OPTI, Altra price; market awaits HealthSouth, Unitymedia, Landry's; GM jumps on repayment plan

By Paul Deckelman and Paul A. Harris

New York, Nov. 16 - OPTI Canada Inc. successfully brought a quickly shopped offering of senior secured notes to market on Monday, traders said, with the new bonds heard to have moved up modestly from the level at which they priced - and the company's existing bonds to have traded down several points ahead of the deal due to investors' subordination concerns.

Altra Holdings Inc. also priced during the session, with the Braintree, Mass.-based mechanical power transmission systems manufacturer's issue heard by high yield syndicate sources to have been upsized slightly from the originally announced amount. The new bonds were quoted solidly higher after their pricing.

Also on the primary front, new deals were announced for HealthSouth Corp. and Salem Communications Corp., with Birmingham, Ala.-based medical facilities operator HealthSouth's 10-year offering expected to price on Tuesday morning; price talk on that issue emerged during Monday's session.

Also slated for pricing on Tuesday, the syndicate sources said, is the big multi-tranche, dual- currency deal from German cable operator Unitymedia, the proceeds of which will be used to help finance the company's acquisition by Liberty Global. Price talk was heard on both the secured and the unsecured portions of the deal, with pricing expected during the morning hours in Europe.

Another deal for which price talk was heard and which is thought likely to come to market during Tuesday's session is Landry's Restaurants Inc.'s offering of six-year secured notes - although a major shareholder, 10% owner Pershing Square Capital Management, has come out against the going-private buyout deal by Landry's CEO Tilman Fertitta which the bond issue is supposed to help fund.

Easton-Bell Sports Inc., a Van Nuys, Calf.-based sports equipment producer, was heard to be hitting the road to market an offering of seven-year notes, with pricing expected by the end of the week.

In the secondary arena, apart from some lackluster trading in recently priced new issues like Revlon Consumer Products Corp. and Toys 'R' Us Property Company II LLC, traders said that activity was pretty dull, although General Motors Corp.'s bonds were better after the automotive giant reported a narrower quarterly loss and said it would soon start repaying billions of dollars in government loans.

OPTI above talk

In the Monday primary market, OPTI Canada Inc. priced a $425 million issue of 9% three-year first-lien senior secured notes (B2/B+) at 97.00 to yield 10.156%.

The yield came slightly wider than the 10% to 10 1/8% price talk.

Credit Suisse was the bookrunner for the quick-to-market deal.

Proceeds will be used to establish sufficient liquidity and flexibility for the company to proceed with its previously announced review of its strategic alternatives process.

Altra prices at tight end

Meanwhile Altra Holdings, Inc. priced an upsized $210 million issue of 8 1/8% seven-year senior secured notes (B1/B+) at 98.691 to yield 8 3/8% on Monday.

The yield printed at the tight end of the 8½% area yield talk. The issue price came in line with the 1 to 1.5 points of discount talk. The deal was increased from $200 million.

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

Proceeds will be used to repurchase or redeem Altra's 9% notes and to repay the revolving credit facility of TB Wood, which Altra acquired in spring 2007.

Upsized Unitymedia deal talked

Meanwhile the stage was set for a busy week, as the primary plows through the final full week of November, heading toward what is expected to be a much quieter three-session pre-Thanksgiving week, ahead.

Unitymedia set price talk on Monday for its upsized three-part euro- and dollar-denominated notes offer.

The upsized Unitymedia Hessen GmbH €1.95 billion equivalent of eight-year senior secured notes (B1/BB-), expected to come in tranches of €1.4 billion and $825 million, are talked at the 8½% area. The eight-year notes will become callable in three years at par plus the full coupon. The dollar-denominated tranche was upsized from $750 million. The overall size of the secured portion of the deal was upsized from €1.9 billion.

The upsized Unitymedia GmbH €650 million of 10-year senior unsecured notes (B3/B-) are talked at the 10% area. The 10-year notes become callable in five years at par plus half the coupon. The unsecured notes tranche was upsized from €600 million

Both tranches are expected to price at discounts of between 1.5 and 2.5 points.

Pricing is set for Tuesday morning, London time.

Credit Suisse, Deutsche Bank Securities, Goldman Sachs and JPMorgan are joint bookrunners for the deal to help finance the acquisition of the German cable firm by Liberty Global, in a transaction valued at $2.98 billion.

Landry's talks $390 million

Landry's Restaurants Inc. set price talk for its $390 million offering of six-year senior secured notes (expected ratings B3/B), and moved up timing, on Monday.

The notes are talked to yield 12% area, including about 1.5 points of original issue discount.

Books close at 10 a.m. ET on Tuesday, with the notes expected to price after that.

The roadshow was initially set to conclude on Friday.

Jefferies & Co. and UBS Investment Bank are joint bookrunners.

HealthSouth talks $290 million

Meanwhile HealthSouth Corp. set price talk for its $290 million offering of 10-year senior notes (expected Caa1/CCC+) at 8¼% to 8½% on Monday.

Pricing is set for Tuesday morning.

JP Morgan, Barclays Capital and Goldman Sachs & Co. are joint bookrunners for the debt refinancing.

Easton-Bell begins roadshow

The pre-Thanksgiving forward calendar continued to build during the Monday session.

Easton-Bell Inc. began a roadshow for its $325 million offering of seven-year senior secured notes.

The roadshow wraps up on Friday, and the notes are expected to price afterwards.

JP Morgan and Wells Fargo Securities are joint bookrunners.

Proceeds will be used to repay bank debt and redeem the company's subordinated notes.

Salem starts marketing Tuesday

Elsewhere Salem Communications Corp. will begin a roadshow on Tuesday for its $300 million offering of seven-year senior secured second-lien notes (expected ratings B2/B).

The deal is set to price early next week.

Bank of America Merrilll Lynch and Barclays Capital are joint bookrunners for the debt refinancing deal.

OPTI Canada offering at wide level

A trader saw OPTI Canada's new 9% senior secured first-lien notes due 2012 having traded up slightly from their issue price at 97 bid. He quoted the bonds trading at a wide 97½ bid, par offered level.

Existing OPTI paper pummeled

The company's existing paper, meantime, was seen trading down by several points on investor angst over its subordination to the new first-lien notes.

A trader saw that paper as "pretty active today," with its 8¼% notes due 2014 falling as low as 78½ bid from the levels around 83-83½ at which the bonds had traded last week.

"They traded a lot of bonds today," he said, noting that they moved between that 78½ low and a high of 81¼ near the day's end, "so they were down, but kind of in a wide range."

He pointed out that the 8¼% bonds are a second-lien issue - meaning they would rank behind the new deal in any kind of a recovery scenario.

A second trader said that there was "pretty good volume" in the OPTI Canada paper, with some $36 million of the 8¼% notes having traded in a 781/2-82 context, well down from 83 bid, 83¾ offered on Friday. He too noted that the bonds "moved up a little from their early lows."

A market source at another desk meantime saw OPTI Canada's 7 7/8% notes due 2014 trading in the upper 70s, but while noting that volume was greatly below that of the 8¼% notes -- just $7 million having changed hands at mid-day, opposed to over $20 million, at that point, of the 81/4s.

New Altra paper advances

A trader saw the new Altra Holdings Inc. 8 1/8% senior secured notes due 2016 having moved up to 100¼ bid, 100¾ offered.

Earlier, the company had priced its $210 million of the bonds - slightly upsized from the originally announced $200 million - at 98.691 to yield 8 3/8%.

HealthSouth bonds unchanged on offering

A trader said he saw no trading in the HealthSouth floating-rate notes due 2014, which are to be taken out using the proceeds from the company's new deal. "Nothing traded in that bond."

He also saw the company's fixed-rate 10¾% notes due 2016 quoted at 108½ bid, and looking for an offer, but opined that he did not see any of the bonds trading.

Another trader likewise saw no trading in the floaters on Monday; that had traded "somewhere between 99 and par last week," he said.

As to the fixed-rate paper, like the 103/4s he also saw no trading on Monday, estimating the market before the deal was announced was in a 1081/2-109 context.

Landry's paper languishes

A trader saw "nothing going on today" in Landry's Restaurants' 14% notes due 2011 ahead of the company's pending new deal. Those existing bonds, he said, had traded last week around the 100 7/8 level "a couple of times."

Revlon is relatively quiet

A trader said he last saw the new Revlon Consumer Products 9¾% notes due 2015 at 100½ bid, and "looking [for offers]." He noted that was a mid-morning quote - and he saw no further sign of trading in the New York-based cosmetics company's $330 million issue.

Revlon "disappeared," a trader said, seeing them having traded at 100½ bid during the morning, "but I never saw a right side."

A second trader said that the paper had traded at 100 5/8 bid, 100 7/8 offered, although "out of the blue" the bonds did firm a little beyond that to the 100 7/8 area.

Those bonds had priced Friday at 98.90 to yield 10%, and they had firmed in initial aftermarket dealings later that session to around 1003/4.

He suggested they "probably are still in that 100¾ -101 range."

Columbus a no-show

A trader said he had seen no trades in Columbus International Inc.'s new 11½% notes due 2014, some $450 million of which had priced at par on Friday. He suggested that the Bridgetown, Barbados-based international undersea cable operator's new bonds "was pretty much put away, pretty well."

Another trader suggested the new issue "has been laying low."

Antero deal mostly absent

A trader saw Antero Resources Finance Corp.'s new 9 3/8% senior notes due 2017 in the morning at 100¼ bid, 101¼ offered, but with "no trades."

The Denver-based energy exploration and production company had priced its $375 million of the bonds - upsized, first from the originally envisioned $300 million and later, from $350 million - on Thursday at 99.299 to yield 9½%.

Toys 'R' Us little traded

A trader said there was little going on in the new Toys 'R' Us 8½% senior secured notes due 2017, quipping "that one is in bond heaven."

He quoted then at "just under par," which he said was "probably unchanged" from the levels seen at the end of last week.

Another trader saw the bonds at 99 5/8 bid, par offered.

The Wayne, N.J.-based specialty retailer had priced $725 million of the bonds - up from the initially announced $650 million - last Tuesday at 98.573 to yield 8¾%, and they had moved up to just below par in initial secondary dealings, and had stayed there.

Market indicators turn positive

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up ¾ point at 93¾ bid, 94¼ offered on Monday, after having been off ½ point on Friday.

Meanwhile, the KDP High Yield Daily Index was 6 basis points better on Monday, at 69.64, after having risen 4 bps during Friday's dealings. Its yield narrowed by 3 bps Monday to 8.60%, after having come in by 1 bp the previous session.

In the broader market, advancing issues led decliners for a third consecutive session on Monday, by a ratio of three to two, versus the four-to-three advantage which they had held on Friday.

Overall market activity, as measured by dollar-volume, fell 24% from Friday's pace.

"It was a very unactive day here," a trader said, "a very quiet day. As with the equity markets" - which were solidly higher on rebounding retail sales and a declining dollar and higher gold and commodity prices - "the bond market continued to move up."

He said there was "no real sector that really benefitted from this rise - it was just all across the board." He said that "a lot of the paper at the short end [of the curve] traded up, as you would suspect," but saw "nothing in particular" standing out.

"Just across the board, the market was firmer."

"I don't understand how you can buy some of the stuff, how rich it was trading - but people did."

The trader further said that "we'll see what happens" the remainder of the week - the last full trading week before next week's Thanksgiving Day holiday, which will shutter the market next Thursday and produce an early market close on the Friday immediately following. Activity is expected to start winding down well ahead of next Thursday, "as everybody gets in as vacation mode next week." He expressed the hope that Tuesday would be "much busier" than Monday.

A second trader said that "within an hour or two this morning, it [actually] felt kind of like Thanksgiving week, it was that kind of slow and quiet," although things picked up a little later on. He called the session "a strange little time."

Another trader, while seeing the same kind quiet, fragile market, said that "we thought it was going to open up a little weaker, despite the equity market, because some of the indices [Monday morning] were soft." However, he called the overall market up ¼ point or so on the day."

GM jumps on smaller loss, debt plans

A trader said that General Motors Corp.'s 8 3/8% benchmark bonds due 2033 were "up a lot," estimating them at 21 bid, 22 offered, a gain of some 4 to 5 points, after the auto giant released its latest financial results, which included a $1.2 billion loss - sizable to be sure, but far less than the red ink seen earlier in the year, before the company's whirlwind bankruptcy reorganization - claimed its long sales decline was stabilizing, and said that it would begin paying back $8.1 billion of government loans ahead of schedule.

"A lot of the action this morning was in GM bonds being up," another trader said, after the company said it was "losing less and will pay back more."

He saw the benchmark bonds bounce around between a low of 16½ early in the day and a high of 22 1/8 later on, with a total of $51 million having traded, making the issue one of the busiest of the day on Trace.

He said the $3 billion issue "seemed to be the one you saw quoted or trading the most."

"For the last couple of weeks, they pretty much were anywhere between 15 and 161/2," he said, and then traded on Friday up around 171/2, but by the close Monday, he saw the last trade above 20, "so they had a good couple of points bounce [on the news] and then ended in about 1½ point from their highs."

Elsewhere in the autosphere, GM's domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 gained a point to end at 84½ bid, 85½ offered, a trader said.

Ply Gem pop seen about over

A trader said that Ply Gem Industries Inc. bonds - which had firmed smartly on Friday after the company put out numbers and announced progress on increasing liquidity - were firm, but on much less activity than was seen on Friday.

A trader quoted the company's 9% subordinated notes up two points from Friday at around 77-771/2, which he said was 5 points better than the bonds had been on Thursday, before the numbers came out. However, he said, there was "not a lot of activity" in the credit.

He also saw Ply Gem's 11¾% notes due 2013 trading as high as 97, but mostly hanging around a 96¾ level, which he called essentially unchanged from Friday, when those bonds had jumped more than 4 points from the lower 90s into the mid-90s.

A second trader agreed that there was "not a lot of quoting going on" in the 9s adding that Trace volume was only about $2 million. He also saw them in a 77-77½ context, versus 72½ on Thursday, "the last time these things were reported trading."

He saw the 113/4s between 961/4-963/4, but said Trace volume was only about $6 million, versus more than $43 million that traded on Friday between 94 and 97. He noted that the last Friday trade, at 961/2, "was right in the middle of where they were trading today, pretty much unchanged."

The bonds, he said, "had their pop on Friday."

Ply Gem said on Friday that third-quarter net income was $4.4 million, versus a year-earlier net loss before unusual items of $4.1 million; meanwhile, adjusted EBITDA for the 2009 third quarter was $57.6 million, up from $41.9 million for the third quarter of 2008.

Company executives also reported during their post-numbers conference call that Ply Gem had increased liquidity by more than $44 million during the third quarter and has since further boosted its liquidity balance through the private placement of $25 million of 11¾% senior secured notes due 2013.

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