Burger King deal beats talk; U.S., European deals price; new Breitburn up; energy names active

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., Oct. 1 - High yield investors continued to focus on new issues as the week came to a close with the primary maintaining its torrid pace.

The session saw issuers raise $1.4 billion and €510 million.

Overall the market was strong and traders said buyers remained more plentiful than sellers.

Breitburn Energy Partners LP released its new upsized offering of 10-year notes into the market. A trader said the bonds did very well, gaining at least a point upon the break.

AWAS Aviation Capital Ltd. also had a deal, but a trader opined that the new split-rated notes were not faring as well.

In the secondary universe, oil and gas names like Anadarko Petroleum Corp. and ATP Oil & Gas Corp. were among the more active credits. Both Anadarko and ATP closed the day mostly firmer than the day before.

Meanwhile, American International Group Inc. paper ended the week unchanged, just one day after the notes gained as much as 6 points.

OPTI Canada Inc.'s debt has been on the active side for most of the week, but with no news out, market sources are at a loss to explain why.

In the world of autos, an over 10% increase in monthly sales helped General Motors Corp.'s bonds trade actively and better, according to traders.

And, Blockbuster Inc.'s debt was holding its ground, as was Rite Aid Corp. bonds.

Burger King better than talk

Blue Acquisition Sub, a financing unit of Burger King Holdings Inc., priced a downsized $800 million issue of eight-year senior notes (Caa1/B-) at par to yield 9 7/8%.

The yield priced 12.5 bps lower than the 10% to 10¼% price talk. The size was reduced from $900 million, with $100 million shifted to the bank financing for the transaction.

A planned euro-denominated carveout from the initial $900 million amount was abandoned.

J.P. Morgan Securities Inc. and Barclays Capital Inc. were the joint bookrunners.

Proceeds will be used to help fund the leveraged buyout of the Miami-based fast food hamburger chain by 3G Capital.

Associated Materials moves up timing

Meanwhile Associated Materials, LLC moved up timing on its $730 million issue of seven-year senior secured notes (B3/B) and priced the deal at par to yield 9 1/8%.

No price talk circulated, according to a market source.

The deal had previously been expected to price early in the week ahead.

Deutsche Bank Securities Inc., UBS Investment Bank and Barclays Capital Inc. were the joint bookrunners.

The Cuyahoga Falls, Ohio-based building products company plans to use the proceeds to finance the acquisition of its parent company by affiliates of Hellman & Friedman.

Breitburn at the tight end

BreitBurn Energy Partners LP and BreitBurn Energy Finance Corp. priced a $305 million issue of 8 5/8% 10-year senior unsecured notes (B3/B+) at 98.358 to yield 8 7/8%.

The yield printed at the tight end of the 9% area price talk.

Barclays Capital Inc., Wells Fargo Securities, BMO Nesbitt Burns and RBC Capital Markets Corp. were joint bookrunners for the debt refinancing.

GeoEye drives by

GeoEye Inc. priced a $125 million issue of six-year second-lien notes (B3/B-) at par to yield 8 5/8%.

The yield printed at the tight end of the 8¾% area price talk.

J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Deutsche Bank Securities were the joint bookrunners.

Proceeds will be used for general corporate purposes, which may include working capital, future production and services expansion, contingent capital expenditures and other strategic opportunities.

Hapag-Lloyd in dollars and euros

Germany's Hapag-Lloyd AG priced €330 million and $250 million of senior notes (B3/B) in two tranches with separate maturities on Friday.

The Hamburg-based container shipping firm priced an upsized €330 million tranche of 9% five-year notes at 99.5015 to yield 9 1/8%.

The tranche was upsized from an expected range of €250 million to €300 million, and priced at the tight end of the 9¼% area price talk.

Hapag-Lloyd also priced a $250 million tranche of 9¾% seven-year notes at 99.3731 to yield 9 7/8%.

The yield on the seven-year notes printed in the middle of the 9¾% to 10% price talk. The tranche was sized at the low end of the expected $250 million to $300 million range.

Deutsche Bank, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan and UniCredit were the joint bookrunners for the debt refinancing.

Seat adds on

Elsewhere in Europe, Italy's Seat Pagine Gialle SpA priced an upsized €200 million add-on to its 10½% senior secured notes due Jan. 31, 2017 at 90.00, resulting in a 12.85% yield.

BNP Paribas, Deutsche Bank, J.P. Morgan Securities LLC and Royal Bank of Scotland managed the sale, which was upsized from €150 million.

The add-on notes are not fungible with the €550 million original issue which priced at 97.5998 to yield 11% on Jan. 22, 2010.

AWAS brings split-rated deal

In the crossover market, AWAS Aviation Capital Ltd. priced a $600 million issue of split-rated six-year senior secured notes (Ba2/BBB-) at par to yield 7%.

The yield printed at the wide end of the 6¾% to 7% price talk.

Goldman Sachs was the left active bookrunner. Morgan Stanley was the joint active bookrunner. Deutsche Bank Securities was the passive bookrunner.

ICON sets price talk

Looking to the week ahead, which gets underway with a $7 billion active forward calendar, ICON Health & Fitness, Inc. talked its $205 million offering of six-year senior secured notes (B2/B-) with an 11¾% to 12% yield on Friday.

The books are set to close at 2 p.m. ET on Monday, with the deal set to price after that.

With Friday's price talk came a covenant change, the source said.

Bank of America Merrill Lynch and Credit Suisse are the joint bookrunners.

Reynolds rolls out $3 billion

Reynolds Group Issuer Entities will begin a brief roadshow for a $3 billion dual-tranche offering of 8.5-year notes on Monday.

The deal features a $1.5 billion tranche of senior secured notes (Ba3/BB) and a $1.5 billion tranche of senior unsecured notes (Caa1/B).

The roadshow wraps up on Wednesday, and the deal is set to price after that.

Credit Suisse and HSBC are the joint bookrunners for the acquisition financing.

DaVita to roadshow $1.45 billion

Also kicking off a megadeal on Friday was DaVita Inc., which will begin a two-day roadshow on Monday for a $1.45 billion two-part senior notes offer.

The deal will feature tranches of eight-year notes which come with three years of call protection, and 10-year notes which have four years of call protection. Tranche sizes remain to be determined.

The deal is set to price on Wednesday.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Credit Suisse, Barclays Capital, Goldman Sachs & Co. and Wells Fargo Securities are joint bookrunners for the debt refinancing and general corporate purposes deal.

Evraz to market $600 million

Evraz Inc. NA and Evraz Inc. NA Canada will also begin a roadshow for their $600 million offering of seven-year senior notes during the week ahead.

The deal is set to price during the Oct. 11 week.

Credit Suisse and Barclays Capital are joint bookrunners for the debt refinancing.

Market finishes week strong

The high yield market ended the week on a positive note, market sources reported.

"The market is still firm, still more buyers than sellers," a trader said.

The trader said accounts "still have cash coming in," but added that many don't want to do any selling.

"That makes for a very difficult secondary trading market," he said.

The KDP Daily High Yield index moved up to 73.30, while its yield went out to 7.63%. That was improved from Thursday's reading of 73.10, with a 7.68% yield.

The CDX North American HY Series 14 index meantime gained almost half a point to 97 5/8 bid, 97 7 /8 offered.

Breitburn goes for it

Breitburn Energy Partners priced an upsized offering of 8 5/8% senior notes due 2020.

The issue was increased to $305 million from $250 million.

A trader said the new bonds were "trading very well," moving up to 99½ bid, 99¾ offered from their original issue price of 98.358, yielding 8 7/8%.

"I think it will continue to grind higher," he opined.

The Los Angeles-based company will used the proceeds to reduce borrowings under its bank credit facility.

AWAS deal called lackluster

AWAS Aviation Capital also brought a new deal, a $600 million split-rated 7% six-year note.

The bonds were priced at par.

A trader saw the bonds closing around par ¼ bid, par ½ offered, adding that the paper "didn't do that great."

AWAS will use the proceeds to repay outstanding debt, to finance the purchase of new build aircraft and for general corporate purposes.

Recent new issues doing well

Among other recent new issues, traders said bonds were unchanged to firm, depending on the issue.

"Most of the stuff that came popped up and stayed there," a trader commented.

Ardagh Packaging Finance plc's new dollar-denominated debt, including $350 million of 7 3/8% notes due 2017 and $450 million of 9¼% notes due 2020, were trading well above their par issue price, according to the trader.

He placed the 7 3/8% notes at 103¼ bid, 103½ offered and the 9¼% notes at 103½ bid, 104½ offered.

He deemed the latter issue unchanged.

The trader said new issues from Sears Holdings Corp. and West Corp. were also hanging in there. He saw Sears' 6 5/8% notes due 2018 at par ¾ bid, 101 offered and West's 8 5/8% notes due 2018 around 1021/4.

Another trader placed the West paper at 102¼ bid, 102½ offered, calling that up a smidge.

Meanwhile, Nielsen Co. BV's new 7¾% notes due 2018 jumped up to 101 bid, 101 3/8, according to another trader.

The bonds priced late Thursday at 99.627.

Anadarko, ATP firmer

Away from new issues, a trader said Anadarko Petroleum was the day's most active bond.

He said the 7½% notes due 2031 improved 2 points, ending around 110 versus 108 the day before.

The 6 3/8% notes due 2017 meantime closed unchanged around 110.

At another desk, a trader said ATP Oil & Gas' 11 5/8% notes due 2015 were "better" at 88 bid, 89 offered.

AIG ends unchanged

American International Group's debt was about unchanged, just one day after the bonds gained as much as 6 points.

A trader saw the 6¼% notes due 2037 finishing around 86.

On Thursday, AIG paper moved up anywhere from 1 to 6 points on news the company had reached a deal with U.S. regulators in which the government's preferred stake would be converted into common shares.

AIG also said on Thursday that it had agreed to sell two of its Japanese units to Prudential Financial Inc. for $4.8 billion.

AIG is a New York-based insurance company.

Also in the financial realm, Takefuji Corp.'s 9.20% notes due 2011 slipped to 22 bid, 23 offered, down from 22½ bid, 23½ offered, a trader said. The company filed for the Japanese equivalent of bankruptcy protection earlier in the week.

The trader also noted that Washington Mutual Inc.'s senior bank paper - such as the 5.55% notes due 2010 - had "bounced some" in the previous session, but that they "gave back a little bit" during Friday trading.

He placed the notes around 421/2, which compared to 43 bid, 43¼ offered previously.

OPTI bonds still churning

Despite a lack of news, OPTI Canada's 8¼% notes due 2014 saw "a little more activity," according to a trader.

He called the bonds unchanged at 75¾ bid, 76 offered.

Another trader saw the 9¾% notes due 2013 bid for at par 7/8, "Leaving bonds offered." The bonds had closed at par ¾ bid, 101 the day before.

"This is one of those names where you don't see it and when you do, they keep popping up," the second trader said. "They've been kind of sticking their head up."

The trader added that "most of what I have seen in the last couple of days is always somebody selling."

OPTI Canada is a Calgary, Alta.-based oilsands producer.

GM boosted by sales

Detroit-based General Motors reported its September sales figures Friday, showing a 10.5% increase year over year.

As a result, market sources saw the company's bonds trading actively and higher.

One trader pegged the 8 3/8% notes due 2033 around 341/2, while another quoted the paper at 34¼ bid, 35¼ offered.

The company said its four brands saw a 15% increase in retail sales for the month and that they had also gained market share during the first three quarters of the year.

Also in the autosphere, Ford Motor Co.'s 7.45% notes due 2031 gained a point to close at 105¼ bid, 106¼ offered.

Blockbuster steady, Rite Aid up

In the world of retail, bankrupt Blockbuster saw its 9% notes due 2012 trading around 31/4, a trader said.

Another trader echoed that level, also seeing the 11¾% notes due 2014 at 57½ bid.

Meanwhile, another trader said Rite Aid's 8 5/8% notes due 2015 were "active but unchanged" at 861/2.

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