Ancestry.com prices in quiet session as calendar builds; USI bonds ease; Inmet up on buyout offer

By Paul Deckelman and Paul A. Harris

New York, Dec. 17 - The high-yield market opened the last full trading week of 2012 on Monday on a quiet note, with just one deal worth $300 million priced. This was a far cry from the brisk pace seen last week, when over $13 billion of new paper came to market.

Online family history search engine Ancestry.com priced $300 million of eight year notes via Global Generations Merger Sub in connection with Ancestry's pending acquisition. The bonds did not trade in the aftermarket.

While that was the sole pricing of junk-rated, dollar-denominated paper, several other deals were either announced or just quietly appeared on investors' radar screens.

Media company IAC/InterActiveCorp. announced plans for a $500 million offering of 10-year notes.

Gulfport Energy Corp. said that it may sell bonds as part of the financing for its purchase of oil and gas assets announced on Monday.

Restaurant and gaming concern Landry's Holdings II, Inc. was heard by syndicate sources to be shopping $210 million of six-year notes. The Landry and Gulfport deals are expected to price on Tuesday.

The sources also said that Dispensing Dynamics International - a maker of bathroom soap and paper towel dispensers - will do a $125 million offering of secured notes.

However, they also heard that Sorenson Communications, Inc. had postponed its planned $400 million secured offering.

Traders saw the recent USI Holdings Corp. new issue, which just priced Friday, off by around a point.

The new Inmet Mining Corp. issue that priced last Thursday, though, firmed on the news that First Quantum Minerals had made a $5.2 billion offer to buy Inmet.

In the secondary market, statistical performance measures were mixed on the day.

Ancestry prices $300 million

Ancestry.com priced a $300 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 11%.

The yield printed 25 basis points beyond the wide end of the 10½% to 10¾% yield talk.

Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank and RBC were the joint bookrunners.

Proceeds, along with equity contributions from Permira IV, Spectrum Equity Investors, the rollover investors and the co-investors, will be used to complete the acquisition of the company and related transactions and to provide cash on hand to be used for general corporate purposes.

IAC moves up timing

IAC/InterActiveCorp. cut short a brief roadshow for its $500 million offering of 10-year senior notes (expected ratings Ba1/BB+) and will price the notes on Tuesday.

The deal was originally announced as Wednesday business.

J.P. Morgan, Goldman Sachs, Bank of America Merrill Lynch and BNP are the joint bookrunners for the general corporate purposes deal.

The prospective issuer is a New York-based internet company that reports revenue in search, personals, media and other areas.

Landry's five-year deal

The session also saw a couple of announcements on deals from Jefferies & Co.

Landry's Holdings II is planning to sell a $210 million issue of senior cash pay notes due Jan. 1, 2018 on Tuesday.

Proceeds will be used to fund a distribution to the parent company.

Dispensing Dynamics deal

Jefferies is also the bookrunner for an offer from Dispensing Dynamics, which plans to price a $125 million offering of five-year senior secured notes on Wednesday.

Proceeds will be used to refinance debt and fund a dividend to shareholders.

Opinions as to how much more activity the high-yield primary market will see during the brief remaining run-up to 2013 varied on Monday.

"You usually don't see many deals announced any later than Dec. 17," a senior debt capital markets banker said.

There are a couple out there that are awaiting documents, however, and they could come Tuesday or even Wednesday if everything falls into place, the banker added.

Another syndicate official, however, said that the window for getting deals done in 2012 is closing quickly and expressed doubts as to whether there will be further announcements regarding deals to be done before the end of the year.

Sorenson withdraws deal

Sorenson Communications withdrew its $400 million seven-year first-lien senior secured notes offer from the market, along with its $200 million seven-year term loan B.

One market source explained that the delay in marketing is because of an action pending by the Federal Communications Commission on CaptionCall, one of Sorenson's businesses.

J.P. Morgan, Goldman Sachs and Deutsche Bank were the joint bookrunners for the debt refinancing deal.

No action in Ancestry

The day's sole domestic junk market pricing - Ancestry.com's $300 million issue of eight-year secured notes - appeared too late in the day for any kind of real aftermarket, traders said.

Elsewhere among recently priced offerings, a trader said that USI Holdings' issue of 7¾% notes due 2021 "was one from Friday that's weaker."

He quoted the Briarcliffe Manor, N.Y.-based insurance and employee benefits products distributor's $630 million deal as being "wrapped around 99," down from their par issue price. After pricing, the bonds - issued via Onex USA Acquisition Corp. - had traded between 99 3/8 and par bid.

He added, "Everything else [among the new or recent issues] held onto their gains."

Inmet up on buyout bid

A trader said that "one name that really stood out today" was that of Inmet Mining, which priced $500 million of 7½% notes due 2021 on Thursday.

He said that the Toronto-based copper and zinc mining company's new deal was up on the news that another Canadian mining concern, First Quantum Minerals Ltd., which has been pursuing Inmet for some time, put a new, sweetened offer on the table, appealing directly to Inmet's shareholders.

He saw the notes firming to 101½ bid, 102¼ offered, calling that up about half a point from Friday's levels. The bonds had priced at par and then edged their way up to around the 101 bid mark by quitting time on Friday.

"I think the flippers are getting out of the way and the real buyers are coming in," he said.

He saw the company's established 8¼% notes due 2020 at 108¼ bid, 109¼ offered, although he said the latter bond issue was essentially unchanged.

Vancouver-based First Quantum has made several unsolicited offers for Inmet, which has so far rebuffed those advances.

Back in November, it had offered a reported $63.26 per share, which was rejected by Inmet's board. The same thing happened to its first improved offer, valued at C$70.00 ($70.85) per share.

First Quantum said late Sunday that it had again improved its offer, this time to C$72.00 ($72.87) per share. It is giving Inmet shareholders their choice of receiving all cash, all First Quantum shares or a mixture of cash and stock and said that the cash component of the offer would be financed through a combination of First Quantum's existing cash resources and a $2.5 billion acquisition facility, which is being arranged specifically to implement the offer.

Going around Inmet's reluctant board, First Quantum pitched its latest proposal directly at Inmet shareholders. The company said it had been in touch with several key shareholders, whom it did not name.

Inmet released a statement on Monday saying that it had not yet officially received First Quantum's latest offer. It urged its shareholders to take no action on the reported offer at this time, pending an official Inmet company response.

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