Wyle prices, Martin Midream to come; Consol, Lear, others slate deals; more Six Flags firming

By Paul Deckelman

New York, March 22 -- Wyle Services Corp. priced a $175 million issue of eight-year subordinated notes on Monday - the only one of three deals which were expected to make it to market to do so. Prospective issues from Learning Care Group (US) No. 2 Inc. and Nationstar Mortgage LLC which had been expected to possibly be Monday's business were instead floated off until Tuesday.

That is also when Martin Midstream Partners LP/Martin Midstream Finance Corp.'s $200 million issue of eight-year notes is expected to price. The Kilgore, Tex.-based diversified energy services company's offering is expected to come at a 1 to 2 point discount from par.

That same energy sector that produced the Martin deal was a hotbed of primaryside activity on Monday, including the emergence of the day's biggest deal - Consol Energy Inc.'s $2.75 billion behemoth offering of seven- and 10-year notes, which is seen likely to price late this week. LINN Energy, LLC and LINN Energy Finance Corp. announced plans for a $500 million offering of 10-year notes, with pricing likely late this week or early next. Overseas Shipholding Group, Inc., which provides ocean transportation for crude oil and other petroleum products, unveiled plans to sell $300 million of eight-year paper.

Away from the energy patch, deals were announced by Lear Corp. ($700 million), Great Wolf Resorts ($225 million) and RadNet Inc. ($210 million). Syndicate sources also heard of Provident Funding Associates, LP's plans to sell $400 million of seven-year notes.

Away from the new-deal arena, traders saw further upside in Six Flags Inc.'s bonds in the wake of Friday's news that the New York-based theme park operator had struck a deal with its unsecured bondholders, giving them control of the problem-plagued company.

Wyle prices eight-year deal

The day's lone actual pricing came from Wyle Services, a McLean, Va.-based engineering firm specializing in high-tech testing, life sciences and technical-support services to federal government agencies including the Defense Department and NASA.

It came to market with a $175 million issue of 10½% eight-year senior subordinated notes (B3/B+), which priced at 98.675 to yield 10¾%, at the wide end of market price talk envisioning a yield of 10½% to 10¾%.

A trader said he had heard the deal was well oversubscribed, with some $600 million in orders from would-be buyers. The deal priced too late in the session for aftermarket activity.

The deal came to market via joint bookrunners J.P. Morgan Securities Inc. and Barclays Capital Inc.

Wyle plans to use the proceeds of its new offering to refinance debt.

Other deals a no show

Two other deals which had been seen as possible-to-likely for pricing during Monday's session, stayed on the sidelines, but could price during Tuesday's dealings.

Learning Care Group (US) No. 2 Inc., a Novi, Mich.-based education services provider, has been shopping around a $265 million issue of 13% senior secured PIK notes due 2015 (B2/CCC+) via joint bookrunners Barclays Capital and Wells Fargo. Sources heard price talk of between 96 and 97 on the deal.

The company hopes to use the proceeds for refinancing and for general corporate purposes.

And Nationstar Mortgage has a $250 million offering of five-year senior notes (B2/B) coming via Barclays, Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and RBS Securities Inc., all of whom are joint bookrunners.

The Dallas-based mortgage lender also aims to use the proceeds for refinancing and general corporate purposes. Price talk is for a yield between 11% and 11¼%.

Market awaits Martin Midstream

Another deal which is expected Tuesday is Martin Midtream's $200 million offering of senior notes due 2018 (B3/B+).

High yield syndicate sources heard price talk during Monday's session anticipating a yield of between 9 1/8% and 9 3/8%, with a discount of approximately 1 to 2 points.

The bonds are being brought to market via Wells Fargo, RBC and UBS Investment Bank.

Proceeds from the Kilgore, Tex.-based diversified energy services company's deal will be used to repay bank debt.

Several energy offerings slate

Market participants saw three new deals emerge from the energy patch on Monday, including the biggest announced deal of the day - Consol Energy Inc. unveiled plans to sell $2.75 billion of seven-year and 10-year senior notes.

Syndicate sources heard that the deal was being marketed to potential investors via a roadshow and would likely come to market late this week.

The sizes of the respective tranches have not been determined yet. The seven-year notes will be non-callable for the first four years and the 10-years non-callable for the first five years.

Bank of America Merrill Lynch, PNC Capital Markets LLC and RBS Securities Inc. will be joint bookrunners on the deal.

Consol, a coal and natural gas company based in Canonsburg, Pa., said that it plans to use the net proceeds of the offering to finance a portion of the $3.475 billion price for its previously announced acquisition of most of the Appalachian oil and gas exploration and production business of Dominion Resources, Inc. However, Consol said that if the acquisition is not completed, it will be required to redeem all of the notes.

Also in the energy arena, Houston-based LINN Energy was beginning a roadshow on Tuesday to market its planned $500 million offering of 10-year senior unsecured notes to potential investors.

That deal is expected to price late this week or at the beginning of next week via joint bookrunners led by RBC and also including Barclays, BNP, Citigroup Global Markets Inc., Credit Agricole, RBS Securities Inc. and Wells Fargo.

Linn plans to use most of the deal's proceeds to reduce debt under its revolving credit facility, although it will use a portion of the proceeds to unwind interest rate derivative contracts.

Overseas Shipholding Group, Inc. a New York-based bulk shipping company which primarily transports crude oil and petroleum products, announced that it will sell $300 million of eight-year senior notes.

A high yield market source heard that the company began a roadshow to market its offering to prospective investors, which will run through Wednesday, with pricing expected after that. Citigroup, Morgan Stanley and HSBC Securities (USA) Inc. will be bookrunners on the deal.

Overseas Shipholding plans to use the deal proceeds to reduce its unsecured revolving credit facility debt.

Lear plans notes

Among the non-energy companies slating deals on Monday, the biggest came from Lear Corp., an automotive components company based in Southfield, Mich. It said that it will sell $700 million of new eight-year and 10-year senior unsecured notes.

Citigroup, J.P. Morgan, Barclays and UBS will be the joint bookrunners for the offering.

Lear will use the net proceeds from the bond offering, along with its current cash and cash equivalents, to repay in full some $375 million outstanding under its first-lien credit facility and $550 million outstanding under its second-lien credit facility.

Provident to price secured issue

Provident Funding Associates, LP and PFG Finance Corp. will sell $400 million of seven-year first-lien secured notes.

Primaryside sources said that the company began a roadshow on Monday that will run through next Monday, March 29, with pricing expected soon after that.

J.P. Morgan will run the books on the deal.

Provident, a Burlingame, Calif.-based private, independent mortgage company, plans to use the deal proceeds to repay term loan debt and for general corporate purposes.

Great Wolf selling mortgage bonds

Great Wolf Resorts, Inc., a Madison, Wis.-based operator of indoor water park resorts, said that it planned to sell $225 million of seven-year first mortgage notes.

It plans to use the deal proceeds to repay outstanding mortgage debt totaling some $212 million on properties in Ohio, Virginia and Texas.

RadNet roadshows eight-year notes

Los Angeles-based outpatient diagnostic imaging services provider RadNet Inc. officially announced plans on Monday to sell $210 million of eight-year senior unsecured notes, which the company had previously indicated that it would do as part of a larger overall refinancing effort.

A market source said the deal would roadshow this week, and a second indicated that it would likely come to market at the end of the week via Deutsche Bank, along with Barclays, RBC and Jefferies.

RadNet had said on March 15 that it would undertake a $585 million debt refinancing program, which would include the $210 million note offering, but gave no other details at that time. It said on Monday that proceeds from the bond issue, along with borrowings under the new credit facilities that are a part of the refinancing plan, would be used to refinance its existing credit facilities, fund its previously announced acquisitions and pay related fees and expenses.

Recent deals stay around levels

Among recently priced offerings, a trader said that Da-Lite Screen Co. Inc.'s new 12½% notes due 2015 were "out of sight, out of mind."

Another said that he has been looking for the Warsaw, Ind.-based video screen maker's deal but "at just $105 million, it's unlikely we're going to run across it."

The company priced the bonds on Friday at 97.305 to yield 13¼%, and they had been quoted as high as 100½ bid in initial aftermarket dealings that session.

The trader also saw Ball Corp.'s new 6¾% notes due 2020 saying in the same 1011/2-102 context in which the Broomfield, Colo.-based packaging concern's new deal traded after an upsized $500 million priced Wednesday at par.

Market indicators mixed

Among bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up ½ point on Monday at 99 5/8 bid, 99 7/8 offered, after having been off by ½ point on Friday.

But the KDP High Yield Daily Index meantime fell by 7 basis points Monday to 71.87, after having eased by 1 bp on Friday. Its yield widened by 4 bps to 7.90%, after having been unchanged.

Declining issues finally overtook advancers, breaking a 16-session streak in which the latter had been on top. But the decliners only led by a couple dozen issues out of over 1,300 tracked.

Overall activity, measured by dollar-volume levels, rose by around 3% from Friday's pace.

A trader called Monday "one of those strange days, reminiscent of a vacation period, further speculating on whether it was due to the continued distraction of the basketball playoffs, "spring fever - or people digesting whether to cancel their healthcare or not."

Six Flags gains again

A trader saw Six Flags' 6 5/8% notes due 2014 up 3 points on the session to 36, continuing the positive trend seen Friday when those bonds and the New York-based theme park operator's other issues all rose handsomely into the mid-30s from the upper 20s.

The bonds rose on news of a settlement to the heated legal battle between secured creditors and the unsecured bondholders which had been fought over the previous two weeks before the U.S. Bankruptcy Court in Wilmington, Del., which has been overseeing the company's restructuring.

On Friday, the company said it had agreed to a proposal in which a Stark Investments-led group of unsecured bondholders would get control of the company post-bankruptcy.

According to the terms of the deal, the Stark group will invest $725 million in new equity. Bondholders also plan to borrow $1.1 billion to pay off more senior creditors and provide working capital.

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