HCA, Crown Castle bring mega-deals; HCA gains in trading; Royal Caribbean jumps on financing

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., April 15 - As tax day came to an end, the secondary high yield market closed with a fairly positive tone, thanks in part to primary activity that made Wednesday the biggest day of 2009 to date in terms of dollar-amount of issuance Wednesday.

Two companies, HCA Inc. and Crown Castle International Corp., issuing via indirect subsidiaries, combined to raise $2.62 billion of proceeds.

That was more than $1.25 billion more than the next biggest session of the year, Jan. 22, when two issuers - including Crown Castle, as it happens - raised $1.36 billion.

In trading, HCA's new 8½% notes due 2019 instantly began climbing after being freed, traders reported. Toll Brothers Inc.'s recent new issue also gained ground, as did Crown Castle International Corp.

Elsewhere, Royal Caribbean Ltd.'s bonds spiked up after the company said it had secured a new financing facility. The bonds gained as much as 11 points on the news.

Meanwhile, Ford Motor Co.'s debt reversed its previously upward direction. The notes fell anywhere from ¼ to 1½ points after new sales data was released.

HCA massively upsized

HCA priced a hugely increased $1.5 billion issue of 8½%10-year first-lien senior secured notes (Ba3/BB) at 96.755 to yield 9% early Wednesday.

The deal, which was upsized from $500 million, priced on top of the price talk.

Approximately two hours after the terms were circulated, the notes were spotted at 98½ bid, 99 offered by a banker who was not in the deal.

The HCA transaction went very well, according to an informed source, who added that the fact that the notes traded up in the secondary indicated it had been well received by the market.

Citigroup, Banc of America Securities, JP Morgan, Deutsche Bank Securities and Goldman Sachs were joint bookrunners.

Proceeds will be used to repay term loans under the company's cash flow credit facility.

Wednesday's $1.5 billion issue was HCA's second secured notes deal thus far in 2009.

On Feb. 11 the Nashville-based health care services provider priced a $310 million issue of 9 7/8% eight-year senior secured second-priority notes (B2/BB-/B+) at 96.673 to yield 10½%. Proceeds from that issue were also applied to the company's bank debt.

Reverse inquiry drove the original $500 million-sized deal, an informed source said.

Allocations were tight, sources said.

However one account reported getting a full allocation, but declined to specify whether that allocation involved a special relationship with the underwriters.

Crown Castle brings $1.2 billion

Crown Castle subsidiaries CC Holdings GS V LLC and Crown Castle GS III Corp. priced an upsized $1.2 billion issue of 7¾% eight-year senior secured notes (Ba1/BB) at 97.092 to yield 8¼% on Wednesday.

The Morgan Stanley-led quick-to-market deal, which was upsized from $1.1 billion, came on top of price talk.

Late in the day the notes were trading at 99 bid, 99½ offered, in good volume, according to a hedge fund manager.

The order book was five- to six-times oversubscribed, according to market sources.

Proceeds will be used by the subsidiaries, together with other cash, to repay in full the outstanding mortgage loans relating to the Commercial Mortgage Pass-Through Certificates, series 2006-1 issued in 2006 by Global Signal Trust III, together with related prepayment premiums.

The issuers are indirect subsidiaries of Houston-based Crown Castle International Corp., which owns, operates, and leases towers and other communication structures for wireless communications.

It was also Crown Castle's second pass at the primary market this year.

On Jan. 22 the company priced an upsized $900 million issue of notes due 2015 at 90.416 to yield 11¼%.

Seagate sets talk

Also Wednesday Seagate Technology International set price talk for its $430 million offering of five-year senior secured second-priority notes (Ba1/BB+) at 11¾% to 12%, with a to-be-determined original issue discount.

The order books are scheduled to close early Thursday afternoon, with pricing expected afterwards.

Morgan Stanley is left bookrunner. Banc of America Securities LLC is the joint bookrunner.

Proceeds will be used for general corporate purposes including the repayment or repurchase of all or some of Seagate Technology HDD's $300 million floating-rate senior notes due Oct. 1, 2009 and other debt.

Seagate is a Scotts Valley, Calif., hard drive manufacturer.

Market indexes mixed, new issues gain

In secondary activity, the CDX Series 12 High Yield Index fell 3/8 of a point to 75 1/8 bid, 75 5/8 offered, a trader said But the KDP High Yield Index moved up to 55.46, with a yield of 12.68%, compared to Tuesday's level of 55.30, with a yield of 12.79%.

Still, a trader said the day was "pretty active," with above-normal volumes. Part of the increase, he speculated, was several new issues that had entered the marketplace.

HCA's 8½% notes due 2019 "traded up right from the get go," a trader said, placing the notes at 98.5, versus the original offer price of 96.755. Another trader quoted the issue at 98.25 bid, 98.75 offered.

Interest in the new issue ran over into the company's existing issues as well, with one source placing the 5¾% notes due 2014 at 75.25 bid, a gain of about 2 points.

Toll Brothers' 8.91% notes due 2017 also headed higher, gaining over ½ point to close around 98.75.

Meanwhile, Crown Castle's new 7¾% notes closed at 99 bid, 99.5 offered, compared to the original offer of 97.092.

Royal Caribbean jumps

Royal Caribbean's paper gained as much as 11 points on the day after the company said it had received funding to construct the world's largest cruise ship.

One market source pegged the 8¾% notes due 2011 at 90 bid, a gain of 11 points. Another quoted the 6 7/8% notes due 2013 at 68.5 bid, 69.5 offered, a 10-point gain day over day. The second source also saw the 7½% notes due 2027 at 50 bid, 51 offered, up just over 2 points.

The cruise operator announced it had secured an unsecured facility of $1.05 billion, or 80% of the contract price for its Oasis of the Seas.

The new 12-year facility is 95% guaranteed by Finnerva and BNP Paribas, Nordea Bank and SEB have each agreed to provide 20% of the financing, and have an opt-out option after six years, according to a press release. Finnish Export Credit Ltd. will provide the remaining 40% of the facility.

"We are very pleased to have secured the financing for Oasis of the Seas," said Brian J. Rice, executive vice president and chief financial officer, in a statement. "With the tight credit environment and lack of liquidity in the financial markets today, this financing is a testimony to the strength of our company, the terrific partnership we have with Finland, and the outstanding long-term relationships we enjoy with our banks."

Miami-based Royal Caribbean will release its quarterly results on April 23. A conference call is scheduled that day for 10 a.m. ET.

Ford slips on sales

Ford Motor saw its bonds falling ½ to 1½ points on the back of the release of new sales data.

At one desk, the shorter issues were seen dropping ¼ to ½ point, while the longer paper fell 1½ points or more.

A trader pegged the 7 3/8% notes due 2009 at 92.75, the 8% notes due 2016 at 70 and the 7 3/8% notes due 2011 at 79 1/8. In the long bonds, the benchmark 7.45% notes due 2031 were deemed over 2 points weaker at 40, while the 6 5/8% notes due 2028 slipped to 35 7/8.

Another trader quoted the benchmark issue at 38.5 bid, 40.5 offered, calling that 1½ points softer.

On Wednesday, Ford's European division announced its March sales. For the month, sales fell 13% to 163,000 vehicles in its 19 core markets across the continent. For the quarter, sales were seen falling 16% compared to 2008, with 352,200 vehicles being sold.

But the one bright spot was the company's Fiesta, which sold 52,800 units in March. That was the highest retail sales month for the small compact model.

"It is very encouraging to see Fiesta doing so well and also our market share developing so positively, given the declining market we are continuing to face in Europe," said Ford Europe's vice-president marketing, sales and service, Ingvar Sviggum, said in a statement.

Elsewhere in the autosphere, General Motors Corp.'s bonds ended the session mixed.

One trader called the 8¼% notes due 2023 a tad weaker at 7 1/8. But another saw the benchmark 8 3/8% notes due 2033 gaining ½ point to end at 8.5 bid, 10.5 offered.

GM said on Wednesday that it had received offers for its Saturn unit, including a proposal from Black Oak Partners LLC, an Oklahoma-based private equity firm.

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