McJunkin, Novasep, Aquilex, Edgen Murray price deals; TriMas on tap; Hawker Beechcraft rebounds

By Paul Deckelman and Paul A. Harris

New York, Dec. 16 - The immensely crowed high-yield forward calendar began to finally empty out significantly on Wednesday, with the pricing of four deals totaling $1.84 billion and €270 million, doing away with some of the big backlog facing primaryside players as the available days for getting new issuance done before year-end continue to dwindle away.

The big deal of the day was McJunkin Red Man Corp.'s $1 billion offering of seven-year senior secured notes. When the bonds were freed for secondary dealings, they were initially quoted a little easier, but then firmed up to end at slightly higher levels.

Also coming to market were offerings for Aquilex Holding, Novasep Holdings SAS - that one a two-part, dollar- and euro-denominated transaction - and late in the session, Edgen Murray Corp. The latter bond issue had been restructured before its pricing, with the maturity date pushed up by two years, from seven years to five, and the bonds became callable after three years rather than the original four.

That was also the case with United Maritime Group LLC's offering; besides the reduction of the tenor to 5.5 years from the original seven years, again with the call protection reduced by a year, syndicate sources said covenant terms were changed as well. Additionally, price talk surfaced on the $200 million offering.

Talk also emerged on two other deals during the session, for TriMas Corp., and for Geokinetics Holdings, Inc., with the former deal expected to price on Thursday morning and the latter sometime Friday.

Still waiting in the wings for possible pricing this week are offerings from GXS Worldwide, Inc., P2021 Rig Co. - i.e. Vantage Drilling Co. - Birch Communications, Inc., Formations Metals Inc. and the most eagerly anticipated of the group, Clear Channel Worldwide Holdings, Inc. The latter company's existing bonds were meantime seen higher in very active trading for a fourth straight session.

Elsewhere in the secondary sphere, apart from Clear Channel, a trader described the day's action as "lackluster," although there was some volatile trading in Hawker Beechcraft Corp. bonds for a second straight session following the Wichita, Kan.-based aircraft manufacturer's loss of a sizable contract -- although the bonds recovered some of their lost ground when company officials downplayed its importance on a conference call.

Cash bonds ended Wednesday ¼ to ½ point higher, according to a trader from a high-yield mutual fund.

"There is still plenty of cash out there," the trader remarked, adding that the firmness in the market ought to carry over into the new year.

McJunkin prices $1 billion

The primary market saw four issuers raise $1.84 billion and €270 million, in five tranches, during the midweek session, which saw dealers move up timing on at least a pair of transactions.

McJunkin Red Man printed the session's biggest deal - a $1 billion issue of 9½% seven-year senior secured notes (B3/B) at 97.533 to yield 10%.

The yield printed on top of the yield talk. The issue price came in line with the 2 to 3 points of discount talk.

Goldman Sachs & Co. was the left bookrunner for the debt refinancing. Barclays Capital Inc. was the joint bookrunner.

Shortly after terms surfaced the bookrunner had the notes at 97¾ bid, 98 offered, versus the 97.533 pricing.

Away from the bookrunner the notes were at 97 7/8 bid, 98 3/8 offered, according to a market source.

Edgen Murray moves up deal

Edgen Murray moved up timing, and priced a restructured $465 million issue of 12¼% five-year senior secured notes (Caa1/B) at 99.059 to yield 12½% late on Wednesday.

The issue priced on top of price talk.

The deal was initially expected to price on Thursday.

The restructuring included decreasing the maturity of the notes to five years from seven years, and decreasing the call protection to three years from four years.

J.P. Morgan Securities Inc. and Jefferies & Co. were joint bookrunners for the debt refinancing.

Aquilex prices at tight end

Elsewhere, Aquilex Holdings LLC and Aquilex Finance Corp. priced a $225 million issue of 11 1/8% seven-year senior notes (B3/B) at 95.948 to yield 12%.

The yield printed at the tight end of the 12% to 12¼% price talk.

Credit Suisse Securities, Morgan Stanley & Co. and RBC Capital Markets Corp. were joint bookrunners for yet another debt refinancing deal.

Novasep prices two-parter

Earlier in the session Novasep Holding priced a €373 million equivalent two-part offering of seven-year senior secured notes (B3/B).

The Nancy, France-based pharmaceutical ingredients and technologies company priced a €270 million tranche of 9 5/8% notes at 98.765 to yield 9 7/8%.

The yield of the euro-denominated tranche priced in the middle of the 9¾% to 10% price talk.

Novasep also priced a $150 million tranche of 9¾% notes at 97.555 to yield 10¼%.

The dollar-denominated notes priced at the wide end of the 10% to 10¼% price talk.

JP Morgan ran the books.

Again, proceeds will be used to refinance senior secured debt.

A buy-side source whose firm participated in the dollar-denominated tranche saw the notes at 98½ bid, early Wednesday afternoon, versus the 97.555 reoffer price.

The deal was primarily a European play, the source added.

TriMas talks $250 million

Meanwhile, the stage was set for a relatively busy Thursday.

TriMas Corp. talked its $250 million offering of eight-year second-lien senior secured notes (/B-/) to yield 10 1/8% to 10 3/8% on Wednesday.

Pricing is set for Thursday morning.

The notes are expected to price with 2 to 3 points of original issue discount.

Credit Suisse Securities, J.P. Morgan Securities Inc., Bank of America Merrill Lynch and Jefferies & Co. are joint bookrunners for the deal, which will be used to fund a tender.

Geokinetics sets price talk

Geokinetics Holdings talked its $275 million offering of five-year senior secured notes (B2/B) to yield 10% to 10¼%.

The notes are expected to price with 1 to 2 points of original issue discount.

The books close at 5 p.m. ET on Thursday. Pricing is set for Friday.

RBC Capital Markets Corp. is the lead bookrunner for the acquisition-funding and debt refinancing deal. Bank of America Merrill Lynch is the joint bookrunner.

Also for Thursday

United Maritime Group talked its $200 million offering of seven year senior secured notes (B3/B) to yield in the 11 7/8% area, on Wednesday.

Early Wednesday afternoon a syndicate source told Prospect News that timing on the deal had been moved up to late Wednesday from early Thursday.

However, no terms were available as Prospect News went to press, Wednesday night, according to an informed source.

Jefferies & Co. Inc., Bank of America Merrill Lynch and Wells Fargo Securities LLC are joint bookrunners for the debt refinancing.

Also expected to price Thursday is Clear Channel Worldwide Holdings's $750 million offering of senior notes due 2017.

The deal is being whispered in a context of 8¾%, according to a high-yield mutual fund manager.

It will be comprised of $600 million of series A notes and $150 million of series B notes.

Goldman Sachs & Co., Citigroup Global Markets Inc., Credit Suisse Securities, Deutsche Bank Securities Inc. and Morgan Stanley & Co. are joint bookrunners.

New McJunkin Red Man rises slightly

When the new McJunkin Red Man 9½% senior secured notes due 2016 were freed for secondary dealings, a trader initially saw the paper offered at 971/2, but then saw a bid of 96 \3/4, down from the 97.533 level where the Tulsa, Okla.-based pipe and valve manufacturer's issue had priced earlier.

However, "after a short time, bonds traded up" from that initial softness, firming back to 97, then 971/2, before being left at 98 bid.

A trader at another shop quoted the new bonds at 97½ bid, 98 offered.

Aquilex advances

Among the other deals which priced during the session, a trader said that he "didn't see too much" of Aquilex Holding's $225 million issue of 11 7/8% notes, which had priced at 95.948.

"Right out of the box this morning, we saw a 97 bid, without an offering," he said, but added that "we just never saw anything again."

But a second trader pegged the Atlanta-based chemical and energy infrastructure company's new deal as high as 99 bid, par offered.

Wednesday's other newbies unseen

Edgen Murray's $465 million of 12¼% notes priced too late in the session for any kind of an aftermarket.

And even though it priced considerably earlier in the day, several traders saw no trace of French pharmaceutical ingredients producer Novasep Holding's dual-currency deal.

One - noting that the dollar-denominated 9¾% senior secured notes due 2016 only weighed in at $150 million, less than half the size of the euro-denominated portion - opined that "I doubt that we'll see that small piece" trading around.

Windstream seen a winner

A trader said that Little Rock, Ark.-based telecommunications provider Windstream Corp.'s new issue of 7 7/8% notes due 2017 showed "a little pop," seeing the bonds first trading at 99 bid, with no offering, and then at 99¼ bid, 99½ offered.

That was up from the 98.5 level where the company's $700 million add-on issue - upsized from the originally announced $600 million -had priced on Tuesday to yield 8.132%.

However, another trader had the new bonds considerably lower, at 98 bid, 98½ offered.

Waiting for Clear Channel

A trader said that Clear Channel Communications' existing bonds were "kind of the name of the day, with just a lot of paper moving, being quoted around, and trading going on," as the primary market continued to await the pricing of its much-anticipated offering of $750 million of new notes due 2017.

Another trader declared that "CCU [i.e. Clear Channel] "still had a big day" - its fourth in a row - amid market expectations for its upcoming new deal. "I kept seeing that name all day long."

He saw Clear Channel's 10¾% notes due 2016 trading in an 80-81 context and finishing right around 80 bid, which he said was "up another point." He said there was "good volume, as they were waiting for the deal."

He also saw "huge volume as well" in the San Antonio, Tex.-based broadcasting and outdoor advertising company's 11% notes due 2016. These ended up around the 72 level, which he called unchanged - but said the issue was "a big volume trader."

A market source said that about an hour before the close, nearly $30 million of the 11s had changed hands and more than $20 million of the 103/4s, making them easily the busiest bonds in Junkbondland. Unlike the first trader, he quoted the 11s up some 2½ points on the day at 731/2, while seeing the 103/4s gaining 2¼ points to above the 80 level.

Another market source meantime saw the company's 6 7/8% notes due 2018 more than 3 points ahead on the day at 571/2. Its 6¼% notes due 2011 firmed by 2 1/8 points on the day, on somewhat less volume, to 94 1/8 bid.

Market indicators continue rise

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index up 5/8 point on Wednesday, at 97 3/8 bid, 97 7/8 offered, after having lost ¼ point on Tuesday.

The KDP High Yield Daily Index meanwhile rose by 12 basis points on Wednesday to 70.85, after having gained 8 bps on Tuesday. Its yield tightened by 5 bps to 8.17%, after having come in by that same amount the previous session.

In the broader market, advancing issues again led decliners on Wednesday, for a 12th straight session, by a margin of better than four to three.

Overall market activity, as measured by dollar-volume, rose 8% from Tuesday's pace.

A trader said that apart from the activity in Clear Channel's existing paper ahead of its bond deal, things were "a little lackluster."

Hawker hits turbulence

A trader said that Hawker Beechcraft's 8½% notes due 2015 were trading as low as 56½ bid the first thing this morning, which he said was "down a couple of points" from the notes' Tuesday close around 59 - with that level itself representing a more than 10-point loss during the Tuesday session, on news that one of the aircraft manufacturer's customers had cancelled some $2.6 billion of production contracts.

However, as the morning wore on, he said he first saw "some small pieces" trading at 60½ bid, and the bonds continued to move up - to 61, 63 and finally as high as 651/2, before they came slightly off their peak to close out at 65, "a really big move" from the early lows, after the company dismissed the lost contracts and said its finances would not be affected.

Late Monday, the Wichita, Kan.-based aircraft manufacturer said that NetJets Inc. had cancelled a "significant" number of orders. The cancellation of the unspecified number of business jets will result in an order backlog reduction of about $2.6 billion, the company said.

But in a conference call held Wednesday morning, W. W. "Bill" Boisture Jr., chairman and chief executive officer, said that the nixed agreement would have "minimal effect on our liquidity, earnings, and deliveries in 2009 and 2010."

"NetJets has been a customer of ours since 1997, and there have been occasional cancellations and reorders before, but the fact is that while NetJets accounts for a significant portion of our order backlog, it represents just 10% of our sales volume, and less than 5% of our revenue," Boisture said.

Also on Monday, Hawker provided preliminary results for the fourth quarter. The company is anticipating posting revenue of $1.1 billion, bringing the total-year revenues to $3.2 billion. Operating income for the quarter is expected to fall between zero and negative $15 million. Full-year operating loss is forecasted between $725 million and $740 million.

GM upside ride continues

A trader said that General Motors Corp.'s bonds "continued to move higher today," a day after GM firmed on the company promise to have its debt to the government repaid by this coming June. He saw its benchmark 8 3/8% bonds due 2033 up a point at 26 bid, 27 offered. "There was some trading, higher than [Tuesday] - some trading, but not a lot of trading."

Another trader had seen the GM long bonds up ½ point at 25½ bid, 26½ offered, while GM's domestic arch-rival, Ford Motor Co.'s 7.45% bonds due 2031, were unchanged at 89 bid, 90 offered.

CIT new bonds stable

A trader said that CIT Group Inc.'s bonds were "pretty steady today," pretty much unchanged, with its five issues of 7% bonds due from 2013 to 2017 mostly staying in the upper 80s to lower 90s and the five series of 10¼% notes due from 2013 to 2017 holding around 102-103, the levels both of those bonds assumed in the several days which they've traded since they were issued upon the New York-based commercial lending company's exit from Chapter 11 last Thursday.

"I'd say they were active, but unchanged," he said, seeing the 7% notes due 2017 at 87-88, unmoved but "on good volume, really good-sized trading."

-Stephanie N. Rotondo contributed to this report.

© 2015 Prospect News.
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