Faurecia brings lone primary issue; Monier sets roadshow; Nokia bonds fall on downgrade

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., April 27 - Trading in the high-yield bond market was on the active side and mostly firm while a single new deal priced, a euro-denominated offering from French auto parts maker Faurecia SA.

"It was mostly an up day," one trader said. Another said, "Everything was up, clearly there are buyers everywhere."

Faurecia priced a quick-to-market €250 million issue of 8¾% seven-year senior unguaranteed notes at 99.974 to yield 8¾%.

Also in the primary, Monier Group plans a roadshow to start on Monday for its €250 million offering of seven-year senior secured notes.

Despite the slow Friday session for new deals, four dollar-denominated offers are on the forward calendar and are expected to price in the April-May crossover week.

Market indexes on Friday reflected the strength in the secondary market as the KDP High Yield index rose to 73.9 with a 6.56% yield. That compared to Thursday's reading of 73.73 with a 6.61% yield.

However, the nom du jour bucked the market trend, ending the day down at least 2 points.

Nokia Corp. received a rating downgrade from Standard & Poor's on Friday, which reflected the company's downward revision of revenues. The news pressured the company's debt, as did news that Samsung beat out Nokia as the world's top phone maker.

In earnings related moves, Clearwire Corp. paper was active. But the bonds were either up or down on the results released late Thursday, depending on whom you talked to.

Cemex SAB de CV also reported earnings Thursday and come Friday, paper was on the rise.

Even Marina District Finance Co. Inc. - better known as Borgata Hotel Casino & Spa - saw improvement after the company reported earnings Wednesday.

Faurecia prices at 8¼%

Faurecia priced a €250 million issue of 8¾% seven-year senior unguaranteed notes (B2//) at 99.974 to yield 8¾ %.

The quick-to-market deal was announced Thursday.

Global coordinator and joint bookrunner Credit Agricole CIB will bill and deliver. BNP Paribas, HSBC, Mitsubishi and Natixis also were joint bookrunners.

The Nanterre, France-based automotive equipment supplier plans to use the proceeds to reduce outstanding debt including the repayment of part of its revolver and to extend its debt maturity profile and diversify its sources of funding.

Monier starts Monday

Monier Group plans to start a roadshow on Monday for its €250 million offering of seven-year senior secured notes.

The roadshow wraps up Thursday.

J.P. Morgan, Deutsche Bank and Morgan Stanley are the bookrunners.

The Frankfurt, Germany-based supplier of roofing products and services plans to use the proceeds to refinance bank debt.

Earlier in the week, Europcar Groupe SA announced a €335 million offering of five-year senior subordinated secured notes (Caa1/B-) via Deutsche Bank, Credit Agricole, Goldman Sachs, J.P. Morgan, SG and Royal Bank of Scotland.

The roadshow continues Monday in London.

Also on Monday, J.P. Morgan is set to roll out a dual-currency dollar/euro offer from a company with a global presence in the services sector, a London-based sellside source said.

Although the issuer was not named, the deal is set to tour London, Edinburgh, Frankfurt and Paris during the first half of the week.

Coming this week

Although the dollar-denominated junk market yawned its way through the Friday session, it figures to get rolling again during the April-May crossover week with four dollar-denominated offers on the forward calendar.

Sabre Holdings is roadshowing a $400 million offering of seven-year senior secured notes via Goldman Sachs, Bank of America Merrill Lynch, Barclays, Deutsche Bank, Mizuho, Morgan and Natixis.

Formal price talk has yet to surface, but the deal was discussed with a yield in the high 8%-range, according to a trader from a high-yield mutual fund.

Affinity Gaming LLC is on the road with a $200 million offering of eight-year senior notes (/B/) via Deutsche Bank, J.P. Morgan, Jefferies and Macquarie.

The deal is set to price in the middle or late in the week ahead.

Also terms are expected on two deals carried over from the past week.

American Gaming Systems Inc. has been marketing a $150 million offering of five-year senior secured notes via Credit Suisse.

The deal, which ran a roadshow, is expected to price during the week ahead, informed sources said late Friday.

Although no formal price talk surfaced, it was discussed with a 12% cash coupon and a 2% PIK coupon, according to a buyside source.

Also MBI Energy Services, Inc. is expected to price its $250 million offering of eight-year senior notes (confirmed Caa1/expected B) during the April-May crossover week, an informed source said late Friday.

On Wednesday, the company made an upward revision to price talk on the deal, hiking talk to the 10% area from previous talk in the 9½% area.

The notes also underwent covenant changes.

RBC is the left bookrunner. Wells Fargo is the joint bookrunner.

Nokia takes a fall

Nokia paper was "getting crushed," a trader said, following a rating downgrade to junk from S&P.

He called the bonds down 2½ points across the board, pegging the 6 5/8% notes due 2039 at 80¾ and the 5 3/8% notes due 2019 at 861/2.

Another trader said the 2019 maturity got as low as an 84 handle before coming back to end around 86. The 2039s were in an "80-81 zip code," he added.

A third trader said the Nokia bonds saw the "most action" of any other security on the day. More than $100 million of the 5 3/8% notes traded, he said, down 2½ points to 861/4. About $53 million of the 6 5/8% notes changed hands, also down 2½ points at 811/4.

S&P cut Nokia's rating to B from A-3 with a negative outlook. The rating agency said the action was due to a lowered revenue guidance and downwardly revised profit and cash flow expectations.

Additionally, two separate industry reports out Friday showed that Nokia was ousted from its position as the world's best phone maker, only to be replaced by Samsung.

HIS iSuppli said that Samsung sold 92 million handsets in the first quarter, compared to Nokia's 83 million. The numbers were down 13% and 27%, respectively, from the fourth quarter.

Strategy Analytics meantime reported that Samsung snagged a 25.4% market share, while Nokia held a 22.5% share.

Nokia is based in Finland.

Clearwire improves earnings

Clearwire earnings improved in the first quarter of 2012, the company reported late Thursday.

The news resulted in a fair bit of action for the Bellevue-based company's debt, though traders were mixed as to whether paper had gained or lost.

One trader said the notes looked "a little lower" with the 12% notes due 2015 at 90 bid, 91 offered and the 14¾% notes due 2016 at 99 bid, 99½ offered.

But a second trader said the bonds were "up a couple points" post-earnings.

He pegged the 12% notes at 92.

For the quarter, Clearwire posted a loss of $182 million, down from $227 million the year before. The company also experienced a cash increase of $65.7 million.

Among other telecommunications names, Leap Wireless International Inc.'s 7¾% notes due 2020 were "active again," but in the "same sort of zip code" around 94, according to a trader. The company reported disappointing earnings on Thursday.

Also, Alcatel-Lucent USA's 6.45% notes due 2029 inched up a point to 74, a trader said.

Cemex paper rises

A trader saw Mexican cement manufacturer Cemex's bonds gaining ground after Thursday's earnings report.

He called the notes up 1½ points day over the day, seeing the 9% notes due 2018 at 94 and the 9¼% notes due 2020 at 91.

The struggling company managed to marrow its quarterly loss to $26 million in the first quarter of 2012. That compared to a loss of $229 million the year before. The improved numbers were due to a 4% sales increase.

Sales came to $3.5 billion. Overall, sales were up 35% in the United States, though sales dipped 11% in Europe.

The company also said that it was "confident" it could meet its ongoing debt obligations.

Borgata gets a boost

Borgata Hotel Casino & Spa's debt got a delayed boost Friday, as bonds traded up as much as 4 points.

A trader placed the 9 7/8% notes due 2018 at 981/2. Another trader said the gain was a delayed response to the company's Wednesday earnings release.

Net revenues at the Atlantic City casino were up 4% to $176.2 million, according to a release put out by parent company Boyd Gaming Corp. Gross operating profits increased almost 23% to $38.9 million.

Arch loses on asset sales

A trader said Arch Coal Inc.'s bonds were weaker Friday, following news out Thursday indicating the company is looking to make some asset sales.

He called the 8¾% notes due 2016 "down a couple points" at par 1/2, while the 7½% notes due 2020 dropped a point to 901/2.

Bloomberg reported Thursday that the coal producer had put up several of its thermal-coal mines up for sale and bids were expected to being arriving in late May. The sale is valued at around $600 million, if not more.

The St. Louis-based company is slated to put out its quarterly results on Tuesday. Analysts are expecting a loss of 17 cents per share on revenues of $1.12 billion.

Chrysler drives higher

Chrysler Group LLC's notes "keep cranking along," a trader remarked Friday.

He called the 8¼% notes due 2021 up another 1½ points at 104. The 8% notes due 2019 were up a point at 1041/4.

Another trader also saw the debt ending "up a little bit more," placing both issues around 104.

The automaker is based in Auburn Hills, Mich.

Momentive gains ground

Momentive Performance Materials Inc.'s paper was "better as the day wore on," according to a trader.

He saw the 9% notes due 2021 trade as high as 87.

Another trader called the issue up almost 2 points at 871/4.

The specialty chemical manufacturer is based in Columbus, Ohio.

$4.73 billion week

With no dollar-denominated deals pricing Friday, the new-issue market ended the final full week of April generating $4.73 billion of proceeds in 12 junk-rated dollar-denominated tranches. That's slightly less in terms of dollar amount than the previous week's $4.82 billion in 15 tranches.

Year-to-date issuance to Friday's close came to $119.25 billion in 247 tranches.

That's $2.22 billion shy of the $121.47 billion of 2011 issuance that priced in 282 tranches to the April 27 close.

However, it is $23 billion ahead of the $96.1 billion in 222 tranches that priced up to the April 27 close in the record-setting year of 2010.

Looking ahead aside from the announced deals on the calendar - the majority of which are set to price before Friday's close - the pipeline is not robust, market sources say.

"No one was talking about anything big for next week," a trader said late Friday afternoon.

Meanwhile a portfolio manager lamented that most of the business that is coming involves debt refinancing, which makes it more challenging to put cash to work because as investors get into the new paper, they are being taken out of existing notes.

"The LBO train is just not going right now," the investor said.

Private placements see inflows

Amid continuing news of inflows to the familiar leverage market investment classes, flows into the true private placement market also are robust, according to a private placements banker who took a call Friday.

In private placements, all the news is in the new-issue market, the banker said, noting that private placements did $50 billion in 2011 and is on par to top that mark this year.

The year-to-date has seen several transactions north of $700 million, the source recounted.

The most conspicuous recent mega-private came from foodservice company JRD Holdings, Inc., which brought $1 billion in late March.

The private placements secondary market is another matter altogether, said the banker, lamenting the secondary's present illiquidity.

What is moving in the aftermarket is distressed paper that the insurance companies - the main buyers in the asset class - are prohibited from owning.

Much of that is being scooped up by the hedge funds, the banker said.

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