Reader's Digest prices, Denbury plans mega-deal, Cooper-Standard jumps as plan filed

By Paul Deckelman and Paul A. Harris

New York, Feb. 2 - Reader's Digest Association successfully priced a $525 million offering of senior secured notes on Tuesday, the day's sole pricing in Junkbondland. When the Pleasantville, N.Y.-based magazine publishing and direct marketing company's new issue was freed for secondary dealings, the bonds moved up about a point or two.

The session also saw several upcoming new issues announced, chief among them being Denbury Resources Inc.'s $1 billion offering of 10-year senior subordinated notes. The Plano, Tex.-based energy exploration and production company's quickly shopped mega-deal was marketed to potential buyers during a Tuesday conference call, with pricing expected on Wednesday.

Another pricing on tap for Wednesday - out of that same oil and gas sector - is Crosstex Energy, LP/Crosstex Energy Finance Corp.'s $700 million issue of eight-year notes. Syndicate sources heard price talk emerge on the deal on Tuesday.

Along with energy, the communications sphere was a busy place on the primary side on Tuesday. Dutch data center operator InterXion Holding NV and Sable International Finance Ltd. -- a global unit of U.K. telecommunications provider Cable & Wireless plc - each announced deals and were heard to have begun roadshows for their respective offerings. Also hitting the road was U.S. telecom provider ITC^DeltaCom, which is marketing a six-year secured notes deal that was announced on Monday.

Another domestic telecom operator, Atlanta-based Birch Communications Inc. - whose $100 million offering of senior secured notes due 2015 had been on the forward calendar literally since the last decade, having been first announced back in November 2009 - was heard by primary sources to have opted instead for a strictly private placement transaction rather than a standard Rule 144A/Regulation S deal.

Away from the new-issue arena, wireless telecom operator Cricket Communications Inc.'s bonds were busily traded at firmer levels, spurred by news reports indicating that its corporate parent, Leap Wireless International, Inc., may be shopping itself around to potential buyers like AT&T, Verizon Wireless, or MetroPCS Inc.

Cooper-Standard Automotive Inc.'s several series of bonds were each seen up anywhere from 8 to 10 points on the session, after the bankrupt auto components company officially filed its Chapter 11 reorganization plan, which would give its bondholders a big chunk of the equity in the restructured company.

Reader's Digest prices $525 million

In Tuesday's primary market Reader's Digest Association, Inc. priced a $525 million issue of three-month Libor plus 650 bps seven-year floating-rate senior secured notes (B1/B) at 97.00, with a 3% Libor floor.

The notes were priced on top of price talk.

J.P. Morgan Securities Inc., Bank of America Merrill Lynch and Credit Suisse Securities were joint bookrunners.

Proceeds will be used to refinance debt.

The proceeds, together with an additional amount sufficient to pay the redemption price of the notes, plus accrued interest up to but excluding March 2, 2010, will be funded into an escrow account until certain release conditions are fulfilled. If the conditions are not fulfilled by Feb. 28, the notes will be redeemed at par plus accrued interest.

Crosstex sets talk

Meanwhile, in a deal to price on Wednesday, Crosstex Energy, LP and Crosstex Energy Finance Corp. set price talk for their $700 million offering of eight-year senior notes (B3) at the 9 3/8% area.

Bank of America Merrill Lynch, BNP Paribas Securities Corp., RBC Capital Markets Corp., Wells Fargo Securities, UBS Investment Bank and Goldman Sachs & Co. are joint bookrunners for the debt refinancing deal.

Crosstex is a Dallas-based natural gas gathering, transmission, processing and marketing company.

Denbury bringing $1 billion

Elsewhere in Tuesday's primary market, the active forward calendar built meaningfully.

Denbury Resources Inc. plans to price $1 billion of 10-year senior subordinated notes (/BB/) on Wednesday.

JP Morgan, Bank of America Merrill Lynch, RBC Capital Markets, UBS Investment Bank and Wells Fargo Securities are joint bookrunners for the deal to fund the acquisition of Encore Acquisition, including the repayment of Encore debt.

Denbury is a Plano, Tex.-based oil and gas exploration and production company.

Cable and Wireless roadshow starts Thursday

U.K.-based Cable and Wireless plc will begin a roadshow on Thursday in Boston for a $500 million offering of seven-year senior secured notes (Ba2/BB).

The roadshow moves to the West Coast on Friday and New York on Monday.

Barclays Capital, BNP Paribas, JP Morgan and RBS are joint bookrunners.

Proceeds will be used to refinance debt and provide liquidity.

Cable and Wireless is a Bracknell, England-based telecommunications services provider to British Virgin Islands, Cayman Islands, Panama, Macau, Maldives, Monaco, Seychelles, the Falkland Islands, St. Helena, Turks and Caicos Islands, Anguilla, Guernsey and Bermuda.

The deal is being marketed to both high-yield accounts and emerging market accounts.

ITC^DeltaCom starts roadshow

ITC^DeltaCom started a roadshow on Tuesday for a $325 million offering of six-year first-lien senior secured notes.

Credit Suisse and Jefferies & Co. are joint bookrunners.

Proceeds will be used to repay bank debt and for general corporate purposes.

The company is a Huntsville, Ala.-based voice, data and internet services provider.

InterXion to sell €200 million

Also on Tuesday, Netherlands-based InterXion Holding began a roadshow in London for a €200 million offering of seven-year senior secured fixed-rate notes (/B-/).

Citigroup, Bank of America Merrill Lynch, Credit Suisse and Barclays Capital are joint bookrunners.

Proceeds will be used to repay the revolver.

InterXion is a Tupolevlaan, Netherlands-based provider of premium carrier-neutral data centers.

Reader's Digest on the rise

When the new Reader's Digest Association senior secured floating rate notes due 2017 were freed for secondary dealings, a trader saw then having moved up to 98 bid, 98½ offered - versus the 97 level where the $525 million of bonds had earlier priced - with most of the issue going to distressed debt oriented hedge funds, since the media company is currently in Chapter 11 reorganization, although it expects to emerge from there shortly.

A trader at another desk saw the new bonds at 98 bid, 99 offered.

Mixed views on Appleton issue

A trader saw the recently priced Appleton Papers Inc. 10½% senior secured notes due 2015 going out at 97¼ bid, 97¾ offered, this after the bonds had traded as low as the 96½ area on Monday. "Some weak hands got taken out, and it's moved back up," he said, "so now it's doing pretty well," estimating the bonds only about ½ point below the 98.035 level where the $305 million deal had priced on Friday to yield 11%.

"Those weak hands got taken out, and the bonds stabilized and moved back up" off their recent lows, he said.

Another trader, while noting that the bonds had fallen to a low on Monday of around 961/2, said that he only saw one round-lot trade of about $1 million down there, with the bonds edging back from those lows on Tuesday, tacking on about a point.

However, at another desk, a trader opined that the bonds still seemed to be having difficulty. While he saw them trading in a context up above 97 early in the session, "then they drifted in slightly," and he saw market participants hitting bids. He quoted them going out around 96 5/8 bid, 97 3/8 offered.

Yet another trader - who had quoted the bonds late Monday at 96¾ bid, 97¼ offered - said he had not seen any transactions on Tuesday.

New Libbey issue stays strong

There was no disagreement, however, on the continued strength being shown by Libbey Glass Inc.'s new 10% senior secured notes due 2015, which have hovered several points above their issue price since the Toledo, Ohio-based glass tableware maker's $400 million offering first priced last Thursday.

In Tuesday's dealings, a trader saw the bonds at 102 bid - up about ½ point from Monday's 101½ level, and about 4 points up from the 98.082 level where the bonds priced to yield 10½%.

Equinox emerges from obscurity

A trader saw Equinox Holdings Inc.'s recently priced 9½% second-lien secured notes due 2016 trading at 99 bid, 99½ offered, adding that he was "kind of surprised to see that."

After the New York-based fitness club operator's $425 million deal - upsized from the original $400 million -- priced back on Jan. 22 at 98.881 to yield 9¾%, sightings were relatively few and far between, and the bonds had mostly been quoted in the low 98 area, well below its issue price.

Jarden edges higher

Another blast from the past - relatively speaking - was Jarden Corp.'s 7½% senior subordinated notes due 2020. The Rye, N.Y.-based consumer products company had sold $275 million of the bonds, along with an identically-termed euro-denominated offering, pricing them back on Jan. 14, with the dollar offering coming to market at 99.139 to yield 7 5/8%.

In Tuesday's dealings, a market source saw the bonds having crept above par, with at least $10 million having traded.

Denbury existing bonds better

Ahead of Wednesday's scheduled new deal, Denbury Resources' existing bonds were seen better. A market source saw its 7½% senior subordinated notes due 2015 at 101 bid, up about ¼ to ½ point from previous levels.

Trader at another shop meantime saw "a couple" of large-sized trades Tuesday in Denbury's 9¾% subordinated notes due 2016 around the 106½ level, not much changed from Monday.

Williams Partners issue up after big debt sale

Traders saw the split-rated (Ba2/BBB-/BB) bonds of Williams Partners LP firm up after the Tulsa, Okla.-based natural gas company - formerly a wholly owned unit of Williams Cos. before its 2005 spin-off - successfully sold $3.5 billion of new senior unsecured debt in a three-tranche offering in the investment grade market.

A market source saw the company's 7¼% notes due 2017 gain some 4½ points on the session to end around the 114 level, with over $39 million of the bonds having changed hands. Activity was seen among both junk accounts and high-grade investors.

At another desk, the bonds were also quoted at that 114 level, but that was called slightly more than a 2 point rise.

While the 71/4s were busily traded, Williams Partners' 7½% notes due 2011 were seen little traded, with just one round-lot trade on the day, lifting the bonds to just under the 107 bid level up about 1½ points from where the bonds were quoted at the end of last week.

Market measures edge upward

Back among the established bonds with no new-deal connections, a trader saw the CDX Series 13 index up 3/8 point at 97 3/8 bid, 97¾ offered, after having gained 1/8 point on Monday.

The KDP High Yield Daily Index meanwhile rose by 7 basis points on Tuesday to end at 71.05, after having retreated by 4 bps on Monday. Its yield narrowed by 3 bps to 8.22%, after having widened by 2 bps the session before.

Advancing issues continued their see-saw battle with decliners on Tuesday, moving back ahead by a not-quite four-to-three margin.

Overall market activity, as measured by dollar-volume levels, jumped some 53% from Monday's pace.

Cricket bonds better on sale talk

Among specific names, Cricket Communications Inc.'s 9 3/8% notes due 2014 was perhaps the most actively traded junk bond on Tuesday, with over $39 million of that paper having changed hands. The bonds were seen going home bid just under 102, a gain of slightly more than a point.

Cricket's 7¾% notes due 2016 were up "a good 1½ to 2 points" as the bonds traded in a 102½ -103 3/8 context, with most of that trading taking place above 103. He saw more than $16 million of the bonds traded.

Cricket's 10% notes due 2015 gained a point to 103 bid, on "OK volume" of about $9 million.

"It's amazing how a story like that will kick up the volume," the trader said, referring to news accounts indicating that Cricket corporate parent Leap Wireless International was shopping itself around, although there has not been any official confirmation yet.

Those news reports - first in The Wall Street Journal and then in other media - said that Leap had hired Goldman Sachs and Morgan Stanley to help the company evaluate a possible sale. The report - attributing their information to anonymous sources said to be close to the situation - said that Leap has recently been in contact with such potential buyers as MetroPCS Communications, which like Leap is a provider of relatively low-cost pre-paid wireless services, as well as mainstream wireless giants AT&T Inc. and Verizon Wireless.

Back in 2007, MetroPCS made a failed attempt to acquire Leap, but stories linking the two periodically make the rounds of the financial market.

Cooper climbs as plan is filed

A trader said that Cooper-Standard Automotive's bonds were up about 9 to 10 points on the session, in busy trading, given a boost by the bankrupt Novi, Mich.-based auto components company's having filed its Chapter 11 reorganization plan with the Delaware bankruptcy court overseeing its restructuring. That plan envisions giving the company's bondholders a 25% ownership stake in the restructured company, with an option to buy up to 50% more.

He said that the company's 8 3/8% notes due 2014 - which had not traded on Monday but which closed out last week just under the 30 bid mark - were bid at 31 "first thing this morning, then 32-38, as someone lift the bonds to 38. And then, the march upward started."

By the time it was all over the bonds had finished at 41 bid, 42½ offered.

He said its 7% notes due 2012 started out at with $600,000 of the bonds trading at 111, and then "the next stop on the elevator was 120," where "a pretty good chunk of the bonds" traded. "Someone made an offering, and that's where all of the trading took place."

He saw the bonds ending the day at 119 bid, 119 3/8 offered.

"They came out with their plan - and that's when they [the bonds] just took off.'

Cooper-Standard announced Tuesday that it had entered into an equity commitment agreement with holders of the 7% and 8 3/8% notes, which will let the company conduct a rights offering for eligible senior and senior subordinated noteholders.

According to the terms of the filed reorganization plan, the company's debtor-in-possession and prepetition credit facility will be paid in full with cash. Holders of senior debt will receive 18.75% of the new equity in the company, as well as the right to participate in the offering for up to 45% of the new equity. Senior subordinated bondholders will get 6.25% of the new equity, along with warrants to purchase another 5% of the stock. Those holders can also participate in the rights offering, for up to 15% of the new common shares.

Cooper expects the plan will "significantly" de- lever its balance sheet, leaving it with about $430 million in debt, a $700 mill reduction from prepetition debt levels.

Elsewhere in the automotive area, a trader said that General Motors Corp.'s bonds were better, apparently helped by the news that the Detroit giant - still recovering from last year's bankruptcy restructuring -- saw a 16% sales increase in January, versus year-ago sales levels.

He saw GM's 8 3/8% benchmark bonds due 2033 firm to 29 1/8 bid on "pretty good volume," noting that "those things were slowly drifting down over the last week or so" to recent lows around 26½ or so. However, on Tuesday, they bounced back on "pretty good volume."

He saw GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 almost untraded on Tuesday - despite the Number-Two U.S. car producer's report of a 25% sales gain in January from a year ago.

At another desk, a trader said that the GM benchmark issue gained ½ point end at 28¾ bid, 29¾ offered, while Ford's long bond was unchanged at 87 bid, 89 offered.

-Stephanie N. Rotondo contributed to this report

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