Warner Chilcott, Harvest, Stoneridge price; Leap boosted; Rite Aid, Blockbuster gain

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., Sept. 24 -The high-yield market headed higher on Friday, regaining its footing after a decline the previous session.

And the new deals kept coming, with another three issuers tapping the junk bond barrel to raise $1.182 billion, bringing the week's issuance total to $12.6 billion.

In the secondary arena, good news and a stronger marketplace helped Leap Wireless International Inc.'s bonds move up. The company announced it was buying the remaining assets of its Midwest joint venture partner.

The firm market also helped both Rite Aid Corp. and Blockbuster Inc. regain strength. Rite Aid's debt had drifted in the previous two sessions, first before earnings and then after the disappointing numbers came out on Thursday. For Blockbuster's part, news of its bankruptcy filing had put pressure on the movie rental chain's notes.

A notable item, at least in one trader's opinion, was reasonably active trading in Borgata Hotel and Spa's notes. The bonds don't often trader, he said, and there was no news out to cause the action.

Warner Chilcott adds on

Warner Chilcott Co., LLC and Warner Chilcott Finance LLC priced a $500 million add-on to their 7¾% senior notes due Sept. 15, 2018 (B3/B+) at 102 to yield 7.325%.

The reoffer price came at the cheap end of the 102 to 102.50 price talk.

Bank of America Merrill Lynch, JP Morgan and Goldman Sachs & Co. were the joint bookrunners.

Proceeds will be used to help finance the company's acquisition of U.S. rights to Enablex and for general corporate purposes.

The original $750 million issue priced at par on Aug. 12.

Harvest prices tight to talk

Harvest Operations Corp. priced a $500 million issue of 6 7/8% seven-year senior notes (Ba1/BB-) at 99.319 to yield 7%.

The yield printed at the tight end of the 7 1/8% price talk.

Bank of America Merrill Lynch and HSBC were the joint bookrunners.

Proceeds will be used to repurchase the company's existing 7 7/8% senior notes, as well as to repay its revolver and for general corporate purposes.

Stoneridge at the wide end

Stoneridge Inc. priced a $175 million issue of 9½% seven-year first-lien senior secured notes (B3/B+) at par to yield 9½%, at the wide end of the 9¼% to 9½% price talk.

JP Morgan and Deutsche Bank Securities were the joint bookrunners.

Proceeds will be used to fund a tender offer for the company's 11½% senior notes due 2012, and to redeem any notes not tendered.

Talking the deals

Looking to the week ahead, Vertellus Specialties Inc. talked its $325 million offering of five-year senior secured notes (B1/B/) with a 9¼% to 9½% yield.

The books close Monday morning.

Credit Suisse and Jefferies & Co. are joint bookrunners for the debt refinancing.

And Logan's Roadhouse talked its $335 million offering of seven-year second-lien senior secured notes (B2/B-) with a 10¾% area yield.

The deal is expected to price on Monday.

JP Morgan and Credit Suisse are the joint bookrunners for the LBO deal.

AWAS plans split-rated deal

AWAS Aviation Capital Ltd. will market a split-rated $600 million offering of six-year senior secured notes (Ba2/BBB-) in the week ahead.

Goldman Sachs is the left active bookrunner. Morgan Stanley is the joint active bookrunner.

The Dublin, Ireland-based aircraft leasing company will use the proceeds to repay debt, finance purchases of new aircraft and for general corporate purposes.

Market heads upward

Away from the primary, the high-yield market took a somewhat surprising turn Friday and headed for higher ground. Losses from Thursday were by and large wiped out, according to traders.

"Yesterday the market was feeling a little squishy at the top," remarked one source, who added that overall, bonds were "firm again.

"There were marginally better bids," he noted. "We averted what looked like bids backing off more this morning until the equity markets took off."

"It was the exact reverse of yesterday," said another trader. "Everything is trading through the roof.

"It was actually hard to find something that was down," he said.

The KDP Daily High Yield index ended the week at 72.81, with a 7.80% yield. That compared to Thursday's reading of 72.68, yielding 7.86%.

The CDX North American HY Series 14 index meantime gained ¾ to close at 98¼ bid, 98¾ offered.

New Stoneridge bonds gain

Stoneridge's new 9½% senior secured notes traded strongly after pricing..

The bonds were priced at par, but the stronger marketplace allowed the new debt to trade up as high as 103 bid, 103¾ offered, a trader said.

Another trader quoted the bonds at 103½ bid, 104 offered.

"Interestingly, they backed up price talk by ¼ point and then it just ran," the trader said.

Stoneridge is a Warren, Ohio-based designer and manufacturer of highly engineered electrical and electronic components, modules and systems principally for the medium- and heavy-duty truck, automotive and agricultural and off-highway vehicle markets.

Stronger market helps new issues

The positive tone of the general market also allowed recent new issues to gain some ground.

Whiting Petroleum Corp.'s new 6½% notes due 2018 - which priced on Tuesday - did very well over the week, closing at 101¼ bid, 101¾ offered. According to one trader, Friday's levels were "at the highs."

Meanwhile, CHC Helicopter SA's 9¼% notes due 2020 - priced at 98.399 on Wednesday - were seen closing "at issue price on the bid side and offered a little bit higher," a trader said.

Also priced Wednesday were NBTY Inc.'s 9% notes due 2018. A trader said he had not seen anything in the new paper until Friday, when he saw a market of 103 7/8 bid, 104 1/8 offered.

Leap up on Midwest acquisition

A trader said there was "good activity" in San Diego-based Leap Wireless bonds, following the news that the company planned to buy out its Midwest joint venture partner, Denali Spectrum LLC.

The trader saw about "$15- to $20-odd million" of the 7¾% notes due 2016 changing hands at 105 7/8, calling that up ½ point.

Another trader echoed that market. The trader also saw the 9 3/8% notes due 2014 at 103½ and the 10% notes due 2015 at 107, up between ½ and 1 point.

At another desk, the 7¾% notes were quoted at 105¾ bid, 106 offered.

Leap, via its Cricket Communications Inc. subsidiary, will buy all of the remaining interests in Denali, of which it owns 82½%.

The company is paying $58 million in cash and $45.5 million via a five-year note for the assets.

In connection with the deal, Denali has agreed to give Savary Island Wireless - another Leap joint venture - its undeveloped spectrum. Ring Wireless is also joining in, taking a 15% stake in the venture.

Savary will assume $211.6 million in secured debt from Denali. The debt comes from funds owed to Leap.

"We are extremely pleased to have reached an agreement to acquire complete ownership of the Chicago and Southern Wisconsin operating markets," said Doug Hutcheson, president and chief executive officer, in a press release.

Also on Friday, Leap announced the retirement of Al Moschner, chief operating officer.

Rite Aid, Blockbuster regain ground

Both Rite Aid and Blockbuster debt regained the losses incurred on the back of seemingly bad news out Thursday, according to traders.

One trader said Rite Aid was "back to where it was or higher," after falling in the previous session on the back of disappointing quarterly results.

He said the most active issue continued to be the 9½% notes due 2017, which improved about 1½ points on the day, "which was pretty much how much they lost." He pegged the paper at 831/2.

He also saw the 9 3/8% notes due 2015 moving up to 85 and the 7.70% notes due 2027 gained a point to close at 56.

All told, about $75 million of the Camp Hill, Pa.-based drugstore chain's debt changed hands, he said.

Another trader said the 9½% notes were "probably the most active," trading between 82½ and 831/2, "but mostly with an 83 handle." The issue had previously closed at 81½ bid, 82½ offered.

In Blockbuster bonds, a trader said the 11¾% senior notes due 2014 "moved up a bit" to 56½ bid, 57½ offered. The 9% notes due 2012, however, remained in a 2½ bid, 4 offered context.

Another trader said the senior paper experienced a "big jump," gaining 8 points to finish the week at 57 bid, 58 offered. He added that the subs were 'a little better," though still in a 21/2-3½ range.

On Thursday, the Dallas-based movie rental chain said it had officially filed for bankruptcy, bringing months of speculation to an end. The prepackaged bankruptcy filing will give all new equity to the senior noteholders.

Borgata debt unusually active

A trader said it "seems like a lot of paper traded" in Borgata Hotel and Spa bonds.

He quoted the 9½% notes due 2015 at 96¾ bid, 97½ offered and the 9 7/8% notes due 2018 at 96½ bid, 97 offered.

Another trader said he saw the 9 7/8% notes offered at 971/4.

There was no news out on the Atlantic City-based hotel and casino operator.

Paper sector improves

Catalyst Paper Corp. moved up a point during the trading day, with the 11% notes due 2016 trading between 81 and 84, "starting lower and obviously ending the day at the highs," a trader said.

The trader also saw NewPage Corp.'s 11 3/8% notes due 2014 inching up to 901/4.

There was no fresh news out on either papermaker.

Broad market mostly better

Among other high-yield credits, Anadarko Petroleum Corp.'s 6 3/8% notes due 2017 slipped slightly to 106 5/8, while the 7.20% notes due 2029 ended "unchanged to down a 1/4" around 961/2, according to a trader.

The trader also said Las Vegas Sands Corp.'s 6 3/8% notes due 2015 closed "kind of flat" around 1011/4.

Community Health Systems Inc.'s 8 7/8% notes due 2015 were meantime "bracketing" 106, which a trader said was "right at the highs."

Also in the medical arena, Skilled Healthcare Group Inc.'s 11% notes due 2014 "are now above par," said a trader. He pegged the notes at par ¾ bid, 101¾ offered, adding that the bonds had been in the 80s just a few weeks ago.

In the autos, General Motors Corp.'s 8 3/8% notes due 2033 gained ½ point to 33 bid, 33½ offered, while Ford Motor Co.'s 7.45% notes due 2031 improved by a point, closing at par ½ bid, 101½ offered.

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