Intelsat, others price $2.7 billion; new Ford Credit climbs; funds jump by $1.191 billion

By Paul Deckelman and Paul A. Harris

New York, Sept. 16 - There was no stopping the high-yield borrowing binge on Thursday, as deals having a collective face amount of nearly $2.7 billion came to market, all of them pricing right at par.

Still more new junk is expected to come to market on Friday.

The day's biggest new deal was sent aloft by Intelsat Jackson Holdings SA, a unit of Bermuda-based communications satellite company Intelsat. The deal was upsized to $1 billion and traded up slightly when it reached the aftermarket.

Also pricing were new issues from FTI Consulting, Inc. ($400 million); Brigham Exploration Co., Hertz Corp. and PHI Inc. ($300 million each, with Brigham upsized); ProQuest LLC/ProQuest Notes Co. (an upsized $275 million); Graham Packaging Co. ($250 million); and Beverages & More, Inc. ($156.3 million). The overall size of the latter deal was increased when it was restructured to add a small tranche of secured PIK notes to the originally shopped cash-pay secured paper.

Intelsat, Hertz and Graham were all quickly marketed offerings that priced just within hours after their respective new-deal announcements.

All of the new issues gained in the secondary market, with Brigham, Graham and ProQuest showing particular aftermarket improvement.

Traders also said Tuesday's new $1 billion offering from Ford Motor Credit Co. continued to firm smartly from its below-par pricing level. Overall, prices remained strong even away from the new-deal arena.

And Junkbondland saw the biggest inflow in two months to weekly reporting high-yield mutual funds, considered a reliable proxy for overall liquidity trends, as some $1.191 billion more came into those funds than left them in the week ended Wednesday.

Junk funds soar by $1.191 billion

As things were winding up for the day, market participants familiar with the weekly Lipper FMI high-yield mutual fund flow numbers compiled by AMG Data Services of Arcata, Calif. - considered a reliable barometer of overall market liquidity trends - said that those funds saw a mammoth $1.191 billion more come into them than leave them.

It was the second straight weekly inflow, following the $645 million cash infusion seen in the previous week ended Sept. 8 and was the biggest cash addition to the funds since a $1.274 billion inflow seen in the week ended July 14, according to a Prospect News analysis of the figures provided by market sources.

The latest week's inflow brought the year-to-date cumulative total for the weekly reporting funds up to some $7.131 billion, a new peak level for the year, from the previous week's $5.94 billion, the previous year-to-date peak, according to the Prospect News analysis.

Inflows have been seen in 25 weeks out of the 37 since the beginning of the year, while there have been 12 outflows, the analysis indicated.

EPFR sees $977 million inflow

Another fund-tracking service - Cambridge, Mass.-based EPFR Global, whose methodology differs somewhat from AMG - meantime reported a $977 million inflow in the latest week, which followed a $700 million inflow the week before.

EPFR's analysts said in a research note late Thursday that the surge of money into the funds was "reflecting the recent jump in risk appetite."

Reflecting the difference between the ways AMG and EPFR calculate their respective fund-flow totals, although the two services' numbers generally point toward the same trends - EPFR includes results from certain non-U.S. domiciled funds as well as the domestic funds - its year-to-date net inflow total now stands at $11.52 billion, a new peak level for the year, versus the old peak of some $10.427 billion seen the week before.

Any and all cumulative fund-flow totals, whether for AMG or EPFR, may be rounded up or down and could include unannounced revisions and adjustments to figures from prior weeks.

Intelsat ups it to $1 billion

The red-hot primary market saw nine issuers raise $2.98 billion during the Thursday session.

Four of the nine tranches came in upsized amounts.

Seven of the session's executions came at the tight end of price talk, while one - the biggest one - priced on top of talk, and one tranche came without talk.

Intelsat Jackson priced an upsized $1 billion issue of 10-year senior notes at par to yield 7¼%.

The yield printed on top of price talk.

Credit Suisse, Morgan Stanley, Barclays Capital and Deutsche Bank Securities were the joint bookrunners for the quick-to-market debt refinancing deal from this well-known high-yield name.

FTI upsizes, plays to substantial demand

Elsewhere, FTI Consulting priced an upsized $400 million issue of 10-year senior notes (Ba2/BB) at par to yield 6¾%, at the tight end of the 6¾% to 6 7/8% price talk.

Bank of America Merrill Lynch, J.P. Morgan Securities Inc. and Goldman Sachs & Co. were the joint bookrunners for the debt refinancing and general corporate purposes deal, which was marketed via on an investor roadshow.

The deal, coming from a high-quality repeat issuer, went very well and played to substantial demand, according to a syndicate source.

Brigham at the tight end

Brigham Exploration priced an upsized $300 million issue of eight-year senior notes (Caa2/B+) at par to yield 8¾%, at the tight end of the 8¾% area price talk.

Credit Suisse and Bank of America Merrill Lynch were joint bookrunners for the issue, which was upsized from $250 million.

The Austin, Texas-based oil and gas exploration company plans to use the proceeds to refinance its existing 9 5/8% senior notes due 2014.

Hertz $300 million drive-by

Hertz priced a $300 million issue of eight-year senior notes (B2/CCC+) at par to yield 7½%, at the tight end of the 7½% to 7¾% price talk.

Barclays Capital, Deutsche Bank Securities and Wells Fargo Securities were the joint bookrunners for the quick-to-market deal.

Proceeds will be used for general corporate purposes, including the funding of the Dollar Thrifty acquisition, or to repay corporate debt.

PHI $300 million tight

PHI priced a $300 million issue of eight-year senior unsecured notes (B2/B+) at par to yield 8 5/8%.

The yield printed at the tight end of the 8¾% area price talk.

UBS Investment Bank ran the books.

Proceeds will be used to fund the tender for all of the company's outstanding 2013 notes, to redeem notes not purchased in the tender and for general corporate purposes.

ProQuest upsizes

ProQuest LLC and ProQuest Notes Co. priced an upsized $275 million issue of eight-year senior notes (B3/B) at par to yield 9%, at the tight end of the 9% to 9¼% price talk.

Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and Jefferies & Co. were the joint bookrunners for the issue, which was upsized from $250 million.

The company intends to apply about $93 million of the proceeds to repay term loan advances under the existing first-lien senior secured credit facility and about $60 million to repay its second-lien senior secured credit facility.

The company will also make a distribution of up to $50 million to the direct parent, CSA, which will in turn provide a dividend to ProQuest Holdings, the company's indirect parent.

The remaining $35 million will go for general corporate purposes, including working capital and capital expenditures, or to strategically acquire or invest in companies, assets and technologies.

Graham drives through

Graham Packaging Co., LP and GPC Capital Corp I priced a $250 million issue of eight-year senior unsecured notes (Caa1/B-) at par to yield 8¼%, at the tight end of the 8 3/8% area price talk.

Citigroup and Deutsche Bank Securities ran the books for the quick-to-market acquisition financing.

Beverages & More upsizes

Finally, Beverages & More, Inc. and its parent, BevMo Intermediate Holdings, Inc., raised a combined total of $156.3 million in an upsized, restructured two-part sale of notes.

Beverages & More, Inc., the operating company, priced a $125 million issue of four-year senior secured notes at par to yield 9 5/8%.

The yield printed at the tight end of the 9¾% area price talk.

Credit ratings remain to be determined.

Proceeds will be used to redeem all existing senior secured notes, to repay a portion of the existing revolver and to redeem a portion of the parent's senior secured PIK notes.

Meanwhile, in an added tranche, BevMo Intermediate priced $31.319 million of non-rated 4.5-year senior secured PIK notes at par to yield 14%.

There was no official price talk on the BevMo notes.

Proceeds from the sale of the BevMo notes will be used to repay the remaining balance on the existing holding company notes.

Jefferies & Co. ran the books.

GenOn talks $1.2 billion

The primary market might back off a tad on Friday, a syndicate banker said.

Nevertheless, there are deals expected to clear.

GenOn Energy downsized its two-part offering of senior notes (B3/B) to $1.2 billion from $1.4 billion and set price talk, a market source said on Thursday.

An eight-year bullet tranche is talked at 9½% to 9¾%.

Meanwhile, a tranche of 10-year notes, which come with five years of call protection, is talked 50 basis points behind the eight-year tranche.

The deal is expected to price on Friday.

Visant sets talk

Visant Corp. talked its $750 million offering of seven-year senior notes (Caa1/B-) with a 10% to 10¼% yield.

Covenant modifications were also introduced to the deal.

The order books close at 10 a.m. ET on Friday, and the deal is set to price thereafter.

Goldman Sachs & Co. is the left lead bookrunner. Credit Suisse Securities, Bank of America Merrill Lynch, Barclays Capital Inc., Deutsche Bank Securities Inc. and KKR Capital Markets are the joint bookrunners.

Tomkins pulls bonds

Meanwhile, Tomkins plc increased the size of its six-year term loan B to $1.7 billion from $1 billion and eliminated plans for a $600 million secured bond offering.

Proceeds will be used to help fund the acquisition of the company by Pinafore Acquisitions Ltd., a company jointly owned by Onex Corp. and Canada Pension Plan Investment Board, for 325p per share in cash.

Brigham does excellently

In the new-deal aftermarket, Brigham Exploration's 8¾% notes due 2018 were the day's standout performer, as the company's $300 million offering - upsized from the originally announced $250 million - jumped to 103 bid, 103¼ offered on the break, well up from its par pricing level.

However, a trader said, while the new Brighams jumped "right out of the box," he did not see very much trading in the name after that.

A second trader saw the bonds at 102 5/8 bid, 103 1/8 offered, while a third had them going out at 102½ bid, 103.

ProQuest, Graham trade up

Also showing some strength when they finally began trading around were the day's new deals from Graham Packaging and from ProQuest.

A trader saw York, Pa.-based packaging maker Graham's $250 million of opportunistically timed and marketed 8¼% notes due 2018 at 101¼ bid, 101¾ offered, up from their par issue price.

ProQuest's $275 million of 9% notes due 2018 - upsized from $250 million originally - were quoted by a trader at 101½ bid, 102½ offered, up from par.

However, another trader said that he had "not heard 'boo' " on the Ann Arbor, Mich.-based electronic publisher and microfilm service.

Intelsat gains altitude

When the day's biggest deal - the new Intelsat Jackson 7¼% notes due 2020 - was freed for secondary dealings, a trader saw the upsized $1 billion drive-by deal at 100½ bid, 100¾ offered, up from their par issue price earlier in the session.

A second trader saw them at 100¼ bid, 100¾ offered.

Another airborne name in the new-issue sphere, Lafayette, La.-based helicopter service provider PHI's $300 million of 8 5/8% notes due 2018, were seen by a trader at 100 3/8 bid, 100¾ offered, after having priced at par.

Hertz a bit higher

Hertz's $300 million of quickly shopped 7½% notes due 2018 wasn't exactly in the fast lane, with a trader quoting the Park Ridge, N.J.-based vehicle rental company's deal as up perhaps ¼ of a point on the day at 100¼ bid, 100¾ offered.

Another trader saw the bonds having gotten as good as 100½ bid, 101 offered.

FTI a little firmer

West Palm Beach, Fla.-based business advisory firm FTI Consulting's $400 million of 6¾% notes due 2020were seen by a trader at 100 5/8 bid, 100 7/8 offered, up a little from the par pricing level.

At another shop, a trader saw those bonds get as good as 100½ bid, 101½ offered.

Beverages & More a secondary no-show

Traders said they saw no sign of Beverages & More Inc.'s new $156.3 million two-part offering, which had been restructured from its original single-tranche status.

The Concord, Calif.-based wine and spirits distributor's restructured its deal to add a second tranche, this one five-year PIK notes.

New Ford Credits continue to fly

While all of the day's new deals firmed, and several gained more than a point, traders said that Ford Motor Credit's new 5 5/8% notes due 2015 seemed to be putting everyone to shame, continuing its rise from the 99.466 level at which the Dearborn, Mich.-based automotive lender had priced its $1 billion offering on Tuesday.

A trader said the new bonds "just keep moving up." He saw them at 102 1/8 bid, 101½ offered - well up from Wednesday's close around 100¼ bid, 101 offered.

He noted that the volume in the credit was only about half that seen the previous session - but was still huge enough to land high up on the most actives list, with some $80 million of the notes changing hands. Volume on Wednesday had reached an astounding $100 million, the trader said.

"Wow!" said a second trader when he went to check the levels on the new bonds and found them up around 102 bid, 102½ offered.

Yet a third trader, who also saw the paper at that same level, made note of "the unbelievable volume" in the credit.

"It's just crazy," he said.

Energy Transfer hangs onto gains

Another recent big deal, which was seen hanging around at levels well up from pricing, was Dallas-based natural gas company Energy Transfer Equity's upsized $1.8 billion of 7½% notes due 2020.

A trader quoted those bonds at 103¼ bid, 103¾ offered - not too far below levels in the high 103-104 area the bonds had moved to late Wednesday, after having priced earlier at par.

Market indicators on upside

Away from the new-deal world, a trader saw the CDX North American HY Series 14 index ease by 1/8 of a point on Thursday to end at 97 7/8 bid, 98 1/8 offered, after having been unchanged for the previous two sessions.

But the KDP High Yield Daily index meantime gained 7 basis points Thursday to end at 72.83, on top of the 11 bps rise seen on Wednesday. Its yield came in by 4 bps for a third straight session on Thursday, closing at 7.8%.

The Merrill Lynch High Yield Master II index rose by 0.135% on Thursday, after having improved by 0.112% on Wednesday. It continued to reach successive new year-to-date 2010 peak levels, ending the day at 10.659%, up from Wednesday's 10.51%, the previous zenith for the year.

Advancing issues led decliners for an 11th consecutive session on Thursday, holding a roughly seven-to-five advantage for a third straight day.

Overall activity, represented by dollar-volume levels, fell 13% on Thursday, after having declined by nearly 17% on Wednesday.

A trader said, "We still had a good tone in the market" even though new-deals once again were the dominant factor, much as they had been over the past several sessions.

GM gains on CEO's optimistic talk

Traders noted that General Motors Corp.'s bonds were better in response to upbeat projections by the carmaker's new chairman that it will able to - eventually - repay all of the money it owes to Uncle Sam.

One saw the 8 3/8% benchmark bonds due 2033 up ½ of a point at 31½ bid, 32 offered, while a second called the benchmarks up ¾ of a point on the day at 31 1/8 bid, 31 5/8 offered.

Another market source said a few small trades late in the session had dropped the bonds to below 31, leaving them in the red for the day, but said that just on a round-lot basis, they ended up about ½ of a point at 31¾ on volume of about $35 million.

GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 gained 1 point, a trader said, to break par and end at 100½ bid, 101½ offered, noting that Barclays Capital had upgraded the carmaker's New York Stock Exchange-traded shares to "outperform" from "market perform," boosting them by 57 cents on the day.

NewPage pop continues

A trader said that NewPage Corp.'s 10% notes due 2012 gained a point on the day, pegging the Miamisburg, Ohio-based coated-paper manufacturer's recently strong issue up again at 49 bid, 50 offered.

He said the company's 11 3/8% senior secured notes due 2014 were "up a couple of points [Wednesday], but were unchanged today" to go out at 91½ bid, 92½ offered.

At another desk, the 10s were quoted up 1 3/8 points on the day at 49½ bid.

The first trader said the better tone seen in the paper sector over the past day or two also helped sector peers like Verso Paper Corp. The Memphis-based manufacturer's 11 3/8% notes due 2016 were seen up a point at 89½ bid, 90½ offered.

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