Giant-sized Frontier three-parter, plus HealthSouth, Allegion price to cap $8.7 billion week

By Paul Deckelman and Paul A. Harris

New York, Sept. 11 – Frontier Communications Corp. priced its long-awaited $6.6 billion three-part offering on Friday, capping off one of the heaviest volume weeks the high-yield primary market has seen in several months.

Traders said that the wireline telecommunications and broadband service provider’s behemoth of a bond deal – consisting of five-, seven- and 10-year notes – priced early enough in the day to see considerable aftermarket dealings, particularly the 10-year piece. They said the three tranches initially firmed solidly, but backed off from those peak levels as the day wore on.

Frontier’s regularly scheduled deal off the forward calendar mostly overshadowed the day’s other two pricings, both of them quick-to-market transactions. Medical facilities operator HealthSouth Corp. did an upsized $350 million of 10-year notes while Allegion plc, an Irish provider of security products and solutions, came to market with $300 million of eight-year notes. Traders quoted the new HealthSouth bonds modestly higher, but said that Allegion seemed to have caught a bid.

The day’s tally of new paper lifted issuance for the week – shortened by Monday’s market close in the United States for Labor Day – to $8.65 billion in eight tranches, a far cry from the week before, ended Sept. 4, which saw exactly zero new issuance. Statistical indicators of junk market performance were mixed for a third consecutive session, and the fourth mixed session in the last six.

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