Ruby Tuesday prices; giant Dish deal coming; calendar fattens up; Ally up on ResCap news

By Paul Deckelman and Paul A. Harris

New York, May 7 - The high-yield primary market kicked off a new week on Monday in relatively sedate fashion, at least in terms of actual pricings.

The primary saw one smallish transaction as restaurateur Ruby Tuesday, Inc. dished up a $250 million offering of eight-year notes, which appeared too late in the session for any kind of aftermarket.

But junk new-dealers had their attentions focused on a dish of another sort: Dish Network Corp., the big satellite broadcaster, was heard by syndicate sources to be shopping a $1.5 billion two-part offering of five-year and 10-year notes around Junkbondland.

The quickly shopped Dish offering was expected to come to market on Monday, but was not seen by the time things wrapped up for the day. Instead, traders said they heard price talk on both tranches of the deal and were expecting it to get done Tuesday.

Dish's existing bonds were quoted lower in the wake of the planned offering.

While there was not much actual pricing going on, the Dish offering was the centerpiece of a massive forward-calendar build totaling more than $4.53 billion as eight different deals were announced.

The companies making formal new-deal announcements were Dish, Penn Virginia Resource Partners, LP, Select Medical Corp., Northern Oil & Gas Inc., Thompson Creek Metals Co. Inc., Louisiana-Pacific Corp., Tekni-Plex, Inc. and Inmet Mining Corp.

Inmet Mining, a Canadian company, will be doing a U.S.-dollar-denominated megadeal.

"The forward calendar grew substantially today. No question about that," a secondary-market trader proclaimed.

Away from the new-deal arena, Ally Financial Inc.'s bonds were seen better on news that the automotive and mortgage lender and online banking concern formerly known as GMAC will receive the approval of the U.S. Treasury Department to go ahead with a bankruptcy filing for its troubled Residential Capital LLC mortgage subsidiary.

ResCap's debt was seen steady, since talk of a possible Chapter 11 filing for the money-losing Ally unit has been circulating around the financial markets for months.

Ruby Tuesday prices deal

The Monday primary market generated a whirlwind of news as the active forward calendar underwent precipitous growth.

However, when the dust cleared, only one deal priced.

Ruby Tuesday priced a $250 million issue of 7 5/8% eight-year senior notes (B3/B-/) at 98.536 to yield 7 7/8%.

The yield printed at the wide end of yield talk that was set in the 7¾% area.

Bank of America Merrill Lynch was the bookrunner for the debt refinancing and general corporate purposes deal.

DISH talks $1.5 billion

DISH Network and its subsidiary Dish DBS Corp. set price talk for a $1.5 billion two-part offering of senior notes (Ba2/BB-).

The deal includes a tranche of five-year notes, which are talked in the 4¾% area, and a tranche of 10-year notes, which are talked to yield 5¾% to 5 7/8%.

The deal was announced as Monday's business, but no terms were available at press time.

Deutsche Bank Securities Inc. is leading the general corporate purposes deal.

The company and high-yield investors may not be that close, a trader suggested after the Monday close.

Investors are looking for 5 1/8% on the five-year tranche, the trader said.

An investor from a high-yield mutual fund is taking a flyer on the new DISH offerings.

"We already own their existing bonds, which have a higher coupon," the manager said.

"You're not being paid that much to extend."

Thompson Creek seven-year deal

Thompson Creek Metals plans to price a $200 million offering of senior notes (confirmed Caa2/expected CCC+) on Tuesday.

J.P. Morgan, Deutsche Bank and RBC are the joint bookrunners.

The proceeds will be used to fund construction of the Mt. Millgan copper-gold mine and for working capital.

Inmet Mining brings $1 billion

Inmet Mining started a roadshow on Monday for its $1 billion offering of eight-year senior notes (expected ratings B1/BB-).

The deal is expected to price May 15.

Global coordinator J.P. Morgan will bill and deliver. Credit Suisse also is a global coordinator.

Bank of America Merrill Lynch, Citigroup, Morgan Stanley and RBC are joint bookrunners.

The Toronto-based mining company plans to use the proceeds to fund development capital for the Cobre Panama project and for general corporate purposes.

Penn Virginia starts roadshow

Penn Virginia Resource Partners and Penn Virginia Resource Finance Corp. II began a roadshow on Monday for a $450 million offering of eight-year senior notes (existing ratings B2/B).

The deal is expected to price late in the present week or early in the week ahead.

RBC, J.P. Morgan, Wells Fargo and SunTrust are the joint bookrunners.

The proceeds will be used to fund the acquisition of Chief Gathering LLC from Chief E&D Holdings LP and pay down Penn Virginia Resource's revolver.

Tekni-Plex brings secured deal

Tekni-Plex plans to start a roadshow Tuesday for its $480 million offering of seven-year senior secured notes.

Bank of America Merrill Lynch and Credit Suisse are the joint bookrunners for the debt-refinancing deal.

Select Medical starts Tuesday

Select Medical plans to start a roadshow Tuesday for its $365 million offering of eight-year senior notes (/B-).

The deal is expected to price Friday.

Morgan Stanley, Bank of America Merrill Lynch, Goldman Sachs, J.P. Morgan, RBC and Wells Fargo are the joint bookrunners.

The Mechanicsburg, Pa.-based operator of specialty hospitals and outpatient rehabilitation clinics will use the proceeds to repurchase its existing senior subordinated notes and for general corporate purposes.

Louisiana-Pacific plans show

Louisiana-Pacific will roadshow a $300 million offering of eight-year senior notes Tuesday and Wednesday.

Goldman Sachs, Bank of America Merrill Lynch and RBC are the joint bookrunners.

The Nashville, Tenn.-based building materials company will use the proceeds to repurchase, redeem or otherwise retire all of its outstanding 13% senior secured notes due 2017 and for other general corporate purposes.

Northern Oil starts Tuesday

Northern Oil and Gas plans to start a roadshow Tuesday for its $250 million offering of eight-year senior notes.

The deal is set to price during the early- or middle-part of the May 14 week.

RBC is the sole bookrunner.

The Wayzata, Minn.-based independent oil and gas acquisition, exploration, development and production company plans to use the proceeds to repay revolver debt and for general corporate purposes.

Ruby Tuesday blooms late

Among specific names, traders saw no dealings in the new Ruby Tuesday eight-year notes, owning to the lateness of the hour at which the Maryville, Tenn.-based restaurant chain operator's $250 million offering was finally served up to investors.

Several traders speculated earlier that the deal was likely to be pushed off for a Tuesday pricing, although that ultimately turned out not to be the case.

Dish existing bonds lower

Those traders apparently proved to be correct in their similar speculation about Dish Network's $1.5 billion two-part deal.

That quick-to-market deal originally was expected to price Monday just hours after it was announced, but it was never done as time wound down in the trading pits.

"The outstanding Dish paper was probably weaker by a half-point to a point in front of the new issue. That was pretty active today," a trader said.

A second trader quoted the Englewood, Colo.-based satellite broadcaster's Dish DBS Corp. 6¾% notes due 2021 down by 1 point on the day, at 109¼ bid; he estimated that at least $30 million of the bonds traded, making that probably the most active junk credit of the day.

Another trader also saw the bonds down 1 point, pegging them at 109 5/16 bid.

Elsewhere in the company's capital structure, its 7 1/8% notes due 2016 were quoted at 110¼ bid with nearly $12 million changing hands, making it one of the busier junk credits of the day.

Its 6 5/8% notes due 2014 eased to 108½ bid, while its 7¾% notes due 2015 fell back to 112¼ bid.

Affinity holds most gains

A trader said that Affinity Gaming LLC's new 9% notes due 2018 were trading at 101¼ bid, 101¾ offered.

That was perhaps a quarter-point in from the levels at which those bonds traded Friday after the Las Vegas-based operator of locally oriented gaming operations priced the $200 million deal at par. That deal priced after it was restructured from an originally planned eight-year transaction.

The trader, meantime, said he saw no trace at all on Monday of Friday's other pricing - Cincinnati-based alternative financial services provider CNG Financial Inc.'s 9 3/8% senior secured notes due 2020.

That $400 million issue priced at par on Friday, after being upsized from an originally envisioned $350 million. The new bonds traded between 101 and 102 in Friday's aftermarket.

Junk a little lower

Away from the new-deal arena, a trader said, "Stuff seemed to be down slightly this morning". The issues were down by about a quarter-point to a half-point, depending on the name, he said. "It started out really slow today."

Junk may have been initially playing off equities, which started out lower as the U.S. market took its early cue from European bourses shaken by weekend anti-austerity electoral results from Greece and France. This could jeopardize the overall effort to get Europe's burgeoning debt problems under control.

But as the day wore on, U.S. stocks cut their losses to end mixed, with the bellwether Dow Jones Industrial Average ending down only 29.74 points, or 0.23%, at 13,083 and the broader Standard & Poor's 500 and Nasdaq Composite indexes actually reversing course to end slightly in positive territory.

"I think we tried to open a little weaker in high-yield, but by the end of the day we kind of gained most of it back," a trader declared. "So there's still definitely better buy[ing] interest in the high-yield market, there's no question about that."

"It's still more difficult to find right sides than left," he added.

Market measures end mixed

Statistical measures of junk-market performance were mixed Monday for a fourth straight session.

A trader saw the Markit Group CDX North American Series 18 High Yield Index off for a third straight day, losing a quarter-point to end Monday at 95¾ bid, 96 offered, after having dropped 3/8 of a point on Friday.

The KDP High Yield Daily Index eased by 2 basis points on Monday to end at 74.20, after edging up by 1 bp on Friday. Its yield, though, came in by 2 bps, to 6.39%, after declining by 2 bps on Friday.

And the widely followed Merrill Lynch U.S. High Yield Master II Index posted its 10th straight daily gain on Monday, rising by 0.016%, following Friday's 0.075% advance.

That lifted its year-to-date return to 6.80%, a new peak level for 2012, from 6.782% on Thursday, which was the previous 2012 high-water mark.

Ally improves on ResCap news

A trader said that Ally Financial's bonds were better by at least a point across the board on news that it is likely to get the green light from its 74% owner, the U.S. Treasury, to proceed with a bankruptcy filing for its money-losing Residential Capital unit. That's if Ally's or ResCap's management decides that such a step is necessary to restructure the mortgage lender.

The trader said Ally's 8% bonds due 2031 rose to a 117-118 context. That was up about a point, on volume of about $8 million.

Ally's other bond issues also were quoted around a point better, though on lesser volume; for instance, its 5½% notes due 2017 moved up to 105½ bid from 104 3/8 on Friday, though volume was only about $1 million.

As for ResCap's own bonds, a trader said there really wasn't any kind of dealings. "It was pretty quiet," he said.

"This was not new news," the trader said, since it already was widely conjectured that the Treasury would allow Ally to restructure ResCap in order to protect Uncle Sam's own multibillion dollar investment in Ally made during the financial crunch at the end of 2008.

Another trader said that ResCap's 9 5/8% notes due 2015 were "kind of unchanged." He pegged the notes at 941/4.

Another market source repeated that level, also calling the paper unchanged.

According to a Bloomberg News report, an Obama administration official said Monday that parent company Ally Financial received conditional approval for a ResCap bankruptcy filing should that be the way the parent decides to deal with its struggling offspring. The administration would require that it be allowed to view any proposed plan ahead of a filing, the report said.

Some say that putting ResCap into bankruptcy might help taxpayers more easily recoup the bailout funds loaned to Ally.

"Obviously, that's big news," a market source said. "It could be a positive. Obviously there's a risk, but it could be a huge positive."

Cincinnati Bell quietly higher

Cincinnati Bell Inc.'s bonds continued to improve Monday, carrying the momentum generated Friday when the Ohio-based telecommunications company announced plans to raise capital via an equity offering and use some of those funds to pay down debt.

A trader said that its 8 3/8% notes due 2020 were a quarter-point better, at 105¼ bid, with "really light volume," in the credit, only two trades.

He saw the company's 8¾% notes due 2018 up three-quarters of a point, at 98½ bid, but said there was only one trade.

Its 8¼% notes due 2017 were up by a half-point at 107 bid.

On Friday, the 8 3/8% notes jumped more than 2 points on the session, to 104¾ bid, 105 offered, with more than $10 million of the bonds trading, which put the credit high up on the junk most-actives list.

Its 8¼% notes moved up more than 3 points Friday, to 106½ bid, 107 offered, while the 8¾% notes moved up to the 98 bid level, with more than $7 million changing hands.

One possible explanation for the surge was news on Thursday that the company plans to pursue an initial public offering of shares of common stock of a company that will be formed to own and operate CyrusOne, Cincinnati Bell's data-center business.

Cincinnati Bell said its objectives for the planned transaction are "to execute its growth strategy for the Data Center business, ultimately pay down debt to amounts appropriate for the remaining telecommunications company and to maximize value for Cincinnati Bell's shareholders."

Stephanie N. Rotondo contributed to this report

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