Icahn, Cincinnati Bell, Beazer price; drive-bys dominate $2 billion day; Rural/Metro out

By Paul Deckelman and Paul A. Harris

New York, Nov. 8 - A slew of new deals priced on Monday, high-yield syndicate sources said, with most of them being opportunistically timed, quick-to-market deals seeking to take advantage of favorable new-issue conditions - and several of those took the form of add-ons to existing bond issues.

Some $2 billion came to market in a hectic session.

Icahn Enterprises LP had the biggest deal of the day, a quickly shopped $500 million two-part add-on to the New York-based holding company's existing $2 billion of six-year and eight-year bonds.

Norwalk, Conn.-based marketing company Affinion Group Inc. drove by late in the session with a $475 million offering of eight-year paper.

Familiar junk market names Cincinnati Bell Inc. and Beazer Homes USA Inc. each swooped down on the market with rapidly appearing deals. Atlanta-based homebuilder Beazer's priced an upsized $250 million issue of nine-year notes, while Ohio-based telecommer Cincinnati Bell did a $275 million add-on to its tranche of 10-year bonds that priced just a month ago.

There was a smallish add-on drive-by offering from Terremark Worldwide, Inc., a Miami-based data centers operator, while two forward calendar deals also priced: New York State-based tribal casino company Seneca Gaming Corp. and Dallas-based Roofing Supply Group LLC.

The calendar meantime added two other deals, as Mobile Mini, Inc. was heard to be beginning a brief roadshow for the portable storage company's 10-year deal. Swift Transportation Corp. will do secured notes to fund a debt refinancing.

However, it also lost a deal, as Rural/Metro Corp.'s $200 million eight-year offering was pulled. The Scottsdale, Ariz.-based ambulance and fire protection service provider instead upsized its pending bank loan by that same amount.

Price talk emerged on a pair of deals expected to price Tuesday - from Checkout Holding Corp. and from MedAssets, Inc.

Away from the new-deal arena, traders saw relatively quiet secondary market activity.

Affinion at the wide end

The primary market sprang to action on Monday as six issuers, each bringing a single dollar-denominated tranche of junk, combined to price $1.52 billion.

Affinion Group priced a $475 million issue of 7 7/8% eight-year senior notes (B3/B-) at 99.255 to yield 8%, at the wide end of the 7¾% to 8% price talk.

Deutsche Bank Securities and Bank of America Merrill Lynch were the joint bookrunners for the quick-to-market debt refinancing deal.

Seneca at tight end

Elsewhere, Seneca Gaming priced a $325 million issue of eight-year senior notes (B1/BB) at par to yield 8¼%, at the tight end of the 8¼% to 8½% price talk.

Bank of America Merrill Lynch and RBS Securities Inc. were the joint bookrunners for the debt refinancing.

Cincinnati Bell 8 3/8% notes

Cincinnati Bell priced a $275 million add-on to its 8 3/8% senior notes due Oct. 15, 2020 (B2/B+) at 101 to yield 8.199%.

The reoffer price came at the cheap end of the 101 to 101.5 price talk.

Deutsche Bank Securities ran the books for the quick-to-market sale bank debt refinancing.

Beazer Homes upsizes

Beazer Homes priced an upsized $250 million issue of 9 1/8% senior notes due May 15, 2019 (Caa2/CCC/B-) at 98.555 to yield 9 3/8%, on top of the price talk.

Citigroup and Deutsche Bank Securities were the joint bookrunners for the quick-to-market issue, which was upsized from $200 million.

The Atlanta-based homebuilder intends to use the proceeds to fund or replenish cash that has been used to fund the prior redemption or repurchase of its outstanding senior notes.

Roofing Supply at tight end

Roofing Supply priced a $225 million issue of seven-year senior secured notes (B2/B+) at par to yield 8 5/8%, at the tight end of the 8¾% area price talk.

Deutsche Bank Securities was the left bookrunner. Goldman Sachs & Co and Jefferies & Co. were the joint bookrunners for the debt refinancing deal.

Terramark taps 9½% notes

Terremark priced a $75 million add-on to its 9½% senior secured second-lien notes due 2013 at an issue price of 99 to yield 9.89%.

Credit Suisse ran the books for the quick-to-market deal.

The Miami-based information technology company will use the proceeds for working capital and other general corporate purposes to support the growth of its business, which may include capital investments to build out facilities.

Euro session

Switzerland's Sunrise Communications Holdings SA priced a €56 million add-on to its 8½% senior notes due Dec. 31, 2018 (expected ratings B3/B) at 103.50, on top of the price talk.

Deutsche Bank Securities and BNP Paribas were the global coordinators and joint bookrunners. UBS, SG CIB and UniCredit were also joint bookrunners.

The Zurich-based telecommunications company will use the proceeds to redeem up to CHF 75 million of preferred equity certificates and for general corporate purposes.

The original €505 million issue priced at 99.2238 to yield 8 5/8% on Oct. 7, 2010.

Elsewhere in Europe, Germany's Kuka AG began a roadshow on Monday for its €200 million offering of seven-year senior second-priority notes.

Deutsche Bank and Goldman Sachs & Co. are joint bookrunners for the debt refinancing deal from the Augsburg-based robotics company.

Icahn's split-rated deal

Meanwhile in the crossover market, Icahn Enterprises tapped two existing issues of split-rated senior notes (Ba3/BBB-), raising $517 million proceeds on Monday.

The $500 million face amount deal included a $200 million add-on to the 7¾% notes due 2016, which priced at 103.25 to yield 6.987%. The reoffer price came at the cheap end of the 103.25 to 103.50 price talk.

In addition, Icahn priced a $300 million add-on to the 8% notes due 2018 at 103.50 to yield 7.36%. The 8% notes add-on also priced at the cheap end of the 103.50 to 103.75 price talk.

Jefferies & Co. ran the books for the quick-to-market general corporate purposes deal.

Talking the deals

MedAssets talked its $325 million offering of eight-year senior notes with an 8% to 8¼% yield on Monday.

The JP Morgan and Barclays deal, which was downsized from $360 million, is set to price on Tuesday.

Elsewhere, Checkout Holding Corp., the parent of Catalina Marketing Corp., talked its $260 million offering of five-year senior discount notes (B3/B-) with a 10¾% area yield.

The JP Morgan and Bank of America Merrill Lynch deal is also set to price on Tuesday.

Meanwhile, HCA, Inc. is expected to roll out a super-sized dividend funding deal on Tuesday, with Citigroup in the lead, according to a debt capital markets banker.

Mobile Mini starts roadshow

Mobile Mini plans to issue $200 million of 10-year senior notes (expected ratings B2/B+).

The deal kicked off during a Monday conference call and is set to price on Wednesday afternoon, following a brief Tuesday-Wednesday roadshow.

Deutsche Bank Securities is the left bookrunner for the debt refinancing deal. Bank of America Merrill Lynch is the joint bookrunner.

Add-ons and drive-bys take over

A trader, noting the heavy roster of suddenly appearing drive-by deals - some of which were structured as add-ons to existing notes - remarked that everyone seemed to be doing them because "there's a lot of cash sitting on the sidelines" that has to be put to work.

New Beazers gyrate, olds gain

When Beazer Homes' new 9 1/8% notes due 2019 were freed for secondary dealings, a trader said that the paper initially got as good as a par bid, well up from the 98.555 level at which the $250 million offering priced earlier in the day.

But after that, he said, the bonds started to come in from the peak levels. "They traded up, then they traded right down," trading first at 99¾ bid, then 99 5/8, and finally at 99½ bid.

"So once they went up, they just went down."

A second trader saw the bonds finishing even lower after that initially strong start, quoting them at 99 bid, 99¾ offered.

Yet another trader pegged them at 99 1/8 bid, 99 5/8 offered going home.

Beazer's outstanding bonds moved up on news of the bond deal, with its 8 1/8% notes due 2016 up nearly 2 points on the day at 99¾ bid, while its 6½% notes due 2013 finished 1½ points better at 101 bid.

Cincinnati Bell trades below issue

A trader initially saw "nothing" doing in Cincinnati Bell's 8 3/8% notes due 2020. "I didn't see one quote in that thing today."

He opined that the issue - a $275 million add-on to the $500 million issue which priced at par back on Oct. 7 - may have been "primarily just put away."

However, later on he did see the bonds at about 101¼ bid, up slightly from the add-on's 101 issue price.

But still later in the session, the bonds were being quoted at another desk at 100½ bid, 101¼ offered.

The telecommunications company's existing bonds, meantime, were also seen on the downside, with its 8 3/8% notes due 2020 down 1¾ points at 101½ bid, while its 8¼% notes due 2017 were quoted a point lower at 103.

Icahn seen firming slightly

Both halves of Icahn Enterprises' new two-part offering of six- and eight-year notes were seen having moved up slightly when they were freed for trading.

A trader saw Icahn's notes due 2016 at 103½ bid, 104½ offered, ½ point better than their 103¼ issue price. He meantime saw Icahn's notes due 2018 at 103¾ bid, 104¾ offered, again up a little from their 103½ issue price.

A second trader saw the eight-years at 103¾ bid, 104¾ offered.

However, he also quoted the six-year bonds as having eased from issue to 102¾ bid, 103¾ offered.

Aftermarket no-shows

Traders saw no trace of Terremark Worldwide, Inc.'s smallish $75 million add-on to its 9½% notes.

Meanwhile, the new issues from Affinion Group, Roofing Supply Group and Seneca Gaming came too late in the session for aftermarket activity, market participants said.

New Harbingers move higher

A trader estimated that the new deals which came to market on Friday were up by ½ point to 1 point across the board.

"Everything's trading up," he asserted. "It's very difficult to put levels on them. Just everything's been trading up."

He pegged the new Harbinger Group Inc. 10 5/8% first-priority senior secured notes due 2015 at 100½ bid, 101 offered. That was up a little from the levels around par bid, 101 offered to which the New York-based holding company's $350 million issue - upsized from the originally announced $300 million - had risen on Friday after pricing earlier that day at 98.587 to yield 11%.

A second trader saw the new Harbinger bonds get even better, closing out at 101 bid, 102 offered.

At another shop, a trader characterized the Harbinger issue as "pretty amazing."

He explained that "you don't get a lot of these CCC deals" - the issue is rated Caa1 by Moody's, although it carried no rating from Standard & Poor's when it priced - "putting fresh money to work."

He continued that "you couldn't have done this six months ago, two years ago - or even four years ago" in 2006 when the junk market was booming along with ample liquidity, historically low default rates and brisk new issuance, and the problems that would start to overtake the financial markets the following summer and then metastasize into the 2008 market meltdown were still only just a blip on the far-distant radar horizon.

However, he cautiously concluded that "the market will not be able to take a lot more of these type deals."

Leap, Cricket seen a little easier

While Harbinger was still popping, a trader said that Friday's other two new issues - the mega-deals from rival pre-paid wireless operators MetroPCS Communications Inc. and Cricket Communications Inc. - were actually dropping.

He saw Dallas-based MetroPCS's new 6 5/8% notes due 2020 at 99 5/8 bid, par offered. The $1 billion offering - doubled in size from the originally announced $500 million - had priced Friday at par and then had traded in the aftermarket late in that session at par bid, 100½ offered.

Meanwhile, San Diego-based Cricket's $1.2 billion of 7¾% notes due 2020 had eased to 98 bid, 98½ offered; the super-sized issue had priced Friday at 98.323 to yield 8%, and then had firmed a little from issue in initial secondary trading to 98 5/8 bid, 98 7/8 offered.

But Cricket's existing 9 3/8% notes due 2014 - which are to be taken out using the proceeds from the new bond deal - firmed by ¼ point Monday in brisk trading, going home at 105¼ bid.

Secondary indicators turn mixed

Away from the new-deal world, a trader saw the CDX North American Series 15 HY index ending down 5/16 point on Monday to end at 102 7/16 bid, 102 9 1/16 offered, after having gained 1/8 point on Friday.

The KDP High Yield Daily index meantime rose by 10 basis points on Monday to end at 75.31, after having soared by 25 bps on Friday. Its yield declined by 3 bps on Monday, to 6.88%, after having come in by 8 bps on Friday.

The Merrill Lynch High Yield Master II index rose by 0.127% on Monday after having climbed by 0.199% on Friday. The latest advance pushed its year-to-date return up to 15.552%, its 13th consecutive new 2010 peak level, eclipsing the old mark of 15.405%, just recorded on Friday.

Advancing issues led decliners on Monday for an eighth straight session, although their winning margin was just a few dozen issues out of the more than 1,400 that traded, narrower than the seven-to-five advantage they had held on Friday.

Overall activity, represented by dollar-volume levels, plunged by one-third on Monday on top of the 23% decline seen on Friday from the previous session's level. Market participants noted that activity levels would likely continue to erode this week in the run-up to Thursday's Veteran's Day legal holiday, which will see the U.S. fixed-income markets closed.

A trader lamented that "the secondary is completely dead, other than new issues," with non-new-deal activity stilled by the lack of any paper out there for sale, since holders see no reason to sell and believe it will keep grinding higher.

"That's the name of the game," he declared.

Harrah's on a roll

Among specific issues which did get some trading in, Harrah's Entertainment Inc.'s bonds continued to firm, helped by Friday's release of favorable third-quarter results as well as investor optimism about the Las Vegas-based gaming giant's upcoming initial public offering of stock, the details of which surfaced in a regulatory filing on Friday.

Harrah's 10% notes due 2018 - which on Friday had jumped more than 3 points on that double dose of positive news - were seen having tacked on another deuce to go home trading above the 93 bid level.

Harrah's said in its regulatory filing that it had increased the size of the IPO to $610.9 million. It plans to sell 31.3 million common shares at $15 to $17 per share.

The deal includes an overallotment option of 4.69 million shares.

The third-quarter results meantime showed a swing to a $175.7 million profit, which compared favorably to a loss of $1.05 billion in the same quarter of 2009.

There was also a 0.3% increase in revenue, which rose to $2.29 billion, up from $2.28 billion the year before.

The company said the increase was "due primarily to revenues associated with our February 2010 acquisition of Planet Hollywood, which were mostly offset by the continuing impact of the recession on customers' discretionary spending."

-Stephanie N. Rotondo contributed to this report

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