (HUN) IASIS Healthcare (IAS) IMS Health (RX) Isle of Capri Casinos (ISLE) iStar Financial (SFI) J. Crew Group Inc. (JCG) J.C. Penney Co. Inc. (JCP) Jarden Corp. (JAH) JDA Software Group Inc. (JDAS) JetBlue Airways Corp. (JBLU) KB Home (KBH) Kindred Healthcare (KND) Koppers Inc. (KOP)

55

Advanced Micro Systems, Inc (AMD) AES Corporation (AES) Aircastle Ltd. (AYR) Alcatel-Lucent (ALU) Alere Inc. (ALR) American Achievement (AMEACH) American Axle (AXL) Amerigroup Corp. (AGP)

6

56

7

57

8

58

9

59

10

60

11

61

12

62

13

63

Ameristar Casinos

Inc. (ASCA)

14

64

Amkor Technology (AMKR) Apria Healthcare Group Inc. (AHG) Ashland Inc. (ASH) Avis Budget Group (CAR) AWAS Aviation Capital (AWAS) Ball Corporation (BLL) Basic Energy Services (BAS) Bausch + Lomb Inc. (BOL) Beazer Homes USA Inc. (BZH) Berry Petroleum (BRY) Berry Plastics (BERRY) Bombardier Inc. (BBDBCN) Bon-Ton Department Stores (BONT) Boyd Gaming Corp. (BYD) Bristow Group (BRS) Brookstone (BRSTNE) Brunswick Corporation (BC) Burger King Holdings, Inc. (BK) Burlington Coat Factory (BCFACT) Cablevision Systems Corporation (CVC) Caesars Ent. Operating Company (HET) Calpine Corp. (CPN) Cascades Inc. (CASCN) Catalent Pharma Solutions (PTSAC) Catalyst Paper Corporation (CTLCN)

15

65

16

66

17

67

18

68

19

69

20

70

21

71

22

72

23

73

24

74

25

75

26

76

27

77

28

78

29

79

30

80

31

81

32

82

33

83

34

84

35

85

36

86

37

87

38

88

39

89

CF Industries (CF) Charter Communications Inc. (CCMM) Chesapeake Energy (CHK) Chiquita Brands (CQB) Chrysler Group LLC (CHRYGR) CityCenter Holdings (CCTRH) Clearwire Communications LLC (CLWR) CMS Energy Corporation (CMS) Community Health Systems (CYH) Constellation Brands (STZ) Convatec Healthcare (CONVAT) Cooper Tire (CTBUS) Crown Holdings, Inc. (CCK) DaVita, Inc (DVA) Dean Foods (DF)

40

90

41

91

42

92

43

93

44

94

45

95

46

96

47

97

48

98

49

99

50

100

51

101

52

102

53

103

54

104

January 26, 2012

High Yield

Company

Page

Company

Page

L-3 Communications (LLL)

105

Rock-Tenn Company (RKT) Royal Caribbean Cruises Ltd. (RCL) Ryland Group Inc., The (RYL) Saks Inc (SKS) Sally Holdings LLC (SBH) Sanmina-SCI Corp. (SANM) Scientific Games International, Inc. (SGMS) Seagate Technology (STX) Sealy Mattress Co. (ZZ) Sirius XM Radio Inc. (SIRI) Sitel LLC (SITEL) Smithfield Foods (SFD) Solo Cup (SOLOC) Southwest Airlines Co. (LUV) Southwestern Energy (SWN) Sprint Nextel Corporation (S) Standard Pacific Corp. (SPF) Steel Dynamics (STLD) Stone Energy Corp (SGY) Stream Global Services (SGS) Sunoco Inc. (SUN) Surgical Care Affiliates LLC (SCAFF) Swift Energy Co. (SFY) Telesat Canada (TELSAT) Tenet Healthcare Corporation (THC) Tenneco Inc. (TEN) Tesoro Corp. (TSO) Textron Inc. (TXT) Toll Brothers Inc. (TOL) TPC Group Inc. (TPCG) TRW Automotive (TRW) U.S. Steel (X) Unisys (UIS) United Continental Holdings, Inc. (UAL) United Surgical Partners Intl (USPI) Universal Health Services (UHS) US Airways Group, Inc. (LCC) Valeant Pharmaceuticals (VRX) Vanguard Health (VHS) Venoco Inc. (VQ) Viasystems, Inc. (VIAS) Videotron Ltd (QBRCN) Visant Corp. (VISANT) VWR Funding (VWRINT) W&T Offshore (WTI) Warner Chilcott (WCRX) Whiting Petroleum Corp. (WLL) Windstream Corp. (WIN) Wynn Las Vegas (WYNN) Yankee Candle Co., The (YCC)

158

Las Vegas Sands Corp. (LVS)

108

159

Leap

Wireless International, Inc. (LEAP)

107

160

Lennar Corp. (LEN) Levi Strauss & Co. (LEVI) Liberty Interactive Corp. (LINTA/QVC) Lifepoint Hospitals Inc. (LPNT)

108

161

109

162

110

163

111

164

Limited Brands Inc. (LTD) Liz Claiborne (LIZ) Louisiana-Pacific Corp. (LPX)

112

165

113

166

114

167

Marina District & Finance Co., Inc. (BORGAT) McClatchy Co., The (MNI) McMoRan Exploration (MMR)

115

168

116

169

117

170

MDC

Holdings Inc. (MDC)

118

171

Mediacom Communications Corporation (MCCC) MediMedia USA, Inc. (MEDIME)

119

172

120

173

Meritor (MTOR)

121

174

MetroPCS Communications, Inc. (PCS) MGM Resorts International (MGM) Michaels Stores (MIK) Millar Western Forest Products (MILLAR) Mohegan Tribal Gaming Authority (TRIBAL) Momentive Performance (MOMENT) Momentive Specialty Chemicals (HXN)

122

175

123

176

124

177

125

178

126

179

127

180

128

181

MTR

Gaming Group, Inc. (MNTG)

129

182

Mylan Inc. (MYL) Neenah Paper (NP) Neiman Marcus Group, The (NMG)

130

183

131

184

132

185

New York Times Co., The (NYT) Newfield Exploration (NFX)

133

186

134

187

Nova

Chemicals (NCX)

135

188

NRG

Energy (NRG)

136

189

NXP

B.V. (NXPBV)

137

190

Olin Corporation (OLN) Omnicare Inc.(OCR) Owens-Illinois, Inc. (OI) Parker Drilling Company (PKD) Peabody Energy (BTU) Pilgrim's Pride Corp. (PPC) Pinnacle Entertainment (PNK) Pioneer Natural Resources (PXD) Plains Exploration & Production (PXP) Plastipak Holdings, Inc. (PLASPK) PolyOne (POL) PulteGroup Inc. (PHM) PVH Corp. (PVH) Quicksilver Resources (KWK) Quiksilver, Inc. (ZQK) R.R. Donnelley & Sons Co. (RRD) RadioShack Corp. (RSH) Range Resources (RRC) Reynolds Group Holdings Limited Rite Aid Corp. (RAD)

138

191

139

192

140

193

141

194

142

195

143

196

144

197

145

198

146

199

147

200

148

201

149

202

150

203

151

204

152

205

153

206

154

207

155

156

157

Note that the source of all data in this report is Goldman Sachs, Goldman Sachs Credit Research, or company data.

January 26, 2012

High Yield

Accellent (ACCINC)

Updated 01/25/12

Erin Blum

Cindy Guan

212-855-7718

212-902-9758

Contact analyst or see latest research for updates to ratings, estimates, and other information.

IN-LINE (on secureds and subs)

We rate both the Accellent secureds and subs In-Line. While the bonds are among the widest in our coverage, we see this as only fair value because: (1) leverage is also among the highest of the group and especially when considered against the low EV/EBITDA multiples of the public competitors; (2) LTM FCF remains weak; and (3) we see ACCINC’s business as riskier because the company is a contract manufacturer and therefore has less control over its order flow and pipeline.

Bond Summary

   
 

Size

Coupon

 

Agency

 

Next Call

Bid

YTW

STW

(MM)

(%)

Priority

Maturity

Ratings

Price

Date

Price

(%)

bp

 

$400

8.375

Sr. Sec.

1-Feb-17

B1/B+

$106.281

2/1/2013

$100.500

8.226%

790

$315

10.000

Sub. Nts

01-Nov-17

Caa2/CCC+

$107.500

11/1/2013

$81.500

14.887%

1,409

 

Company Description

 

Investment Strengths:

 
 

-

Sales force and plant expansion. Following ACCINC's sales force

 

Accellent is a contract manufacturer in the medical device industry with a focus in cardiology, orthopedics and endoscopy. Cardiology is the company’s strongest segment, with orthopedics its weakest segment in terms of performance and company expertise. The company has 14 manufacturing facilities in the United States and 3 in Europe, and it recently completed the addition of a facility in Malaysia. ACCINC expects shipping to begin early 2012 from this facility.

ACCINC does business with the major OEMs such as Boston Scientific, Johnson & Johnson, and Medtronic. MDT and JNJ each accounted for more than 10% of sales in 2010. ACCINC also books pass-through sales of platinum at little or no margin (revenue is included in the cardiology segment).

realignment, we have seen an upward revision of new business wins. The company is also staffing and equipping its Malaysian facility that will not only facilitate expansion into Asia, but also provide low-cost manufacturing.

Resilient end-market demand. Device end-market growth, while slowed, has remained in the positive low-single-digit territory.

-

-

Increased regulatory scrutiny. We think the increased cost of audits and

ACCINC has been proactive in managing its maturity profile with the $400 mn secured offering in January 2010 to refinance its 2012 term loans and a $315 mn sub offering in October 2010 to refinance its 2013 subordinate notes.

pricing pressure from hospitals could lead OEMs to consolidate vendors in favor of larger manufacturers such as ACCINC in order to reduce cost and time to production.

Investment Risks:

 

Key Dates/Catalysts:

 

-

High leverage. ACCINC is highly levered at mid 6x, a level that has not

- Quarterly earnings. It will be important to see cost discipline at ACCINC to drive EBITDA growth.

 

improved much since the time of its 2005 LBO. Public comps trade in the 6-8x range.

- Commentary on industry inventory from OEMs and Accellent's competitors (GreatBatch and Symmetry). Recent

comments from competitors suggest that the industry inventory picture is weakening.

   
   

-

-

Shipping from the Malaysia plant to begin in early 2012.

Strong and concentrated customer group. Risk of insourcing could reduce revenues for ACCINC, as was the case with BSX in 2006 (a revenue hit totaling $40 mn).

 

Weak historical growth. ACCINC's top line has posted only a 0.9% CAGR since 2005.

-

Financial Profile

 

2009A

2010A

2011E

 

4Q10A

3Q11A

4Q11E

Revenue

 

$479

$507

$541

 

$132

$133

$135

EBITDA

109

108

102

28

24

25

Interest Expense, net

 

$57

$74

$68

$19

$17

$16

Cash Taxes

4

4

6

1

2

2

CapEx

 

16

26

33

9

8

8

Free Cash Flow

 

39

9

(23)

 

6

2

(5)

Total Debt

 

$687

$715

$715

$715

$715

$715

 

Cash & marketable securities

34

41

18

41

23

17

Net Debt

 

653

674

697

 

674

692

698

   

Agency

Key Credit Statistics

   

LTM Comps

Leverage

Coverage

Ratings

Total Debt/EBITDA

 

6.3x

6.6x

7.0x

Accellent (ACCINC) sub

6.8x

1.5x

Caa2/CCC+

Net Debt/EBITDA

6.0x

6.2x

6.8x

Accellent (ACCINC) sec

3.7x

1.4x

B1/B+

 

Catalent (PTSAC)

6.7x

1.8x

Caa1/B

EBITDA/Interest

 

1.9x

1.5x

1.5x

 

1.5x

1.4x

1.5x

DJO Global (DJO)

6.4x

1.6x

Caa1/CCC+

EBITDA margin

22.7%

21.4%

18.9%

21.2%

18.1%

18.7%

 

Capitalization

   
 

Debt to

 

Debt to

     
 

LTM

2011E

Description

 

Amount

EBITDA

 

EBITDA

Liquidity

ABL Revolver 1/29/2015

 

$0

ABL Revolver Size

$75

8.375% Snr Sec. Nts 2/1/2017

 

$400

Borrowing Base

$49

Total Sr Sec debt

 

400

3.8x

3.7x

Letters of Credit

11

 

Borrowings

0

10% Sub Nts 11/1/2017

 

$315

Revolver Availability

39

Total Sub debt

315

6.8x

7.0x

 
 

Cash & marketable securities

$23

Other

 

$0

Total Liquidity

$61

Total Debt

 

$715

6.8x

7.0x

 

Market Cap

NA

Enterprise Value

NA

Maturities:

 
 

800

 

700

     

600

500

400

300

200

100

0

2012

2013

2014

2015+

January 26, 2012

High Yield

Advanced Micro Devices, Inc. (AMD)

Updated 1/26/2012

Franklin Jarman

212-902-7537

Karl Blunden

212-357-2769

Investment Strengths:

 

Low capital intensity enhances cash flow profile: The Asset Lite plan completed in 2009 divested AMD’s foundry business to production partner Abu Dhabi. The

-

deal significantly reduced AMD's capital intensity and raised just over $700 million of cash.

-

Solid liquidity position provides capital structure

improvement opportunities: AMD ended 2Q2011 with over $1.8 billion of cash on hand, but needs significantly less to operate effectively. AMD has navigated through a challenging 2011 product launch year; in the event the macroeconomic volatility that surfaced in 2H2011 subsides, we believe it may consider deploying excess cash to reduce gross leverage.

Investment Risks:

 

-

Tablet growth could consume future PC demand: We

estimate the lost opportunity could reach $50-100 million

in annual EBITDA over 2011/2012, which is still manageable in our view.

-

Weak competitive position: Intel dominates the MPU

market, with approximately an 83% market share.

-

New leadership: After its CEO resigned in 2010, AMD

was only able to hire a new CEO in August 2011. AMD's Products Group General Manager left the firm in September 2011, at which point the new CEO assumed

the role of Interim General Manager of the Products Group, a large responsibility given his recent move to AMD.

-

Manufacturing issues: AMD has experienced

continuing manufacturing issues on new chip launches, most recently related to lower-than-expected yield from its foundry partner, GlobalFoundries, which was partly responsible for the company's 3Q2011 miss relative to

initial guidance.

Comps

Leverage

Coverage

Sr. Unsec

 

Ratings

ALU

3.2x

4.5x

WR/B

AMKR

2.3x

6.6x

Ba3/BB

FSL

5.8x

2.0x

Caa1/CCC+

NXP

3.3x

3.7x

Caa1/B

SANM

3.6x

3.6x

B1/B

Contact analyst or see latest research for updates to ratings, estimates, and other information.

OUTPERFORM

Bond Summary

 

Size

Coupon

Agency

Next Call

Bid

YTW

STW

(MM)

(%)

Priority

Maturity

Ratings

Price

Date

Price

(%)

bp

$500

8.125

Senior

15-Dec-17

Ba3/B+

104.06

12/15/2013

107.88

5.7%

542

Company Description

AMD is a global manufacturer of complex semiconductors including microprocessors (MPUs) found in desktops, notebooks, and servers as well as graphics chipsets. The MPU market is essentially a duopoly, composed of two leading vendors: Intel Corp. and AMD. Intel is the dominant player and controls approximately 83% share, while AMD is a distant second at 10% share. In order to improve its product offering and competitive positioning, AMD acquired ATI Technologies, a supplier of graphics processing chips, for $5.4 billion in 2006. In 2011, the company began to leverage its core MPU/GPU capabilities by selling a new chip family named the Fusion, which combines the MPU and GPU on to a single die. Separately, the company has benefited from its relationship with the state of Abu-Dhabi, which currently owns 15% of the AMD's equity and recently purchased AMD's foundry business as well. Abu-Dhabi-owned GlobalFoundries is currently AMD's most important foundry partner.

Key Dates/Catalysts:

- AMD's annual analyst day is scheduled for February 2

Financial Profile

 

FY08

 

FY09

 

FY10

LTM-3Q11

 

FY11E

FY12E

Revenue

5,792

 

5,403

 

6,494

6,526

 

6,602

6,993

EBITDA

582

492

963

880

866

848

Interest Expense

 

(366)

(438)

(199)

(176)

(179)

(148)

Cash Taxes

(11)

(11)

(12)

(12)

(12)

(12)

CapEx

(622)

(466)

(148)

(185)

(212)

(250)

Free Cash Flow

 

(1,085)

 

(1,046)

 

(560)

(203)

 

133

178

Total Debt

5,074

4,560

2,421

2,060

2,060

1,575

Cash

1,096

2,676

1,789

1,807

1,892

1,585

Net Debt

3,978

1,884

632

253

168

(10)

Key Credit Statistics

 

Total Debt/EBITDA

 

8.7 x

 

9.3 x

 

2.5 x

2.3 x

 

2.4 x

1.9 x

Net Debt/EBITDA

6.8 x

3.8 x

0.7 x

0.3 x

0.2 x

0.0 x

EBITDA/Interest

1.6 x

1.1 x

4.8 x

5.0 x

4.8 x

5.7 x

EBITDA margin

 

10.0%

9.1%

14.8%

13.5%

13.1%

12.1%

FY11E Capitalization

 
 

Debt to

   

Description

Size

 

EBITDA

Liquidity

 

5.75% Sr. Conv. due 2012

 

485

 

2.3 x

Revolver Size

 

0

8.125% Sr. Notes due 2017

500

2.3 x

Borrow Base

 

0

6.00% Sr. Conv. due 2015

630

2.3 x

- Amt Drawn

0

7.75% Sr. Notes due 2020

500

2.3 x

- LC's

0

Other

(55)

2.3 x

Amt Unutilized

 

0

Total Debt - Product Co.

2,060

 

2.3 x

Cash

1,807

Market Cap

4,781

 

Liquidity

 

1,807

Enterprise Value

 

5,034

 

5.7 x

 

Maturities:

700.0

 

600.0

     

500.0

400.0

             

300.0

200.0

100.0

0.0

2012

2013

2014

2015

2016

2017

2018

2019

2020

 

January 26, 2012

High Yield

AES

Corporation (AES)

 

Updated 1/25/2012

 

Raymond M. Leung

212-357-5764

 

Contact analyst or see latest research for updates to ratings, estimates, and other information.

Abayomi A. Adigun

212-902-9355

IN-LINE

 

Bond Summary

   

Size

 

Coupon

 

Agency

 

Next Call

Bid

YTW

STW

(MM)

(%)

Priority

Maturity

Ratings

 

Price

Date

Price

(%)

bp

$1,000

 

7.375

Sr Unsec'd

1-Jul-21

Ba3/BB-

MW+50

--

108.750

6.14

414

 

Company Description

   

Investment Strengths:

 

AES is a global power holding company with subsidiaries and investments located in North America, Latin America, Europe, Africa, and Asia (including the Middle East). Latin America was the largest contributor of 2010 subsidiary distributions at 37%. North America accounted for 26% of 2010 distributions, while Europe (17%) and Asia (8%) and other made up the balance. AES is engaged in both regulated electric utility and unregulated generation. AES has generation interests in nearly 30 countries, with about 40GW of generation capacity and distribution networks that serve over 11 million people. China Investment Corp. has a 15% equity stake in the company. In November 2011, AES completed the acquisition of DPL Inc., which will be a wholly owned subsidiary of AES and is expected to contribute $200-300 million in annual distributions.

-

Consistent and diverse subsidiary distributions, with

distributions budgeted at $1.2-1.3 billion for 2011. Distributions have been above $1 billion annually over the

past three years, with the top 10 accounting for about 70%, with between 75% and 80% from regulated or contracted assets.

-

Fairly robust development pipeline of projects that could

provide incremental up-streamed distributions beginning

 

2014/2015.

 

Key Dates/Catalysts:

 

-

Diverse infrastructure investments, with North America

-

Late-February, AES is expected to report 4Q2011 earnings. AES expects 2011 subsidiary distributions to parent

accounting for 26% of distributions in 2010.

 

of $1.2-1.3 bn. For 2012, AES previously indicated $1.4-$1.5 bn of distributions. We expect an update on the status of the company's $500 million share repurchase plan ($378 mn to date) and its targeted $100 mn cost

-

Management has been proactive in extending debt

maturities and reducing debt, resulting in a manageable debt

savings.

 

maturity profile and favorable leverage position.

 

-

3Q2012, AES's plan to initiate an annual common dividend of $120 mn.

 

-

As of 9/30/2011, parent liquidity remains strong given the

-We also expect management to provide a general business update including the closing of its acquisition of DPL,

pre-funding of the DPL acquisition at $2.9 bn, which includes $2.1 bn of cash. Investment Risks:

any pending asset sales and capital allocation plans given its aforementioned dividend plans.

 

-

Potential rationalization of non-core assets and investment in new development projects.

 

-

A challenging global economic outlook, with exposure to

 

AES

AES

AES

 

AES

DPL

DPL**

emerging markets.

       

-

Regulatory and legal regimes in many of the countries in

Financial Profile*

 

FY10

FY11E

FY12E

LTM3Q11

FY2010

LTM3Q11

which AES operates are not fully developed, subjecting the

   

Revenue*

 

1,022

NA

NA

NA

1,883

1,921

company to a relatively high degree of regulatory uncertainty.

EBITDA*

804

NA

NA

NA

644

544

-

Potential defaults at projects could affect distributions to the

Subsidiary Distributions

 

1,255

 

1,250

1,500

 

1,298

 

parent.

 

-

-

-

Future development program might accelerate the need for

Interest Expense - Parent

(464)

(417)

(468)

(363)

(72)

(156)

capital funding and might push leverage higher.

 

Cash Taxes

 

0

-

-

-

(143)

(105)

- Lack of transparency owing to the complex capital structure.

Investment in Subs (Net) / Capex

(519)

(2,980)

(400)

 

(928)

(153)

(180)

- AES plans to initiate a dividend in 2012, and continued

share repurchases highlight a shift to return capital to

Free Cash Flow

 

(274)

(2,597)

232

NA

49

(72)

shareholders that should prove to be negative for spreads.

Total Debt - Parent

5,515

6,192

6,181

6,192

1,182

2,453

Cash - Parent level

677

 

285

 

326

2,089

124

68

 
 

Net Debt

 

4,838

5,907

5,855

4,103

1,058

2,385

 

Key Credit Statistics

   

Total Debt/Sub Dist

 

4.4

5.0

4.1

 

4.8

-

-

     

Agency

Net Debt/Sub Dist

3.9

4.7

3.9

3.2

-

-

Comps

Leverage

Coverage

Ratings

Total debt to EBITDA

 

-

-

-

-

1.8

4.5

 

AES Corp*

4.1x

3.6x

Ba3/BB-

EBITDA Interest coverage

 

-

-

-

-

8.9

3.5

Calpine Corp

6.7x

2.0x

B1/BB-

Sub Dist/Interest

 

2.7

3.0

3.2

 

3.6

NA

NA

Dynegy

10.2x

1.1x

–/D

EBITDA margin

NA

NA

NA

NA

34%

28%

Edison Mission

8.5x

1.4x

Caa1/B-

*condensed financial information - includes parent revenues, equity in earnings, interest income

 

GenOn

7.8x

1.1x

B3/B

** Debt proforma for $1.25bn of notes of Dolphin Subsidiary II notes and $87.25 mm of annualized interest.

 

CMS

4.7x

3.7x

Ba1/BB+

Capitalization - Proforma for recent debt issuance

   

NRG

4.7x

2.4x

B1/BB-

 

Debt to

 

Description

 

Size

SubDist

 

*AES reflects sub distributions to parent obligations; LTM4Q2011

 

AES Corp Secured Revolver

 

-

 

AES Corp Term Loan

 

1,050

   

Liquidity

 

Total Secured and 2nd Lien Debt

 

1,050

0.7x

 

Parent Level Liquidity

AES Corp 8.875% due 2011

 

-

 

Revolver Size (Sec'd)

800

AES Corp 8.375% due 2011 ()

 

-

 

Letters of Credit drawn

(12)

AES Corp 7.75% due 2014

 

500

Borrowings

-

AES Corp 7.75% due 2015

500

 

Revolver Availability

788

AES Corp 9.75% due 2016

535

   

AES Corp 8% due 2017

 

1,500

Parent cash

2,089

AES Corp 8% due 2020

625

 

Total Liquidity

2,877

AES Corp 7.375% due 2021

 

1,000

   

Other debt

 

(34)

Total Secured and Unsecured Debt

 

5,676

3.8x

AES Corp Trust Preferred III

 

516

Total Recourse Debt

 

6,192

4.1x

 

Non-Recourse Subsidiary Debt

 

14,686

Total Consolidated Debt

 

20,878

 

Minority Interest

 

3,926

Market Cap

 

10,063

 

EV ex minority interest and non-recourse debt

 

16,255

 

10.8x

Parent Maturities

 

Maturities - Parent level only, including trust preferreds

 

600

 

500

         

400

300

200

100

-

2012

2013

2014

2015

January 26, 2012

High Yield

Aircastle Ltd. (AYR) Updated 1/24/2012 Joshua Pinkerton 212-357-9774 Contact analyst or see latest research for
Aircastle Ltd. (AYR)
Updated 1/24/2012
Joshua Pinkerton
212-357-9774
Contact analyst or see latest research for updates to ratings, estimates, and other information.
Justine Fisher
212-357-6711
IN-LINE
Bond Summary
Size
Coupon
Agency
Next Call
Bid
YTW
STW
(MM)
(%)
Priority
Maturity
Ratings
Price
Date
Price
(%)
bp
$300
9.750
Sr. Notes
1-Aug-18
Ba3/BB+
104.88
1-Aug-14
110.63
6.88%
657
Company Description
Investment Strengths:
Aircastle is a top-10 aircraft leasing company, with approximately 129 aircraft with a book value exceeding $3.7
billion. Aircastle is one of the few public stand-alone leasing companies, and it is the only one with unsecured
bonds. Fortress Investment Group founded Aircastle in 2004 and is now a significant minority owner of its equity.
Aircastle has developed a niche as a leading lessor in the freighter aircraft market. Freight aircraft generally have
longer lives, allowing Aircastle to operate with a somewhat higher
average fleet age than its peers.
Strength in freighter market: Aircastle is a leader in
the niche market for freighter aircraft. Its fleet is
approximately 29% freighters.
-
-
Orderbook: Aircastle's orderbook of A330s is fully
financed and leased. The addition of these aircraft
should provide predictable growth over the next year.
-
Manageable near-term maturities: Aircastle's near
Key Dates/Catalysts:
term maturities are primarily amortization payments on
secured debt, which it should be able to meet with
cash on hand and cash from operations.
Aircastle is expected to report earnings on or around March 9.
Investment Risks:
-
Relatively small size: Aircastle has a book value of
$3.7 billion, about one-tenth the size of the market
leaders
-
Securitizations: Aircastle has three low-cost
(Thousands of dollars)
securitizations that will go into "turbo mode" and
redirect all cash flows to debt repayment beginning in
2011-2013. This could reduce cash flow to the
Financial Profile
FY10
2Q11
3Q11
4Q11E
FY11E
FY12E
company or force Aircastle to refinance at a higher
rate.
Revenue
527,710
148,838
141,507
148,904
597,163
587,543
EBITDA
481,936
137,260
129,307
136,904
548,854
539,234
Interest Expense
178,262
55,893
48,872
52,231
202,615
204,627
Income Taxes
6,596
1,535
1,237
1,555
7,596
7,596
CapEx
(609,672)
(125,989)
(233,331)
(260,000)
(766,360)
(60,345)
Free Cash Flow
(228,606)
(30,482)
(148,425)
(159,575)
(421,318)
315,566
Total Debt
2,782,958
2,797,632
2,782,958
3,060,229
3,060,229
2,924,680
Comps
Leverage
Coverage
Ratings
Cash
239,957
184,017
239,957
275,043
275,043
411,705
Net Debt
2,543,001
2,613,615
2,543,001
2,785,186
2,785,186
2,512,975
AYR
5.6x
2.7x
Ba3/BB+
Key Credit Statistics
AWAS
6.4x
2.5x
Ba3/BB
EBITDA/Interest
2.7 x
2.5 x
2.6 x
2.6 x
2.7 x
2.6 x
EBITDA margin
91.3%
92.2%
91.4%
91.9%
91.9%
91.8%
Capitalization
Debt to
Description
Size
EBITDAR
Liquidity
ACST 2006
396,000.0
Revolver Size
50,000
ACST 2007
917,000.0
Letters of Credit
0
Term Financing No. 1
607,000.0
Borrowings
0
ECA Term Financings
545,729.0
Revolver Availability
50,000
A330 PDP Facility
17,000.0
Unsecured notes
297,000.0
Total debt
2,782,958.0
5.1 x
Market Cap
1,005,115.4
Enterprise Value
3,548,116.4
6.5 x
Cash
239,957
Total Liquidity
289,957
Maturities:
1,000
900
800
700
600
500
400
300
200
100
0
2012
2013
2014
2015
Thereafter
January 26, 2012 High Yield Alcatel-Lucent (ALUFP) Updated 1/26/2012 Franklin Jarman 212-902-7537 Contact analyst or
January 26, 2012
High Yield
Alcatel-Lucent (ALUFP)
Updated 1/26/2012
Franklin Jarman
212-902-7537
Contact analyst or see latest research for updates to ratings, estimates, and other information.
Karl Blunden
212-357-2769
OUTPERFORM / IN-LINE
Bond Summary
Size
Coupon
Agency
Next Call
Bid
YTW
STW
(MM)
(%)
Priority
Maturity
Ratings
Price
Date
Price
(%)
bp
€500
8.500
Senior
15-Jan-16
B2/B
NC
NC
91.62
11.5%
1,112
$1,360
6.450
Senior
15-Mar-29
WR/B
NC
NC
77.75
9.0%
709
Company Description
Investment Strengths:
-
Adequate liquidity totaling over €5.1 billion, including
Alcatel-Lucent is a manufacturer of telecommunications equipment and a provider of telecommunication services. It provides products and services that enable
voice, data, and video communications. Areas of focus include fixed, mobile, and converged broadband networking and IP technology. The company categorizes
its business into three main segments: Networks (IP, Optics, Wireless and Wireline), Applications (Network Applications, Enterprise Applications), and Services.
ALU's top 10 customers accounted for 43% of revenues in 2010, with AT&T and Verizon each accounting for 11%. The company competes with a broad number
of competitors including Cisco, Ericsson, Huawei, ZTE, and Nokia Siemens Networks.
The company was formed through the merger of Alcatel S.A. and Lucent Technologies in 2006.
€3.7 billion of cash on hand and €1.4 billion of revolver
availability. The announced sale of the Genesys
business could add about €1bn more.
-
Improving free cash flow (but still negative): ALU is
guiding to flat full year 2011 free cash flow after €600-
800 million annual outflows in 2008-2010. We think
ALU could fall short of this target but that FCF will still
Key Dates/Catalysts:
improve significantly from previous years.
- Alcatel-Lucent is expected to report 4Q2011 earnings on February 10.
-
Well positioned for the 4G rollout: ALU has signed
several major 4G network contracts (including AT&T
and Verizon) which could represent approximately 30%
of this new market opportunity.
-
Leading provider of IP-based network infrastructure
solutions: Voice/data networks will continue to migrate
toward an all-IP network infrastructure to manage
accelerating traffic growth.
Investment Risks:
Financial Profile (EUR)
FY08A
2009A
2010A
LTM-3Q2011
2011E
2012E
-
Pension: While its US pension plan is over-funded by
Revenue
€16,984
€15,157
€15,996
€16,302
€16,149
€16,026
YoY Change
-4.5%
-10.8%
5.5%
--
1.0%
-0.8%
€2.7 billion, the projected benefit obligation (PBO)
ended 2010 at €21 billion. We expect the funded
status to deteriorate to reflect lower interest rates and
challenging asset returns in 2011.
Adj. EBITDA
1,320
684
1,040
1,398
1,378
1,366
-
Alcatel generates 10% of revenues from legacy
Cash Interest
(349)
(244)
(305)
(312)
(352)
(376)
wireline network products. Carriers are reducing
spending on wireline networks, as wireless applications
Cash Taxes
(123)
(89)
(117)
(53)
(80)
(105)
continue to gain market share.
Working Capital
(131)
471
10
(459)
(584)
81
-
Legacy CDMA and GSM infrastructure solutions still
Other (Pension/Restructuring
(510)
(827)
(754)
(617)
(599)
(490)
Operating Cash Flow
207
(5)
(126)
(43)
(236)
476
account for a sizable portion of wireless revenues.
While AT&T and Verizon increased legacy network
spending over the past 12 months to better manage
CapEx
(901)
(691)
(692)
(637)
(628)
(721)
FCF (excl. Dividends)
(694)
(696)
(818)
(680)
(865)
(245)
smartphone traffic, we expect 2012 to bring more
traditional headwinds.
-
Volatile free cash flow: Alcatel-Lucent typically
Total Debt
5,095
4,755
5,378
4,498
4,498
4,498
generates negative free cash flow during the first three
quarters of the year, reflecting seasonal working capital
Cash
4,593
5,570
5,689
3,757
4,891
4,646
needs.
Net Debt
502
(815)
(311)
741
(393)
(148)
Total Debt/EBITDA
3.9 x
7.0 x
5.2 x
3.2 x
3.3 x
3.3 x
Net Debt/EBITDA
0.4 x
-1.2 x
-0.3 x
0.5 x
-0.3 x
-0.1 x
EBITDA/Interest
3.8 x
2.8 x
3.4 x
4.5 x
3.9 x
3.6 x
EBITDA margin
7.8%
4.5%
6.5%
8.6%
8.5%
8.5%
LTM Capitalization (EUR)
Revenues by
Liquidity
Description
Size
Multiple
Region
FY2010
Summary
3Q2011
EUR 1.4 bn Revolving Credit Facility due 2012/201
0
2.8 x
North America
36%
Revolver Size
1,400
Alcatel-Lucent 6.375% notes due 2014*
462
2.8 x
Europe
32%
Borrow Base
1,400
Alcatel-Lucent 5.0% converts due 2015
1,000
2.8 x
Asia Pacific
18%
- Amt Drawn
0
Alcatel-Lucent 8.5% senior notes due 2016
500
2.8 x
ROW
14%
- Unavailable
0
Alcatel-Lucent FRNs due 2012-2016
150
2.8 x
Amt Unutilized
1,400
Alcatel-Lucent USA 2.875% converts due 2023
72
2.8 x
Cash
3,757
Alcatel-Lucent USA 2.875% converts due 2025
680
2.8 x
Liquidity
5,157
Alcatel-Lucent USA 6.5% notes due 2028
200
2.8 x
Alcatel-Lucent USA 6.45% notes due 2029
906
2.8 x
Segment
Pension
Total senior debt outstanding
3,970
2.8 x
Revenues
FY2010
Funding
YE2010
Alcatel-Lucent USA 7.75% sub. prefs due 2017
716
3.4 x
Networks
62.1%
Region
US
Euro
Total debt outstanding (Face)
4,686
3.4 x
- IP
10.0%
FV of Assets
23,721
3,281
Equity component of converts
(500)
--
- Optics
16.5%
PBO
(21,008)
(3,712)
Other financial debt
312
--
- Wireless
26.8%
Funded Status
2,713
(431)
Reported Gross Debt
4,498
3.2 x
- Wireline
9.0%
Cash & Equivalents
3,757
--
Software/Svcs/Soluti
27.4%
OPEB
Net Debt
741
0.5 x
Enterprise
7.3%
Funding
YE2010
Market cap
3,256
--
Other
3.2%
Region
US
Euro
Enterprise value
3,997
2.9 x
FV of Assets
536
--
PBO
(3,334)
--
Funded Status
(2,798)
--
Maturities:
ALU (USD) 5 Yr CDS Performance:
1,600
2,000
1,400
1,200
1,500
1,000
1,000
800
600
500
400
200
-
0
2012
2013
2014
2015
2016
2017
Thereafter
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12

January 26, 2012

Alere Inc. (ALR)

Updated 01/25/12

Erin Blum

212-855-7718

Cindy Guan

212-902-9758

Contact analyst or see latest research for updates to ratings, estimates, and other information.

UNDERPERFORM on the seniors and the subs

We rate both the ALR seniors and subs Underperform. We see the terms of the June 2011 credit agreement as signaling a deteriorating credit profile going forward, which we think is not reflected in current spreads. The term loan has no total leverage limit and a 4.5x secured limit. We also see weak near-term new product pipeline ($50 mn for 2011 and $150 mn for 2012 of revenue according to management).

High Yield

Bond Summary Size Coupon Agency Next Call Bid YTW STW (MM) (%) Priority Maturity Ratings
Bond Summary
Size
Coupon
Agency
Next Call
Bid
YTW
STW
(MM)
(%)
Priority
Maturity
Ratings
Price
Date
Price
(%)
bp
$250
7.875
Sr Nts
01-Feb-16
B2/B-
$103.938
2/1/2013
$103.250
6.663%
634
$400
8.625
Sr Sub Nts
01-Oct-18
B3/B-
$104.313
10/1/2014
$102.750
7.904%
711
Investment Strengths:
Company Description
-
Strong LT market growth characteristics: Professional diagnostics
Alere Inc. (ALR) develops near-patient diagnosis and monitoring tools, and operates a health management business.
ALR's products and services focus on cardiology, women's health, infectious disease, oncology, and drugs of abuse.
ALR's business can be divided into three segments: professional diagnostics (67% of revenues), health management
(28%), consumer diagnostics (4%). Alere has grown its businesses by leveraging a strong intellectual property portfolio
(by acquiring distribution networks to expand its geographic reach) and making product acquisitions. Formerly known
as Inverness Medical Innovations, the company announced on July 15, 2010, that it had changed its name to Alere Inc.
market growth rate is around 8%.
-
Strong technology platform that is a barrier to entry: ALR has a
large installed base (e.g., 63% for Triage in ERs), which is important
for building physicians' confidence in ALR's products.
-
Significant free cash flow: 5% LTM.
In June 2011, ALR amended its bond indentures to allow $200 mn of share repurchase and paid up to a maximum of
2.625% consent fee. ALR also refinanced its credit agreement to finance the repurchase, increased the revolver by
$100 mn. In July 2011, ALR announced it had approached Axis Shield (ASD) with a take-over offering. ASD initially
rejected the offer. ALR eventually closed the ASD acquisition on November 1, 2011 for approximately $364 mn and
used a $200 mn DD term loan as well as revolver borrowing to finance it. In December 2011, ALR issued a $250 mn
Investment Risks:
add-on to its term loan. The proceeds were used to fund the acquisition of a US-based pain management business and
Arriva.
-
Acquisitive in an "expensive" sector: Growth opportunities are in
buying specialized point-of-care companies that are typically privately
owned.
Key Dates/Catalysts:
-
Quarterly results: Organic growth has recently lagged expectations and the health management business has been
-
Ability to add debt: The June 2011 credit agreement offers the
hurt in recent quarters by reduced employer spending on benefits.
company substantial room to increase leverage. The company only
- Uptake of new product launches CD4 and Heart Check.
has a 4.5x secured leverage limit and no total leverage limit.
- Uptake of a new drug to replace Warfarin (Boehringer Ingelheim's Dabigatran). ALR's blood test used to monitor
Warfarin dosing contributes about 6% of sales.
-
Potential acquisitions, which could increase leverage.
Financial Profile
2009A
2010A
2011E
4Q10A
3Q11A
4Q11E
Revenue
$1,986
$2,155
$2,346
$578
$586
$610
EBITDA
525
565
566
147
147
148
Interest paid
$105
$120
$156
$30
$38
$46
Taxes paid
15
(30)
64
(29)
43
2
Capex
101
96
120
28
27
25
Free Cash Flow
187
179
171
18
37
43
Total Debt
$2,147
$2,395
$3,337
$2,395
$3,064
$3,337
Cash
493
401
344
401
277
344
Net Debt
1,655
1,994
2,993
1,994
2,787
2,993
Key Credit Statistics
Agency
Total Debt/EBITDA
4.1x
4.2x
5.9x
Comps
Leverage
Coverage
Ratings
Net Debt/EBITDA
3.2x
3.5x
5.3x
Alere (ALR) Snr
3.8x
NA
B2/B-
Alere (ALR) Sub
5.0x
3.4x
B3/B-
EBITDA/Interest
5.0x
4.7x
3.6x
4.9x
3.9x
3.2x
Valeant Pharma (VRX)
4.3x
4.6x
B1/BB-
EBITDA margin
26.4%
26.2%
24.1%
25.5%
25.1%
24.2%
Warner Chilcott (WCRX)
2.7x
5.8x
B3/B+
Capitalization
Debt to
Debt to
PF LTM
2011E
Description
Size
EBITDA**
EBITDA**
Liquidity
Revolving Credit Facility
$25
Revolver Size
250
TLA due 6/15/2016
$625
Letters of Credit
4
TLB due 6/15/2017*
$1,173
Borrowings
25
DD TL due 6/30/2016 (incremental A)
$300
Revolver Availability
221
Total bank debt
2,122.7
3.4x
3.8x
A/R facility
0
7.875% senior notes due Feb 2016
$245
Borrowings
0
Total sr bonds
$245
3.8x
4.2x
Availability
0
9% Subordinated Notes due May 2016
$391
Cash
$277
8.625% subordinated notes due 2018
$400
Total Liquidity
497
Total sub bonds
$791
5.0x
5.6x
Other
$28
3% Sr Sub Convert Notes due 2016 (not gty)
$150
Total Debt
$3,337
5.3x
5.9x
Market Cap
2,022
Enterprise Value
$5,082
8.1x
9.0x
*Includes a $250mn add-on that was put in post quarter end.
**LTM is PF for recent acquisitions, 2011E is not.
Maturities:
3500
3000
2500
2000
1500
1000
500
0
2012
2013
2014
2015+

January 26, 2012

High Yield

American Achievement (AMEACH)

Updated: 1/23/12

Kevin Coyne

212-357-9918

 

Celeste Everett

212-902-4751

Contact analyst or see latest research for updates to ratings, estimates, and other information. OUTPERFORM: On a relative basis, we think the AMEACH senior secured notes are cheap relative to Visant Corp. seniors owing to the low dollar price, additional security, tighter covenant package for one turn of additional leverage, and better ratings.

Bond Summary

 

Size

Coupon

Agency

Next Call

Bid

YTW

STW

Z-Spd

(MM)

(%)

Priority

Maturity

Ratings

Price

Date

Price

(%)

bp

bp

365

10.875

Sr Sec Nts

15-Apr-16

B3/B

105.438

15-Oct-13

74.500

20.12

1,944

1,931

 

Company Description

   

Investment Strengths:

 

American Achievement Corporation (AMEACH) is a school affinity products company with operations in three segments: Yearbooks (37% of FY2010 revenue), Class Rings (38% FY2010 revenue), and Graduation (14% of FY2010 revenue) & Other Products. The Yearbooks segment includes memory books, calendars, and automated yearbook design software; Class Rings includes both high school and college markets; and Graduation & Other includes diplomas, letter jackets, and a non-scholastic jewelry business selling commemorative, military, and other customized jewelry. AMEACH was formed in 2000 as a holding company that combined the operations of Balfour (brand for all its on-campus product lines), and ArtCarved. A sale of the company to competitor Herff Jones was announced in May 2008 but was ultimately terminated by mutual agreement in December of that year due to resistance from the FTC on anticompetitive grounds.

#1 provider of college class rings (55% market share) and #2 in high school class rings (30% market share of on-campus and retail).

-

-

One of the largest yearbook providers (10%

market share).

 

Strong brand recognition post the consolidation under Balfour, a brand that dates back to 1914.

-

Diversified distribution channels with retail presence in Wal-Mart, K-Mart, JC Penny, and Zales.

-

-

Developing innovative products to complement

Key Dates/Catalysts:

 

its product offerings and drive sales: personalized pages created via internet, Bal4.tv that uses customized media through a secure video delivery service and QR codes printed in yearbooks. -Gross margins have improved 170 bp to 56.2% in FY2010 through rationalization of excess production capacity, investments in improved technology, and outsourcing.

- August 2011: Steve Parr assumed the position of President and CEO, while former CEO Alyce Alston departed to pursue other opportunities. - FY2012 guidance: EBITDA expected to be flat to slightly higher, and FCF expected to be $1-3 mn. Ring segment revenue expected to be down (on % basis) "in the high single digits" year-over- year.

Fiscal year ended August 31

 

-

Strong covenant package: RP basket subject to

Financial Profile

 

3QFY11A

4QFY11A

 

FY11A

1QFY12A

2QFY12E

FY12E

 

2.0x fixed coverage ratio, with a carveout for a small general basket of $5 mn

Revenue

 

144.2

45.8

 

284.2

 

42.9

47.2

271.6

- No near-term maturities. - Secured by substantially all the assets.

 

EBITDA

50.6

1.6

57.6

1.8

3.1

57.2

     

Investment Risks:

 

Interest Expense

   

10.9

10.9

 

38.8

 

11.0

10.2

41.7

-

According to AMEACH, each 10% increase in

Cash Taxes

 

11.5

(10.8)

 

(9.3)

(4.8)

(4.7)

(3.4)

gold prices results in $2.5 mn of increase in cost of

CapEx

2.5

2.1

9.4

2.1

2.5

9.6

goods sold. The company does not hedge gold and relies on passing along the costs through higher prices.

Free Cash Flow

   

25.8

(0.5)

 

18.6

 

(6.5)

(5.0)

9.3

       

-

Operational weakness in FY2010 partially

 

Total Debt Cash Key Credit Statistics Total Debt/EBITDA Net Debt/EBITDA

 

386.3

387.0

 

387.0

 

400.0

390.0

390.0

attributed to canceled sale to Herff Jones.

     

- Minimal free cash flow.

 
 

1.2

4.8

 

4.8

 

7.1

2.6

3.1

- Uncertain exit strategy: does not lend itself to an

IPO in our view due to small scale of the business; anti-trust obstacles to a strategic acquisition (Herff Jones).

6.6x

6.7x

6.7x

6.9x

6.8x

6.8x

6.6x

6.6x

6.6x

6.8x

6.8x

6.8x

EBITDA/Interest

 

4.7x

0.1x

1.5x

0.2x

0.3x

1.4x

 

Comps

Leverage Coverage

Ratings

       

AMEACH

6.9x

1.5x

B3/B

EBITDA margin

   

35.1%

3.5%

 

20.3%

 

4.2%

6.7%

21.1%

VISANT

6.2x

2.8x

Caa1/B-

 

MGM (srs)

9.2x

1.7x

B3/B-

Capitalization

   
 

Debt to

     

Description

 

1QFY12A

 

EBITDA

Liquidity

1QFY12A

Revolver due Oct 2015 ($55 mn) Total Secured Debt

 

35.0

Revolver Size (a) Letters of Credit Borrowings Revolver Availability

54.8

35.0

0.6x

 

1.7

10.875% sr secured nts due Apr 16 Total Debt

 

365.0

35.0

400.0

6.9x

18.1

 

A/R facility

NA

Borrowings

NA

Maturities:

 

A/R Availability

 

NA

500

 

Cash

7.1

 

25.1

400

     

Total Liquidity

300

 

200

(a) Bond indenture permits revolver to increase to $75 mn.

100

0

2012

2013

2014

2015

2016+

 

January 26, 2012

High Yield

American Axle (AXL)

 

Updated 1/26/2012

 

Franklin Jarman

212-902-7537

Contact analyst or see latest research for updates to ratings, estimates, and other information.

 

Karl Blunden

212-357-2769

IN-LINE

Bond Summary

 

Size

Coupon

Agency

Next Call

Bid

YTW

STW

(MM)

(%)

Priority

Maturity

Ratings

Price

Date

Price