Brigham, Orion Cable offerings price; Solo Cup gyrates, Technical Olympic rebounds

By Paul Deckelman and Michelle Anderson

New York, March 30 - Activity in the high yield primary market dwindled Friday, with one smallish add-on bond offering seen having priced, along with a euro-denominated PIK loan deal.

Late in the session, Brigham Exploration Co. priced a $35 million add-on to its existing 9 5/8% notes due 2014, while earlier European issuer Orion Cable GmbH had priced an upsized €400 million PIK loan issue.

Traders said that secondary market activity was mostly muted - and that things are likely to be even duller in the coming week, which will start with a lot of people taking an early exit Monday ahead of the Passover holiday that begins that night and continues through Tuesday and Wednesday, and which will conclude with a greatly truncated bond market session - ending at mid-morning ET - on Friday, with the equity markets shuttered for Good Friday.

Among the issues which were actually doing anything, Solo Cup Co.'s notes plunged after the Highland Park, Ill.-based maker of disposable cups and plates announced its quarterly results - but bounced most of the way back after a reassuring conference call.

Technical Olympic USA Inc.'s bonds continued to bounce back from their recent depths for a second straight session.

Brigham prices add-on

Austin, Tex.-based independent oil and gas exploration and production company Brigham Exploration priced an upsized, quickly shopped add-on offering to its existing 9 5/8% senior notes due 2014 (Caa2/CCC+) on Friday evening.

That $35 million deal had been increased from the $25 million which the company had said earlier in the day that it would price.

The new bonds priced at 99.5, to yield 9.721%, at a spread of 516 basis points over the interpolated Treasury issue due May 1, 2014.

Junk market primary sources said that the Rule 144A/Regulation S deal came to market via joint bookrunners Banc of America Securities and Credit Suisse. The two investment banks played similar roles on the original tranche of the bonds, which were sold in April 2006.

Brigham - which applies 3-D seismic imaging and other advanced technologies to systematically explore and develop onshore domestic natural gas and oil provinces - said that it intends to use the net proceeds from the offering to repay amounts outstanding under its existing senior credit agreement, and for general corporate purposes.

Orion prices upsized PIK offering

Earlier in the session, German cable systems operator Orion Cable GmbH was heard to have priced an upsized €400 million PIK facility at 99, in line with pre-deal market price talk.

The offering carries an interest rate of 1175 basis points over Euribor, also in line with market expectations,

It was upsized from the originally anticipated €365 million.

Credit Suisse was the bookrunner on the deal, which will be issued through Orion Cable's corporate parent, Escaline Sarl.

Proceeds will fund potential acquisition and will be used to refinance existing debt and buy out a minority shareholder.

Another $2 billion week

That was the only activity seen in the new-deal market on Friday - in contrast to the busier tone seen earlier in the week, when offerings were priced for such issuers as Service Corp. International, which brought a $400 million two-part deal to market on Wednesday, and Steel Dynamics Inc., which priced an upsized $500 million deal that same session.

Other issues which priced during the week included an upsized $150 million offering Monday for Sterling Chemicals Inc., Tuesday's $250 million deal for Advanced Medical Optics Inc. and Coleman Cable Inc.'s $120 million add-on offering, both of which were upsized, and two pure junk deals Thursday - a rare downsized deal of $350 million for Matrix Acquisition Inc./MacDermid Inc., and an upsized $150 million for Denbury Resources Inc., as well as a split-rated (Baa3/BB) issue for El Paso Natural Gas Co.

All told, new-issuance totaled around $2 billion for the second straight week, and as the month, and the year's first quarter, ended, some $46.47 billion of U.S. high yield market issuance had been recorded - a respectable pace of activity which, if extrapolated over a full year, could produce even more issuance than last year's record $157 billion-plus tally of dollar-denominated issuance.

Two big deals seen

April is expected to begin off with a bang, with two big deals officially calendared for the month's first week - Realogy Corp.'s massive $3.15 billion multi-part offering via joint bookrunners JP Morgan, Credit Suisse, Bear Stearns and Citigroup, was well as Pharmaceutical Technologies and Services $865 million equivalent dollar-and euro-denominated two parter, coming to market via joint bookrunners Morgan Stanley, Goldman Sachs, Banc of America Securities and Deutsche Bank.

However, one complicating factor could be the thinness of the market, in view of the aforementioned holiday-time absences of many participants between the Passover and Palm Sunday/Easter Week observances. One California-based market participant noted, only half-jokingly, that "the number of 'I am out next week' [e-mail] messages that started coming at 10 a.m. West Coast time, was alarming."

MacDermid/Matrix holds gains

The new Brigham Exploration 9 5/8% notes due 2014 priced too late in the session for any kind of aftermarket action.

The new Matrix Acqusition/MacDermid 9½% senior subordinated notes due 2017 that priced at par on Thursday and then immediately moved up to around the 102 bid area were seen hanging onto those impressive gains Friday, and maybe even adding to them, holding around 102.5 bid, 103 pretty much all day.

Solo bounces around

Back among the established issues, Solo Cup "didn't do so good," a trader said, "but recovered later in the day," its 8½% notes due 2014 falling to 82.5 bid, 83 offered from prior levels around 85 after the release of the company's quarterly results.

"People were hitting bids," driving the bonds down further, but "by the end of the day, they were back up," around 85 bid, 85.5 offered. "They did have their conference call, after their 10-K [annual report] was released, and that helped a little bit."

Another market participant was "surprised" at the difference he saw in markets on Solo's bonds. He saw the 81/2s at 82 bid, 84 offered in the morning, but then reported seeing them a while later at 85 bid, 86 offered. He added that the notes last traded at 85.5, up slightly from the previous day's close at 85.25.

"So no real change, but there was a decent amount of volume," he said.

Yet another trader agreed that Solo showed "a lot of volatility," falling 4 points to a low around 81 during a "20-minute window of weakness" following release of the numbers, "but the company was able to stabilize, post-conference call."

The company reported net sales of $2,489.9 million for the fiscal year ending December 2006. The figured compared to net sales of $2,431.6 million for the fiscal year ending January 2006.

Earlier in the week, the provider of disposable food service products announced that it had sold approximately 118 acres of the former United States Steel property in Chicago to Southworks Development LLC. The terms of the deal, expected to close on Nov. 30 upon approval by the city of Chicago, were not disclosed.

Technical Olympic comeback continues

For a second straight session, battered Hollywood, Fla.-based homebuilder Technical Olympics' bonds - which gained as much as 5 points during Thursday's session - continued to bounce back after having fallen sharply over the several previous days.

The name was "up a lot," a trader said. "They really bounced back a lot," with its 10 3/8% notes due 2012 up 4 points to end around 75.

Another trader saw the company's notes "up pretty nicely" from their recent lows, quoting the senior bonds as having pretty much come back and regained all of the ground they lost earlier on market angst about the company's prospects in a weakened housing market. The 9% notes due 2010 ended at 94 bid, 94.5 offered.

Its 7½% notes due 2011 ended around 73 bid, 74 offered and its 7½% notes due 2015 around 71 bid, 72 offered.

"Last Friday [i.e. a week earlier], they were maybe ¼ point better. But certainly, in between, there were plenty of gyrations."

Stephanie N. Rotondo contributed to this report.

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