Ally, Alere, upsized Clean Harbors lead $1.7 billion session; McClatchy slates, Meritor jumps

By Paul Deckelman and Paul A. Harris

New York, Nov. 28 - After several days of restrained activity, the high-yield primary sphere shook off the cobwebs Wednesday and saw its first really busy session since Nov. 16, as five U.S.-dollar-denominated, purely junk-rated issues priced, for a total of $1.7 billion of new paper.

Automotive and residential lender and bank operator Ally Financial Inc. led the way with a quickly shopped $500 million offering of three-year notes, which moved up slightly from its discounted issue price when it was freed for aftermarket dealings.

Healthcare concern Alere, Inc. priced $450 million of six-year notes, which firmed in the secondary.

Environmental services company Clean Harbors, Inc. upsized its 8.5-year deal to $600 million, and pulled a minor surprise by pricing Wednesday rather than Thursday, as market participants had expected. The new bonds were seen having firmed nicely after pricing.

There was also a pair of smallish quick-to-market add-ons to existing notes, with logistics and supply chain company syncreon Global pricing $100 million of additional six-year notes, while telecommunications and other utility infrastructure provider Dycom Industries Inc. dropping by with a $90 million tranche of eight-year subordinated notes. Neither appeared in the aftermarket.

Aircraft leasing firm Aircastle Ltd. - which had priced an upsized issue of seven-year notes on Tuesday - was heard by traders having hung onto the aftermarket gains it had notched in post-pricing dealings.

Price talk came out on natural gas transportation and storage company Inergy Midstream LP's upcoming $400 million offering of eight-year bonds, which is expected to price after the books close on Thursday.

The forward calendar grew as newspaper publisher McClatchy Co. announced a $750 million offering of 10-year notes.

Away from the new deals, traders said the secondary market was firm, with statistical performance indicators also seen on the upside. Auto components maker Meritor Inc.'s bonds rose on the news that the company would issue new convertible notes and use the anticipated proceeds for debt paydown.

Clean Harbors upsizes

A busy Wednesday in the primary market saw five junk-rated issuers, each bringing a single tranche, raise a combined total of $1.74 billion.

Clean Harbors priced an upsized $600 million issue of senior notes due June 1, 2021 (Ba2/BB+) at par to yield 5 1/8%, at the tight end of price talk that was set in the 5¼% area. The amount was increased from $550 million.

Goldman Sachs and Bank of America Merrill Lynch were the joint bookrunners for the acquisition-related deal.

Ally's three-year deal

Ally Financial priced a $500 million issue of 3 1/8% three-year senior guaranteed notes (B1/B+) at 99.445 to yield 3.3125%, on top of yield talk.

Real money accounts dominated in an order book that totaled $1.25 billion, according to a trader.

Barclays, Citigroup, Deutsche Bank and Goldman Sachs managed the quick-to-market deal.

Alere prices $450 million

Alere priced a $450 million issue of senior notes due July 1, 2018 (B3/B-) at par to yield 7¼%, at the wide end of the 7% to 7¼% yield talk.

Jefferies, Goldman Sachs and Credit Suisse were the joint bookrunners for the quick-to-market debt refinancing and general corporate purposes deal.

Dycom taps 7 1/8% notes

Dycom Industries priced a $90 million add-on to its 7 1/8% senior subordinated notes due Jan. 15, 2021 (Ba3/BB-) at 104.25 to yield 6.276%.

The reoffer price came at the rich end of the 103.75 to 104.25 price talk.

Goldman Sachs and Merrill Lynch were the joint bookrunners for the acquisition-related deal.

syncreon prices add-on

syncreon Global (Ireland) and syncreon Global Finance (US) Inc. launched and priced a $100 million add-on to their 9½% senior notes due May 1, 2018 (B3/B) at par to yield 9.496%.

J.P. Morgan ran the books for the quick-to-market add-on.

The Auburn Hills, Mich.-based logistics and supply chain solutions service provider plans to use the proceeds to fund a dividend to its shareholders and for general corporate purposes.

Talking the deals

Setting the stage for Thursday's session, Inergy Midstream LP and Inergy Midstream Finance Corp. talked a $400 million offering of eight-year senior notes (B1/BB) to yield 6% to 6¼%.

Citigroup is the left bookrunner. J.P. Morgan, Merrill Lynch, Credit Suisse, SunTrust and Wells Fargo are the joint bookrunners.

And Paramount Resources Ltd. talked its offering of C$250 million of senior seven-year notes (Caa1/B/) to yield in the 7 5/8% area.

The deal, which is being led by RBC, Scotia and BMO, is set to price on Thursday.

Altice to start roadshow

Israeli-focused telecom Altice Group will begin a roadshow on Thursday for a $1.09 billion equivalent multi-tranche deal.

A $700 million-equivalent tranche of dollar and euro bonds will mature in December 2019.

The second tranche, $390 million in senior notes, will be due in December 2020.

Goldman Sachs, HSBC and Morgan Stanley are the bookrunners.

Elsewhere there were deal announcements from Armstrong Energy, Inc., which plans to sell $200 million of senior secured notes due in 2019, and McClatchy Co., which proposes to sell $750 million of senior secured notes due 2022. Bookrunners have yet to step forward for either of those deals.

And both Moody's and Standard & Poor's circulated ratings on Hamilton Sunstrand Industrial's pending $775 million offering of senior notes (Caa1/CCC+) on Wednesday.

Credit Suisse will lead the bridged LBO deal, in a syndicate expected to include Citigroup, Deutsche Bank, Morgan Stanley, RBC and UBS.

Old and new Ally issues firm

When Ally Financial's new 3 1/8% notes were freed for secondary dealings, a trader pegged the bonds at 99 7/8 bid, 100 1/8 offered - up a little from the 99.445 level at which the Detroit-based automotive and residential lender and on-line bank operator had priced its deal.

A second trader also saw the bonds at that level.

Two other traders saw the Ally bonds get up to a par to 100¼ context.

Ally's existing paper was also seen firmer, with a market source quoting its 8% bonds due 2031 up ¾ point on the day at just below the 125 bid.

Its 8% notes due 2031 meanwhile improved to 122 bid. Volume on the latter issue was a relatively busy $8 million.

Alere, Clean Harbors improve

A trader said that Alere's new 7¼% notes due 2018 were initially being offered at 1011/2. Then bids emerged to create a two-sided market in the issue at 100½ bid, 101½ offered.

The Waltham, Mass.-based healthcare solutions company had priced its $450 million issue at par earlier.

There was also some activity in the company's existing debt, with its 9% notes due 2016 losing ½ point on the session to 1051/2. Round-lot trading volume was over $16 million, making those bonds one of the busiest Junkbondland credits on Wednesday.

Alere's 8 5/8% notes due 2018 dropped 1½ points in strictly big-bloc trading, finishing at 103 bid on volume of over $5 million.

And a market source saw the company's 7 7/8% notes due 2016 - the issue being taken out using the anticipated new-deal proceeds - up around ¼ point at just under 105. Volume was about $2 million.

The day's other sizable pricing, from Norwell, Mass.-based environmental services firm Clean Harbors, was seen by a trader having been bid for at 101, up from the par level at which the deal priced. A second trader later quoted the bonds as bid at 101 3/8.

Aircastle holds gains

A trader saw Aircastle's upsized $500 million of new 6¼% notes due 2019 "holding onto yesterday's [Tuesday's] gains," at 101 bid, 101½ offered.

A second trader located the bonds in a 101¼ to 101½ context.

The Stamford, Conn.-based commercial aircraft leasing company had priced that quickly-shopped deal at par on Tuesday, after having upsized it from the originally announced $400 million.

In Tuesday's aftermarket, they had firmed smartly to as high as a 101 to 101¾ bid context, although later on that session they traded in a 100¾ to 101¼ range.

Existing McClatchy seen better

McClatchy's 11½% notes due 2017 were seen up 3/16 point, closing at the 109½ mark.

Volume rose to $13 million, making it one of the day's busier issues.

The gains followed the news that the Sacramento, Calif. Based newspaper publisher would be bringing its $750 million offering of 10-year senior secured notes soon.

Meritor up on converts deal

The news that Meritor Corp. would be doing a $150 million convertibles issue and using the proceeds to pay down debt gave the Troy, Mich.-based automotive components manufacturer's existing high-yield bonds a boost, market sources said.

They saw Meritor's 9 1/8% notes due 2015 having gotten as good as 105½ bid during the session, well up from the previous round-lot level of 101, which had been notched last week.

Those bonds went home at 105 - still up 4 points on the day - on volume of $6 million.

"Two days ago, they were at 102, so they were up a few," a trader said.

He also said that the company's 10 5/8% notes due 2018 "were all over the place. This morning, they were at 102½ and they had a late trade at 103 3/8, so it's kind of spotty."

Those bonds ended up 3 5/8 points on the session, with about $7 million of round-lot volume - brisk enough, but certainly not a world-beater.

"These are not big issues," the trader said. "This was not an active trader."

Market stays firm

A trader said that a few issues were losers - bankrupt and beleaguered energy operator ATP Oil & Gas Corp.'s 11 7/8% second lien senior secured notes due 2015 "finally made it into the single digits," falling below 10 bid on volume of over $34 million, right at the top of the junk most-actives list.

And he said that McMoRan Exploration Co.'s 11 7/8% notes due 2014 were down 1 point at 99 bid, 99¼ offered.

But "other than that," he opined, the tone was good - a firm tone."

Indicators up on day

A second trader said that "nothing stands out. The market felt a little softer at the opening, but then it moved up with equities, amid these better feelings about the fiscal cliff talks."

Among statistical junk market performance indicators, the Markit Series 19 CDX North American High Yield index gained ¼ point on Wednesday, breaking a two-session slide. They ended at 99 9/16 bid, 99 11/16 offered. On Tuesday, the index lost 3/32 point.

The KDP High Yield Daily Index rose by 1 basis point to end at an even 74.00, its seventh consecutive gain. On Tuesday, the index had jumped by 18 bps. Its yield came in by 1 bps to 6.18%, its seventh straight narrowing, after having declined Tuesday 6 bps.

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