Amkor gains on better numbers; Tyumen, Sun Media deals price; 2nd straight funds outflow seen

By Paul Deckelman and Paul A. Harris

New York, Jan. 30 - Amkor Technology Inc. bonds firmed Thursday amid a generally weak market after the company reported better-than-expected fourth-quarter numbers.

In the primary market, Tyumen Oil and Sun Media Inc. were heard to have priced new deals late in the session, and theater operator Cinemark USA Inc. was heard ready to raise the curtain on a roadshow marketing campaign for its $150 million upcoming bond issue .

But primary and secondary players alike were expected to be pondering on Friday the import of the latest fund flow statistics, showing a $648.918 million outflow from the funds in the week ended Wednesday. It was the second consecutive weekly outflow number seen, following last week's $81.4 million outflow reported by AMG Data Statistics of Arcata, Calif.

The numbers are carefully watched by high yield players as a sign of overall junk market liquidity trends. The overall trend for the year remains positive, with approximately $1.223 billion more having come into the funds since the beginning of the year than having left them, according to a Prospect News analysis of the weekly figures. Still, in the last two weeks, approximately $730 million of net outflows have been recorded, and this is the first time in several months that two straight weeks of outflows have been seen.

The recent trend of continuous inflows - broken by the occasional weekly outflow - has been an indicator of greatly improved junk market liquidity since mid-October, and is considered the key factor behind both the sharp rebound in the secondary market from its depressed levels of late summer and early fall, and a revival of the primary market, including several mega-deals of a billion dollars or more in that time, most recently the $1.5 billion Georgia Pacific Corp. Two-part offering, which priced last Thursday, and Houghton Mifflin Co.'s $1 billion dual-tranche deal last Friday.

One sell-side source who commented on the funds flows number told Prospect News that in spite of the outflow, the geopolitical uncertainty revolving a possible U.S.-led war upon Iraq, and a plunging equities market - the Dow Jones Industrial Average retreated by slightly more than 2% Thursday - the day's session wasn't all that bad.

"Some sectors actually seemed to respond fairly well today," the official said.

"And the accounts still seem to have plenty of cash as the result of the flows for the past two months."

Still, this sell-sider allowed, the high yield shoppers who have turned up over the past couple of days seem like a somewhat tougher bunch to please.

"You do see a little more selectiveness," the source said. "Certainly deals are pricing within price talk. But people really are starting to feel that it's relevant to fight for 25 basis points. If they're going to spend the money - which they need to do because they have too much cash and they have to invest it in something - they are being somewhat stringent on price talk.

"People are really trying to squeeze as much as possible out of a trade in the secondary market, whereas just a little while ago they had not been squeezing quite so hard.

"And that translates over into the primary market," the official explained. "Orders are subject to price talk. Even on a hot deal you really need to go back and confirm those orders, and be careful if you are going to come back through price talk that accounts are on board for that."

Back in the secondary market Thursday, Amkor Technology was the standout, after having posted better-than expected numbers after the market closed on Wednesday. The Chandler, Ariz.-based provider of contract semiconductor assembly and test services showed a fourth-quarter net loss of $196.1 million ($1.19 a share) versus a 136.6 million loss (85 cents a share) in the year-ago quarter.

But excluding one-time items, Amkor's loss narrowed to $24 million (15 cents a share) versus $108 million of red ink (67 cents a share) a year ago. Wall Streeters had been projecting a loss before one-time items of 23 cents a share.

The numbers didn't much help the stock, which was down nine cents (1.83%) to $4.84.

But on the bond side, Amkor's 9¼% notes due 20006 were seen more than three points better at 96.5 bid.

At another desk, a trader said that Amkor's 9¼% notes due 2008 firmed to as high as 94.875 bid Thursday from Wednesday's pre-numbers finish at 91.5 bid/93 offered, although he added that the bonds "came in after that," coming off that peak to finish at 93.5 bid/95.5 offered, still up two points on the session. He also saw Amkor's 10½% notes due 2009 advancing to 88 bid/90 offered from prior levels at 83 bid/85 offered.

Also on the earnings front, Lyondell Chemical Co.'s bonds were pushed down by investor reaction to its wider fourth-quarter net loss, although a trader said the Houston-based chemical company's debt bounced off its lows to end little changed.

He quoted Lyondell's 9 7/8% notes due 2007 as having fallen as low as 91 bid/92 offered, before "rebounding pretty quickly enough" after the release of the earnings data to close at 93.5 bid/94.5 offered, essentially unchanged.

Another trader saw the 9 7/8s dipping to around 92 bid, off from 93.25 bid/94.25 offered Wednesday, but then pegged them ending slightly higher, at 93.75 bid.94.75 offered.

Lyondell was "not really much, nothing big," a market source said, although he saw Lyondell's 9 5/8% notes due 2007 half a point down at 93.5 bid., while its 10 7/8% notes due 2009 lost a point, to 84.

Lyondell cited higher raw materials costs in posting a loss of $93 million (58 cents a share) versus a loss of $53 million (46 cents a share) in the year-earlier quarter. Analysts were only looking for a 35 cents per share loss.

Elsewhere a trader saw Charter Communications Holdings LLC's benchmark 8 5/8% notes due 2009 a point better at 47.5 bid/48 - a second straight day of small gains for the troubled St. Louis-based cable television systems operator.

Crown Cork & Seal Co.'s short-dated debt was seen little changed from the higher levels it occupied Wednesday, after the Philadelphia-based maker of metal packaging containers announced its refinancing plans. Its 8 3/8% notes due 2005 were quoted at 99.25 bid, off slightly from their 99.5 close Wednesday but still up over three points from pre-news levels.

A trader saw Freeport McMoRan Copper & Gold Inc.'s new 10 1/8% notes due 2010 at 101.75 bid/102.5 offered, off slightly from the 102.75 bid/102.75 offered level the bonds had moved to after having priced at par last Friday.

And Continental Airlines' 8% notes due 2005 were quoted at 53 bid, down more than five points from levels the air carrier's bonds held earlier in the week.

In the wake of the massive $1.75 million debt restructuring deal that Crown Cork & Seal Co. unveiled Wednesday, Thursday's primary market session may have seemed a tad anticlimactic.

Nevertheless, terms emerged Thursday on a deal from Toronto's Sun Media That transaction, run by Salomon Smith Barney, priced at a lower yield than talk.

And the market heard that Cinemark USA would begin previewing its coming attraction - a $150 million junk bond deal also via Salomon Smith Barney - to investors on Friday.

Sun Media priced $205 million of 10-year 7 5/8% senior notes (Ba3/B-) at 98.286 to yield 7 7/8%, better than the 8%-8¼% price talk. The notes, from underwriter Salomon Smith Barney, were also increased slightly from a planned $200 million size.

Terms were also heard Thursday on an emerging markets corporate deal. Russian energy firm Tyumen Oil priced an upsized $300 million add-on to its 11% loan participation notes due Nov. 6 2007 (Ba3/B+/B+). The Rule 144A add-on priced at 105.75 via Credit Suisse First Boston and Salomon Smith Barney. The original $400 million deal priced on Oct. 31, 2002 at par.

On Thursday the market also heard that the roadshow starts Friday for Plano, Tex. movie exhibitor Cinemark USA $150 million of 10-year senior subordinated notes, via Lehman Brothers, a deal that is expected to price late in the week of Feb. 3.

Meanwhile price talk of 10½%-10¾% was heard on Anchor Glass Container's $300 million of 10-year senior secured notes (B2/B+). The Tampa-based glass container company's refinancing deal, via underwriters Deutsche Bank Securities, Credit Suisse First Boston and Banc of America Securities, is expected to price Friday.

And again from the universe of emerging markets corporates, price talk of a yield in the 10¼% area was heard Thursday on Hurricane Hydrocarbons $100 million minimum of senior notes with a five or seven year maturity (B1/B+). JP Morgan is running the deal for the energy exploration and production firm's notes.

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