Midday Commentary: Primary slows; Darling expected to be a blowout; new First Data paper gains

By Paul A. Harris

Portland, Ore., Dec. 17 - With most - but not all - of the big dealers having cleared their 2013 new issue calendars, the Yuletide appears to be at long last settling into the U.S. high-yield primary market.

Sources in Europe were calling it a wrap as early as the latter part of last week.

"We don't expect any drive-bys for the rest of the year, but it's not impossible," one investor said on Tuesday morning.

Darling a blowout

Meanwhile there remains a modest 2013 deal calendar left to clear.

Darling International Inc. has a lunch Tuesday in Boston to discuss its $500 million offering of eight-year senior notes (B1) with investors.

The deal, via Goldman Sachs, JPMorgan and BMO, is expected to be talked later Tuesday in the 5½% area, according to a trader, who added that it is more likely to come at 5 3/8% in the end.

The deal is a blowout, sources say.

Books are set to close Wednesday.

Also in the market is Global Ship Lease Inc. with a $400 million offering of seven-year first-priority secured notes (expected B3/confirmed B) via Citigroup. That book is believed to be subscribed to around deal-size, a trader said.

Sierra Hamilton LLC is marketing a $110 million offering of five-year senior secured notes (B3/B-). The deal is talked to yield 12% to 12½%, market sources said on Monday. It could price later in the week, an informed source said on Tuesday morning. Lazard Capital has the books.

And Camac Energy Inc. is selling $300 million of five-year senior secured notes via Arctic Securities. There have been no updates since the beginning of the week, according to an informed source.

FDC tap trades higher

The First Data Corp. add-on paper to the company's 11¾% senior subordinated notes due Aug. 15, 2021 (Caa2/CCC+), which priced Monday at 103.5 to yield 10.863% in an upsized $725 million deal, has traded to a premium, a trader said on Tuesday.

The 11¾% add-on notes were 104 3/8 bid, 104 5/8 offered, the source said.

Meanwhile the new MGM Resorts International non-callable 5¼% senior notes due March 31, 2020 (B3/B+), which came at par on Monday, were wrapped around new issue price on Tuesday morning, at 99¾ bid, par 1/8 offered, a trader said.

The deal, which came sized at $500 million and was priced at the wide end of the 5 1/8% to 5¼% yield talk, traded as low as 99½ bid, 99 7/8 offered, the trader said.

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