Wise Metals prices, trades up; Afren also prices amid dull market; Clear Channel again busy

By Paul Deckelman and Paul A. Harris

New York, Nov. 26 - The high-yield primary arena continued to squeeze out new deals on Tuesday amid slow overall conditions.

As was the case on Monday, just two single-tranche credits priced - but these larger deals brought the day's tally of new dollar-denominated, fully junk-rated paper up to just over $1 billion, around triple the amount that was priced on Monday.

Both were scheduled forward calendar deals, bucking the recent trend of same-day transactions.

Aluminum producer Wise Metals Group LLC had the big deal of the day, an upsized $650 million offering of five-year secured paper. Traders saw that deal having firmed smartly when it hit the aftermarket.

British energy company Afren plc also came to market, pricing a $360 million seven-year secured deal that was not seen immediately trading around.

There were also several pricings of non-dollar-denominated notes from European issuers Tank & Rast GmbH Motorway and Finmeccanica SpA.

Traders saw little in the way of market activity among such recently priced names as Alcatel-Lucent USA Inc. or Hot Topic, Inc. from Monday, or Brand Energy & Infrastructure Services, Inc., which got done last Friday.

Market participants were looking for an even duller session Wednesday ahead of the Thanksgiving holiday break.

Away from the new-deal arena, Clear Channel Communications, Inc.'s two series of 2016 bonds were again busy around the higher levels those notes had pushed up to on Monday following the announcement that the company, looking to extend its maturities, will offer new higher-coupon debt in exchange for those established bombs.

Overall, statistical market performance indicators were mostly higher for a second straight session.

Wise Metals upsizes

The Tuesday session saw $1 billion of dollar-denominated junk issuance from two issuers, each one bringing a single-tranche deal.

Both deals came at the conclusion of roadshows.

There were no dollar-denominated drive-bys on Tuesday.

Wise Metals Group priced an upsized $650 million issue of five-year senior secured notes (Caa1/B-) that came at par to yield 8¾%.

The issue was upsized from $625 million. The yield printed at the tight end of the 8¾% to 9% yield talk.

BofA Merrill Lynch was the left bookrunner. Wells Fargo and Houlihan Lokey were the joint bookrunners.

The Baltimore-based producer of aluminum beverage sheet plans to use the proceeds to refinance debt and redeem preferred equity interests.

Afren at the tight end

Tuesday's other dollar-denominated deal came with an emerging markets aspect.

Afren priced a $360 million issue of seven-year senior secured notes (/B+/B+) at par to yield 6 5/8%.

The yield printed at the tight end of yield talk in the 6¾% area.

Global coordinator Citigroup was a joint lead manager and joint bookrunner for the debt refinancing. BofA Merrill Lynch and Credit Suisse were also joint lead managers and joint bookrunners.

The London-based oil and gas exploration, development and production company has operations in Africa and the Middle East. As such, the deal was transacted on the emerging markets desk.

Pacnet starts Wednesday

In another dollar-denominated deal that comes with an emerging markets aspect, Hong Kong-based telecom Pacnet Ltd. plans to start a roadshow on Wednesday in Singapore for a $350 million offering of five-year senior secured notes (expected ratings B2/B).

DBS Bank, Deutsch Bank, Goldman Sachs and Standard Chartered are leading the debt refinancing deal.

Elsewhere, Canada-based, emerging markets-focused Uranium One Inc. is expected to roadshow its $350 million non-convertible senior notes due in 2018.

Deutsche Bank, Sberbank and Societe Generale are the bookrunners for the deal, which is expected to get rolling before the end of the week.

The proceeds will be used to repurchase existing convertible debentures and for general corporate purposes.

The Toronto-based issuer is a uranium mining company with operations in Kazakhstan, South Africa, Australia and the United States.

Finmeccanica oversubscribed

In Tuesday drive-by action in Europe, Italy's Finmeccanica priced a €700 million issue of 4½% senior notes (Ba1/BB+/BB+) at 98.505 to yield 4¾%.

The deal, which was transacted on the investment-grade desk, was introduced at the benchmark size with initial yield guidance in the 5% area earlier in the day.

It was more than four times oversubscribed, according to a market source, who added that the final order book contained €3.1 billion of orders.

BNP Paribas, Citigroup, Credit Agricole, HSBC and UniCredit were the joint global coordinators.

BofA Merrill Lynch, Banca IMI, Barclays, BBVA, Commerzbank, Deutsche Bank, Goldman Sachs, JPMorgan, Royal Bank of Scotland and SG were the joint bookrunners.

Tank & Rast top tightened talk

Germany-based Tank & Rast GmbH Motorway priced a €460 million issue of seven-year senior second-lien notes (/B/) at par to yield 6¾%, on top of yield talk that had been revised downward from earlier talk of 7% to 7¼%.

Global coordinator Deutsche Bank will bill and deliver. Barclays and Royal Bank of Scotland were also global coordinators.

Commerzbank, Credit Suisse, ING, Nomura, RBC and UniCredit were joint bookrunners.

Proceeds will be used to refinance debt incurred in the acquisition of the company by an infrastructure investment vehicle owned by Deutsche Bank from Terra Firma Capital Partners in 2007.

Wednesday's primary

Market watchers expect a relatively quiet Wednesday, ahead of the four-day Thanksgiving holiday in the United States, which gets underway on Thursday.

However the Wednesday session does not figure to be a totally dormant one in the primary market.

Italian sports betting operation SNAI SpA set price talk on Tuesday for its €460 million two-part offering of senior notes; the deal is set to price on Thursday.

A €300 million tranche of 4.5-year senior secured notes (B1/B-) is talked to yield 7¾% to 8% and will be non-callable for two years.

A €160 million tranche of five-year senior subordinated notes (Caa1/CCC) is talked to yield 12¼% to 12½%.

JPMorgan will bill and deliver and is joined by Banca IMI and UniCredit as joint physical bookrunners. Deutsche Bank is a joint bookrunner.

Meanwhile Italian construction group Astaldi SpA is expected to circulate price talk on Wednesday for its €400 million offering of seven-year senior notes (B1/B+/B+) and to price the deal before the London close, according to a source close to the transaction.

BNP Paribas will bill and deliver and is leading a syndicate of banks that includes Banca IMI, Bancao Bilbao, Credit Agricole, Credit Suisse, Deutsche Bank, HSBC, ING, Natixis and UniCredit.

And in the dollar-denominated high-yield primary, Bluewater Energy Services BV could complete the placement of its $375 million to $425 million offering of six-year notes via Pareto and DNB.

Books were expected to close on Tuesday, an informed source said, and added that the deal appears to be coming together in the 10% area; initial guidance was 8¾% to 9¼%.

New Wise notes firm smartly

In the secondary market, traders said that Wise Metals Group's new 8¾% senior secured notes due 2018 did well when it hit the aftermarket after pricing at par.

One saw the aluminum beverage sheet producer's deal initially trading at a wide 101½ to 103½ range, observing that "most of the flipping went back to the underwriter."

But a second trader pegged the bonds at 101¾ bid, 102¼ offered.

And yet another trader saw the issue even better than that, locating them within a range of 102 and 102¾ bid.

Energy operator Afren's 6 5/8% senior secured notes due 2020 meantime arrived too late in the session for any kind of an aftermarket.

Recent deals mostly quiet

Continuing the pattern that was seen on Monday, there was not a lot of activity in even recently priced new deal.

For instance, a trader answered in the negative when asked whether he had seen any activity in Monday's new drive-by issues - the $250 million add-on to Paris-based telecommunications equipment manufacturer Alcatel-Lucent USA's existing 6¾% notes due 2020 and City of Industry, Calif.-based specialty apparel retailer Hot Topic's upsized $110 million of 12%/12¾% senior PIK toggle notes due 2019.

And he likewise saw no dealings in the new 8½% notes due 2021 from Brand Energy & Infrastructure Services. The Atlanta-based provider of specialized industrial services to the energy and infrastructure sectors had priced a downsized $500 million of those notes on Friday at par.

Instead, he opined, the day was "a real yawner."

"Volume was really kinda [terrible]. I'd say most of the trading was in the [investment-grade] guys, doing crossover stuff," including strong BB names or split-rated credits that rarely trade among regular junk accounts such as Telecom Italia Capital SA, Anadarko Petroleum Corp., Leucadia National Corp. and hybrid financial issues like Goldman Sachs Capital II and Royal Bank of Scotland Group plc.

LifePoint, BreitBurn trade

But at another desk, a market source said that here and there were pockets of activity in some recent deals

For instance, LifePoint Hospitals, Inc.'s new 5½% notes due 2021 were seen having moved up by 1/8 point on the session, going home at 100½ bid, 100¾ offered.

The Brentwood, Tenn.-based hospital operator had priced $700 million of those notes at par on Thursday in a quick-to-market deal after the issue was upsized from the originally announced $500 million.

And Los Angeles-based oil and natural gas company BreitBurn Energy Partners, LP's 7 7/8% notes due 2022 firmed by ¾ point on the day, a market source said, quoting the paper at 102¾ bid.

The company had priced a quickly shopped $400 million of the notes as an add-on to its existing bonds last Tuesday, bringing the deal to market at 100¼ to yield 7.823%, after it was upsized from its original $300 million size.

T-Mobile USA Inc.'s 6½% notes due 2024 traded at around the 101 5/16 bid level, up slightly from recent quotes, on volume of over $6 million.

The Bellevue, Wash.-based number-four U.S. wireless carrier had priced $1 billion of those notes, and $1 billion of 6 1/8% notes due 2022, at par in a Nov. 18 drive-by deal. The latter credit was not seen trading around on Tuesday.

NII knocked around

A trader said that Tuesday's market "started off with a nice little firm tone this morning - then the volume basically went away, except for NIHD."

He said that NII Holdings Inc.'s bonds "were very active today. The bonds remain under pressure. That's been the focus."

The Reston, Va.-based provider of Nextel-branded wireless service to Latin American markets has been taking its lumps lately, and Tuesday was no exception.

A market source said the company's NII Capital Corp. 7 5/8% notes due 2021topped the purely "junk" names (meaning, not crossovers) on Trace, with over $30 million having traded. He quoted the notes down another 2 7/8% at 401/2. Its 10% notes due 2016 lost some 1 15/16 points to end at around the 54½ level. Volume was over $10 million.

Clear Channel resumes climb

Another active non-new-deal name was Clear Channel Communications, whose two series of 2016 bonds had firmed solidly on busy volume on Monday after the San Antonio, Texas-based radio broadcaster and outdoor advertising company announced plans to offer new, higher-coupon 2021 notes in exchange for the 2016 bonds.

Its 10¾% notes due 2018, which had moved up by over 3 points on Monday on over $22 million of volume, gained another ¼ point on Tuesday to end at 100¾ bid. Over $14 million changed hands.

However, its 11% notes due 2016, which had risen almost 3 points on Monday on volume of over $10 million, were quoted off ¼ point at 100¾ bid on volume of over $14 million.

Market signs stay strong

Overall, statistical junk-market performance indicators remained unchanged to mostly higher for a second straight session on Tuesday, after having been mixed for five sessions in a row before that.

The Markit Series 21 CDX North American High Yield index was unchanged at 107 3/16 bid, 107 5/16 offered on Tuesday. On Monday, it had risen by 5/32, its third consecutive advance.

The KDP High Yield Daily index gained 5 basis points on Tuesday to end at 74.36, its second straight improvement. On Monday it had broken out of a three-session slump by gaining 7 bps.

Its yield meantime came in by 4 bps to finish at 5.66%, after having tightened by 2 bps on Monday.

And the widely followed Merrill Lynch High Yield Master II index put up its third straight gain, improving by 0.073%, on top of Monday's 0.172% rise.

The latest gain lifted its year-to-date return to 6.694%, a third consecutive new peak level for the year, eclipsing Monday's 6.617% reading, which had been the previous new 2013 zenith.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.