NBTY, Gulfport, Viking price to cap $6 billion week; Sprint, Chesapeake bonds active

By Paul Deckelman and Aleesia Forni

New York, Oct. 12 - The high-yield primary sphere saw a quartet of deals totaling more than $1.3 billion price on Friday, syndicate sources said, including issues from Gulfport Energy Corp., NBTY Inc. and Viking Cruises Ltd.

The big deal of the day came from NBTY, a maker of vitamins and nutritional supplements, which brought an upsized $550 million of five-year senior contingent cash-pay notes sold via its corporate parent, Alphabet Holding Co. Those bonds priced at a discount to par but moved up solidly when they hit the aftermarket.

Gulfport Energy, an oil and natural gas exploration and production company, also priced its $250 million of eight-year notes at a sizable discount, although those bonds showed only modest aftermarket gains.

Coming out of that same energy sector, E&P operator Linc Energy Finance (USA) Inc. did a $265 million five-year secured paper deal, but traders did not see any dealings in those bonds afterward.

River cruise ship operator Viking Cruises also dropped anchor in the Junkbondland harbor with its $250 million issue of 10-year notes, which were seen doing well once they were freed to trade.

Those four deals, on top of the roughly $5 billion already recorded through Thursday, raised the week's issuance above $6 billion, although that left the holiday-abbreviated week well short of the nearly $11 billion that priced in the week ended last Friday, Oct. 5.

There was volatile activity in Thursday's mega-deal from Momentive Performance Materials Inc. Those eight-year secured notes - which had priced too late in the session Thursday to trade around - initially zoomed by well over a point when they began trading Friday, but then fell back from those early peak levels and ended with only modest gains. The company's existing bonds, which had jumped Thursday on news of the big deal, gave up some of those gains.

Also in the secondary market, away from the new deals, Clear Channel Communications Inc.'s bonds gained on news that the broadcasting and outdoor advertising company had moved to shore up its balance sheet with an exchange offer for $2 billion of its outstanding loans.

Sprint Nextel Corp.'s bonds, up sharply Thursday on news the company was in talks to line up a big cash infusion from an investor, were still busy Friday, but off their peaks.

And Chesapeake Energy Corp. paper rose after it announced plans to sell some oil-producing assets in Oklahoma.

Statistical performance measures ended mixed on both the day and for the week.

Four deals price, two planned

The high-yield market saw NBTY and Linc Energy Ltd. price deals on Friday, market sources said.

NBTY priced a $550 million issue of five-year PIK toggle notes, while Linc Energy sold $265 million of notes due 2017.

Viking Cruises and Gulfport Energy also came to market during the session, both selling $250 million issues.

Looking to the week ahead, Radio Systems Corp. and Dufry Finance SCA will both kick off roadshows on Monday.

Radio Systems is eyeing a $250 million offering following an investor call at the start of the week.

Dufry is prepping an eight-year deal twice that size, with the debt expected to price late during the Oct. 15 week.

NBTY prints at tight end

NBTY priced $550 million of five-year senior contingent cash pay notes during the session, a market source said.

The notes will pay a 7¾% cash coupon and an 8½% PIK coupon.

The reoffer price was 98. The cash yield was 8.242% cash yield, and the PIK yield was 8.776%.

The cash coupon printed at the tight end of the 7¾% to 8% cash coupon talk. The reoffer price came in line with price talk of 98. The cash yield printed tighter than the 8¼% to 8½% cash yield talk.

Barclays, Bank of America Merrill Lynch and Credit Suisse Securities (USA) LLC were the joint bookrunners for the Rule 144A with registration rights deal.

The Ronkonkoma, N.Y.-based company will use proceeds, together with cash on hand, to fund a distribution to equity shareholders.

The issuing entity is Alphabet Holding Co., Inc., the parent of NBTY, a manufacturer, marketer, distributor and retailer of vitamins and nutritional supplements.

Linc brings private placement

Linc Energy subsidiaries Linc USA GP and Linc Energy Finance (USA) Inc. sold a $265 million private placement of 12½% five-year senior secured notes due 2017 at 96.402 to yield 13½%.

Imperial Capital is the lead placement agent. ISM Capital is the joint placement agent.

The Brisbane, Australia-based energy exploration and production company plans to use the proceeds to repay debt, to fund capital expenditures and for general corporate purposes.

Gulfport Energy

Another energy company came to market on Friday, as Gulfport Energy sold a $250 million issue of 7¾% eight-year senior notes at 98.534 to yield 8%.

Price talk was set at 7¾% to 8%.

Credit Suisse Securities (USA) LLC was the bookrunner for the Rule 144A and Regulation S with registration rights deal.

The Oklahoma City-based oil and gas exploration and production company plans to use the proceeds to repay revolver debt and pre-fund its drilling capital expenditures program.

Viking sells $250 million

The primary also saw Viking Cruises price a $250 million offering of 8½% 10-year senior notes at par.

Wells Fargo Securities LLC and Credit Suisse Securities (USA) LLC were the joint bookrunners for the Rule 144A and Regulation S for life offering.

Of the proceeds, $100 million will be used for acquisition costs related to river vessels to be built, $50 million to finance the acquisition of ships, vessels, and other assets, and start-up costs at subsidiary Viking Ocean Cruises Ltd., up to $50 million to purchase shares and options to acquire shares of Viking River Cruises Ltd., and $20 million to fund a dividend to MISA Investments, the parent. The remainder will be used for general corporate purposes.

The issuer is Woodland Hills, Calif.-based river cruising company.

Radio Systems plans roadshow

In other primary news, Radio Systems set a roadshow for Oct. 15 and Oct. 16 ahead of a possible $250 million offering of seven-year senior secured second-lien notes.

An investor call will be held at noon ET on Monday.

Bank of America Merrill Lynch, Fifth Third Securities Inc. and BMO Capital Markets Corp. are the joint bookrunners.

The Knoxville, Tenn.-based pet products manufacturer will use proceeds to refinance existing debt and to purchase various existing equity stakes in its parent company, Radio Systems Holdings, Inc.

Dufry eyes $500 million deal

Dufry Finance also added to the active calendar on Friday.

The Basel, Switzerland-based travel retailer will hold a roadshow in the United States and Europe beginning on Oct. 15 ahead of a possible $500 million issue of eight-year senior unsecured notes, a market source said.

Pricing is expected late during the week of Oct. 15.

Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are the joint global coordinators The Rule 144A and Regulation S for life notes.

RBS Securities Inc., BBVA Securities Inc., Credit Agricole Securities (USA) Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., ING Financial Markets LLC, Morgan Stanley & Co. LLC, Raiffeisen, Santander Investment Securities Inc., UBS Securities LLC and Unicredit are the joint bookrunners.

Proceeds will be used to refinance existing debt.

NBTY, Viking score in trading

When the day's new deals were freed for aftermarket activity, a trader said that generally, "they did pretty well." In particular, he said that NBTY's offering of 7¾% senior PIK toggle notes due 2017 "was a star."

The trader saw the bonds rise to 100½ bid from their discounted issue level of 98, before going home at 100 3/8 bid, 100½ offered. "They did very well," he reiterated.

Several other traders saw similar closing levels between 100¼ bid and as high as 101 offered.

The first trader also pinned the "star" complement on Viking Cruises' new 8½% notes due 2022. He saw the deal having sailed as high as 101 ½ bid, 102 ½ offered from its par pricing level.

A little later on, a second trader saw those bonds even better, quoting them in a 102 to 102½ range. Yet another trader pegged them in a 101 5/8 to 102½ context.

However, the day's other issue that actually made it to the aftermarket - Gulfport Energy's 7¾% notes due 2020 - showed nowhere near the same kind of upside when it was freed to trade. One of the traders said the issue "didn't go far" from its 98.534 pricing level, quoting the bonds at 98¾ bid, 99 offered, while a second trader had them at 98¾ bid, 99¼ offered.

Momentive bonds gyrate

Going back a day, Momentive's new 8 7/8% first-priority senior secured notes due 2020 began trading around on Friday after pricing too late in the session Thursday to trade, and they started off with a bang.

A trader said that the Columbus, Ohio-based specialty chemicals manufacturer's $1.1 billion issue, which had priced at par, jumped to 101½ bid, "right out of the chute," before backtracking later on and closing around 100½ bid.

A second trader said that the bonds - actually issued in a quick-to-market transaction by Momentive's MPM Escrow LLC and MPM Finance Escrow Corp. subsidiaries - got as high as 101¼ bid in the early going, "but then they faded" to end around 100 3/8 bid, 100 5/8 offered.

Meanwhile, the company's existing bonds, which on Thursday had firmed solidly on news of the new deal, gave up some of their gains.

Its 9% notes due 2021 lost 1 point to end at 76 bid, a trader said, on volume of over $10 million. On Thursday, those bonds - which had traded earlier in the week as low as a 73-74 context - shot as high as 80 bid on news of the new deal, before coming off that peal level to end at 77.

Momentive's 11½% notes due 2016 - which on Thursday had climbed by 8 to 10 points to trade in the high-60s - lost 1¼ of those points on Friday to end at 68 3/8 bid, although a market source said that activity was not great, with only $3 million trading on a round-lot basis.

Looking at Thursday's other deals, Cequel Communications Holdings LLC's 6 3/8% notes due 2020 were seen by a trader at 101¼ bid, 101¾ offered Friday, while two others had the bonds at 101 bid, 101½ offered. Those levels are around where the St. Louis-based cable, phone and internet service provider's $500 million offering had finished Thursday after pricing at par earlier in the session via its Cequel Communications Escrow LLC and Cequel Communications Escrow Capital Corp. subsidiaries.

BI-LO, LLC/BI-LO Finance Corp.'s 9¼% senior secured notes due 2019 were seen trading Friday at 105¼ bid, 106 1/8 offered. The Greenville, S.C.-based supermarket operator had priced $140 million of those bonds on Thursday as an add-on to its existing $285 million, which had been sold early last year. The add-on bonds priced at 104.5 to yield 7.995%, but had not been seen trading around late Thursday.

Clear Channel climbs

Away from the new deals, a trader said that the bonds of San Antonio, Tex.-based media company Clear Channel Communications clearly dominated the junk bond most-actives list on Friday, given a boost by news that the company had moved to improve its balance sheet by launching a private exchange offer for up to $2 billion in term loans.

He said that Clear Channel's 9% notes due 2021 "topped the charts, with over $40 million traded. He saw the bonds trading all day in a 90½ to 91½ bid range before going home at 90¾ bid, which he called up 1 point.

He saw the company's 11% notes due 2016 "up a couple of points" at 77¼ bid, 78¼ offered, on volume of over $17 million.

A second market source called the bonds up just under 3 points at around 771/2.

Its 10¾ notes due 2016 also gained more than 2 points to end at 771/4, although turnover in that bond was only about $4 million.

At another desk, a trader said the shorter-dated issues especially moved up on the news, seeing the 5½% notes due 2014 in a 94-95 context, versus levels around 92 previously.

He also saw the 2016 notes trade as high as 79 bid, 80 offered before settling back in to a 76-77 range, calling them "probably still up a couple points."

Another trader placed the 9% notes due 2021 at 90 7/8, up over a point on about $35 million traded. The 11% notes were deemed up a deuce at 761/2, with at least $15 million changing hands.

Traders in the bank-debt market said that the company's loans were also trading higher on the day.

Those gains came on news that the radio and outdoor advertising company wants to exchange some of its bank debt for new 9% priority guarantee notes due 2019. The notes would first be callable in July 2015 and contain MFN (most-favored nation) protection designed to enable participants to exchange their notes for new notes that may be issued in future loan-for-bond exchanges.

In addition to allowing for the exchange, Clear Channel's credit facility amendment would combine the term loan B and two delayed-draw term loans into one tranche that would keep the current pricing of Libor plus 365 bps, preserve revolver capacity if all revolver borrowings are repaid, eliminate certain restrictions on Clear Channel Outdoor Holdings Inc.'s ability to incur debt and gain more flexibility to prepay term loan A debt.

Sprint backs off a little

One of the traders advanced a theory that besides Clear Channel's own news about its planned exchange for the loans, the company's bonds may have also firmed because "the whole communications sector is in play, on the Sprint takeover."

However, the Overland Park, Kan.-based Number-Three U.S. wireless carrier's bonds - which had soared by multiple points in heavy trading on Thursday on the news that it was in talks with Japanese wireless company Softbank Corp. on a possible big investment by the latter company in Sprint - backed off a little from those peaks on Friday, on reduced volume.

Sprint Capital Corp.'s 6 7/8% notes due 2028 opened down 1 1/8 point on the day, and finished down by 1/8 at 101¾ bid, a market source said, on volume of over $31 million - one of the busiest junk issues on the day, but nowhere near the $136 million of those bonds that changed hands Thursday, when they zoomed by 9 points.

Its 8¾% notes due 2032, which had knocked down over $47 million in volume on Thursday in rising 11 points, saw only about half of that volume Friday, at $23 million. The bonds fell a point in early dealings, but only ended down ¼ point at the end of the day at 114¼ bid.

The bonds had risen smartly on Thursday as published reports said that should a deal be inked, Tokyo-based Softbank might pay as much as 1 trillion yen, or about $12.8 billion, for as much as a 70% stake in Sprint, which is looking for new sources of capital to continue funding its next-generation LTE network buildout so it can compete with larger rivals Verizon Wireless and AT&T Mobility, while holding off Number-4 player T-Mobile USA Inc.

Chesapeake up on sale plans

Away from communications credits, the news that Chesapeake Energy is putting on the auction block leasehold rights on some of its oil-producing properties in Western Oklahoma, hoping to use the proceeds to continue its planned debt reduction as well as funding other operations, pushed the Oklahoma City-based natural gas company's bonds up several points.

Its 9½% notes due 2015 gained ¾ point to 112 bid, on volume of over $10 million, while its 6 1/8 notes due 2021 also gained ¾ point to end 101 7/8 bid, on volume of around $4 million.

Market indicators turn mixed

Overall, statistical indicators of junk market performance turned mixed on Friday, after having risen across the board Thursday as they broke out of a two-session slump before that. The indicators were also mixed to mostly lower versus their levels of a week earlier.

The Markit Group CDX North American Series 19 High Yield Index lost 5/32 point on Friday, finishing at 99 11/16 bid, 99 13/16 offered; on Thursday, it had gained ¼ point.

The index was also down from its week-earlier level of 100 9/16 bid, 100 13/16 offered.

The KDP High Yield Daily Index meantime eased by 2 basis points Friday to end at 74.28, after moving up by 7 bps on Thursday.

Its yield was unchanged for a second consecutive session, at 6.06%, after having risen by 3 bps on Wednesday. A week earlier, the index stood at 74.41, with a 6.02% yield.

But the widely followed Merrill Lynch U.S. High Yield Master II Index notched its second consecutive advance Friday as it rose by 0.030%, on top of Thursday's 0.206% advance.

Friday's gain lifted its year-to-date return to 12.717% on Friday, versus 12.683% on Thursday. However, those levels still remain below the 2012 peak level so far of 12.814%, set on Sept. 19.

On the week, the index was up 0.172%, its second straight weekly gain. In the week ended Oct. 5, the index had risen 0.494%, to lift the year-to-date return to 12.523%.

Stephanie N. Rotondo and Sara Rosenberg contributed to this report

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