Clearwire mega-deal leads $2.75 billion day; AMD slates bonds, existing debt firms on call

By Paul Deckelman and Paul A. Harris

New York, Nov. 18 - Clearwire Communications LLC/Clearwire Finance Inc. priced an upsized $1.6 billion offering of six-year senior secured notes late in the session on Wednesday, topping off another busy day in the high-yield primary marked by issuers hurrying to get their financing needs done before the inevitable end-of-year lull in activity.

Besides that mega-deal from the Kirkland, Wash.-based wireless broadband services provider, the day also saw pricings from Stonemor Operating LLC, TRW Automotive Inc., Cascades Inc. and Graham Packaging Co. LP/GPC Capital. Of all of those, only the smallish Stonemor deal actually came to market in time for any kind of secondary dealings. The other three - all of them opportunistically timed, quickly shopped offerings which had only been announced by their respective issuing companies on Wednesday morning - priced too late in the day for any aftermarket activity.

High yield syndicate sources meantime saw two other deals join the forward calendar. Advanced Micro Devices Inc. announced plans to tender for $1 billion of its convertible notes and call its $390 million of outstanding junk bonds for redemption next month, and will partially pay for those transactions with the proceeds from a $500 million eight-year junk deal it announced Wednesday. Sources said the Sunnyvale, Calif.-based computer-chip maker began a roadshow for that deal, which is expected to price next Monday or Tuesday.

And Norcraft Holdings, LP was heard to be shopping a senior secured note offering of as-yet undetermined size, to fund a tender offer for its existing bonds announced Wednesday by the Eagan, Minn.-based maker of kitchen and bathroom cabinetry.

Among deals already on the calendar, price talk emerged on the issues being shopped by JohnsonDiversey, Inc. and Koppers Inc., with the former bonds expected to price on Thursday morning and the latter offering seen coming to market on Friday morning. Talk was also heard on a benchmark-sized euro-denominated issue deal from Spanish engineering and bio-energy company Abengoa SA.

Among outstanding bonds, AMD's 7¾% notes due 2012 firmed smartly in heavy trading on the news that the Silicon Valley company plans to take out those bonds via a redemption call on Dec. 18.

Apart from companies with new-deal connections, there was once again brisk upside activity in General Motors Corp.'s bonds, particularly its benchmark 2033 issue, which continued to firm in the wake of the giant automaker's relatively favorable quarterly numbers and its government loan-repayment plans.

Clearwire upsizes

In total, the busy high-yield primary market saw six tranches of notes priced by five different issuers, totaling more than $2.75 billion and C$200 million on Wednesday.

Clearwire Communications LLC priced an upsized $1.6 billion issue of 12% six-year senior secured notes (B3/B+) at 97.921 to yield 12½%.

The yield printed atop the yield talk. The issue price came within the context of the approximately 2 points of discount talk. Clearwire increased its deal from $1.45 billion.

J.P. Morgan Securities Inc., Bank of America Merrill Lynch, Morgan Stanley & Co. and Jefferies & Co. were joint bookrunners

Cascades two-part drive by

Meanwhile Cascades priced two upsized tranches of 8% senior notes (Ba3/B+) in a quick-to-market deal.

The Kingsey Falls, Quebec-based packaging and tissue products manufacturer priced a $500 million tranche of eight-year notes at 98.534 to yield 8%.

The yield printed on top of yield talk, while the issue price came within the context of the approximately 1.5 points of discount talk.

The tranche was upsized from $300 million.

Bank of America Merrill Lynch, Wells Fargo Securities, Scotia Capital and Goldman Sachs & Co. were joint bookrunners.

Cascades also priced and upsized a C$200 million tranche of seven-year notes at 98.67, also to yield 8%.

Once again, the yield printed on top of yield talk, while the issue price came within the context of the approximately 1.5 points of discount talk.

The seven-year notes tranche was upsized from C$150 million.

Scotia Capital, NBF and Bank of America Merrill Lynch were joint bookrunners.

Proceeds will be used to fund a tender for the company's notes maturing in 2013, to repay other debt and for general corporate purposes.

Graham Packaging drives by

Elsewhere Graham Packaging Co. LP and GPC Capital Corp. priced a $253.376 million issue of 8¼% eight-year senior notes (Caa1/CCC+) at 98.667 to yield 8½%.

The yield printed atop price talk.

Deutsche Bank Securities, Citigroup and Goldman Sachs & Co. were joint bookrunners for the quick-to-market issue.

Proceeds, along with cash on hand, will be used to redeem the full $250 million the York, Pa.-based molded plastic container manufacturer's existing 8½% senior unsecured notes due 2012.

TRW brings $250 million

TRW Automotive priced a $250 million issue of 8 7/8% eight-year senior notes (Caal/B-) at 99.292 to yield 9%.

The deal priced on top of price talk.

J.P. Morgan, Bank of America Merrill Lynch, Deutsche Bank Securities and Goldman Sachs & Co. were joint bookrunner for the quick-to-market debt refinancing and general corporate purposes deal.

Stonemor atop price talk

Finally, StoneMor Operating priced a $150 million issue of 10¼% eight-year senior notes (B3/B-) at 97.352 to yield 10¾%.

The yield printed on top of the yield talk. The issue price came cheap to discount talk of 1 to 2 points.

Bank of America Merrill Lynch was the bookrunner for the cemetery company's debt refinancing deal.

Talking the deals

Meanwhile issuers and their dealers set price talk for some of the remaining business expected to price by Friday's close.

JohnsonDiversey set price talk for its $400 million offering of 10-year senior notes (expected B3/expected B-/confirmed B-) at the 8½% area.

The deal is expected to price on Thursday morning.

Goldman Sachs & Co. is the left lead bookrunner. Citigroup Global Markets Inc., Barclays Capital Inc., HSBC Securities and J.P. Morgan Securities Inc. are joint bookrunners.

Also, Koppers Inc. and Koppers Holdings Inc. talked their $300 million offering of 10-year senior notes (B1/B) at the 8¼% area, on Wednesday.

The order books are closed, with the exception of West Coast accounts for whom the books close at 5 p.m. PT on Thursday.

Pricing is set for Friday morning.

Goldman Sachs & Co., Bank of America Merrill Lynch, RBS Securities Inc. and UBS Investment Bank are joint bookrunners.

AMD starts roadshow

Advanced Micro Devices started a roadshow on Wednesday for its $500 million offering of eight-year senior notes (expected ratings B2/B-).

The roadshow wraps up on Monday, and the deal is expected to price on Monday or Tuesday.

JP Morgan and Citadel Capital are joint bookrunners.

Proceeds, along with existing cash, will be used to fund the tender for the Sunnyvale, Calif.-based computer technology company's 5¾% convertible senior notes due 2012. Remaining proceeds, if any, will be used for general corporate purposes.

Clearwire, others come too late to trade

The big Clearwire deal, as well as the more modest offerings from TRW, Graham Packaging and Cascades, priced too late in the session for any kind of an aftermarket, participants said.

A trader said earlier in the session "we've been waiting all day" for the Clearwire offering, expressing puzzlement and chagrin as to why the six-year mega-deal had not yet come to market, since price talk on the issue had surfaced during Tuesday's session, and the deal was expected to have priced early in the afternoon .

"Supposedly, the books closed early, so we're scratching our heads" over why it was taking so long, he said.

In fact, pricing terms on the deal were not circulating around Junkbondland until well after 6 p.m. ET - long after trading had wrapped up for the day.

Small Stonemor seen firmer

That left only the Stonemor deal, which had come to market earlier in the session, able to trade around on Wednesday afternoon.

A trader said that the Bristol, Pa.-based deathcare company's 10¼% notes were last seen at 98½ bid, leaving them up more than a point from the 97.352 level at which the deal had priced.

Earlier, he said, there had been an offering at 99, but "I'm not sure that's there anymore."

Another trader, noting the small size and illiquidity of the Stonemor deal, confidently predicted: "I doubt that we'll see it" trade around much.

Landry deal continues to lead

A trader saw Landry's Restaurants Inc.'s new $406.5 million issue of 11 5/8% senior secured notes due 2015 continuing to trade well above that Tuesday deal's issue price.

He quoted the bonds at 101 7/8 bid, 102 3/8 offered, versus the 98.427 level at which the Houston-based restaurant and gaming company had priced its issue - upsized from the originally announced $390 million - to yield 12%.

The bonds were also up from the 101¼ bid, 102 offered level at which they had been seen going home on Tuesday after their initial aftermarket dealings.

Unitymedia moves up

Also among the Tuesday pricings, a trader saw Unitymedia Hessen GmbH's $845 million of 8 1/8% senior secured notes due 2017 as having moved up to 99 5/8 bid, par offered going out.

That was improved from the 98¼ bid, 98¾ offered at which those bonds had been trading late Tuesday, and well up - the trader called it "a solid 2 points - from 97.844, where the German cable television company's deal, upsized from $750 million originally, had priced to yield 8½%, as part of a gigantic multi-tranche, dollar- and euro-denominated deal.

OPTI Canada off highs, but little seen

A trader saw OPTI Canada Inc.'s new 9% senior secured first-lien notes due 2012 moving around during the morning at 99¾ bid, 100½ offered., which he called "still up pretty good" from the 97 bid level at which the Calgary, Alta.-based energy exploration and production company had priced its $425 million deal on Monday to yield 10.156.

However, Wednesday's levels were considerably off the peak levels as high as 101¼ bid, 101¾ which the bonds had notched when they were freed for secondary dealings on Tuesday.

But the trader said that activity in the new energy credit had dwindled, noting that it "kind of disappeared. I haven't seen a market since this [Wednesday] morning."

HealthSouth continues to struggle

But alone among the recent deals, HealthSouth Corp.'s $290 million issue of 8 1/8% senior notes due in February of 2020 was seen still not able to gain any traction in the market.

A trader saw the Birmingham, Ala.-based healthcare facilities operator's new bonds at 97¼ bid, 98¼ offered - well down from the 98.327 level at which those bonds had priced on Tuesday to yield 8 3/8%.

AMD advances on call

The news that Advanced Micro Devices has called its 7¾% notes due 2012 for redemption next month, using the proceeds from its new bond deal, was seen giving those existing bonds a solid boost on Wednesday.

"They were well above par," a trader said. "A bunch of bonds traded around the 102 level today," right around their Dec. 18 call price of 101.938, "so there was some demand for those. They called them officially today, so you could still pay 102 and get a half-way decent money-market yield for the next 30 days, or, by the time you've settled, actually probably around 25 days."

"Today, most of the action was in AMD's 73/4s," another trader opined. "Pretty much all day long those things were trading," and "pretty much from the minute the call notice came out," they were up at 102-102 1/8.

"A boatload traded, once it became a yield-to- call type thing."

The AMD bonds were seen by a market source having firmed smartly to that take-out level just below 102 from Tuesday's close at 96½ bid, and from its most recent prior round-lot price of 97.25, seen at the end of last week. Activity was heavy in the issue, with a trader seeing over $30 million of the bonds changing hands.

Market indicators hold steady

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index unchanged on Wednesday at 93 5/8 bid, 94 1/8 offered, after having gained 3/8 point on Tuesday.

Meanwhile, the KDP High Yield Daily Index was unchanged on Wednesday at 69.65, after having gained 1 basis point during Tuesday's dealings. Its yield, however, narrowed by 7 bps Wednesday to 8.55%, after having widened by 2 bps the previous session.

In the broader market, advancing issues led decliners for a fifth consecutive session on Wednesday, with their winning margin three to two, widening their advantage from the four-to-three ratio seen on Tuesday.

Overall market activity, as measured by dollar-volume, rose nearly 29% from Tuesday's pace.

GM juggernaut rolls on

A trader said that General Motors's 8 3/8% benchmark bonds due 2033 once again traded up - their third straight session of gains, following the company's announcement earlier in the week of a smaller-than-feared third-quarter loss and its plans to begin paying back government loans ahead of schedule.

He saw the bonds trading around 24, up around a point from Tuesday's levels, early in the session, and said that "you had a pretty good amount of trading" in the credit. He said that during the session, the bonds went as low as 22 and as high as 251/4, before settling in around 23¾ bid for a last trade of the day.

"Once those started trading up around 24," he said, other credits in the GM capital structure firmed as well, with its 7 1/8% notes due 2013 advancing to a 23-24 context, and the 8¼% notes due 2023 trading up to 231/2.

"It was interesting," he continued, "because once you had the main bellwether, the '33s trading up, a rising tide lifts all boats."

Another trader saw the benchmark bonds trading around 24, and saw other GM paper better as well - the 7 3/8% bonds due 2048 were at 22¾ bid, while its 6 ¾% due 2028 at 22-23 "on some decent size.

"So most [GM issues] were solidly in the 20s."

A market source saw over $30 million of the GM benchmark issue traded as of mid-afternoon - well down from the estimated $50 million of the bonds that changed hands on Monday and $64 million on Tuesday, according to Trace, but still one of the busiest junk issues on the day.

Over this week's three sessions, so far, the GM bonds, led by the benchmark issue, have pushed up into the mid-20s area from long-held prior levels in the mid-teens, riding the upside momentum generated from Monday's announcement that the Number-One U.S. car producer will begin paying back $6.7 billion in U.S. government loans and another $1.4 billion in loans from the Canadian government by the end of this year - and the Detroit giant's projection that it could pay off that full amount of those loans as early as next year, a full five years ahead of schedule.

GM had further good news for the financial markets on Monday when it also announced that it lost $1.2 billion from the time it left bankruptcy protection in early July through the end of the calendar third quarter on Sept. 30, considerably better results than GM had reported in previous quarters and a sign that iconic auto manufacturer's fortunes are beginning to rebound.

DirecTV dominates actives list

A trader said that the day's busiest bonds were DirecTV Holdings LLC's 7 5/8% notes due 2016, over $30 million of which traded between 107 5/8 and 108.

While he said that there seemed to be no news out on the credit that would explain the brisk activity, later in the session, the announcement came down that the El Segundo, Calif.-based satellite television broadcaster had named former PepsiCo. Inc. vice-chairman Michael White as its new chief executive officer, finally filling a longtime vacancy. Chase Carey left that post five months ago to return to former employer News Corp.

Analysts were divided on whether the choice of White is a logical fit for the company - while he has extensive experience in many managerial areas, he has no actual background running a pay-TV service.

Meanwhile, DirecTV corporate parent Liberty Media Corp.'s shareholders are to vote Thursday on spinning off DirecTV into a separate company. Such a step could pave the way for an eventual sale, possibly to Verizon Communications Inc. or to AT&T Inc., each of which had previously expressed interest in acquiring that satellite broadcaster.

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