Nielsen, MDC Partners drive by to cap $8 billion week; new Jones Energy bonds trade up

By Paul Deckelman

New York, March 28 - The high-yield primary sphere had a burst of activity Friday to close out the week, in contrast with Thursday's more sedate session.

Nielsen Holdings NV, the consumer research and television ratings company, brought a quick-to-market $750 million of new eight-year notes.

There was also a $75 million same-session add-on from advertising and marketing firm MDC Partners, Inc. which increased the amount of its outstanding 2020 notes.

Syndicate sources also heard McDermott International, Inc., an engineering, procurement, construction and installation company for offshore oil and gas projects, unveil plans for a $500 million seven-year senior secured bond issue as part of a larger overall financing plan that includes a pending bank debt deal.

The $825 million of new U.S. dollar-denominated, junk-rated paper that was priced in two tranches more than doubled the $400 million in one deal that had priced on Thursday as Junkbondland recuperated from Wednesday's nearly $5 billion of issuance, the highest one-day volume total for the year so far.

The day's two deals topped off a week which saw $8.12 billion from domestic or industrialized-country issuers price in 17 tranches, up from the previous week, ended March 21, during which $4.12 billion of such paper had priced in 12 tranches, according to data compiled by Prospect News.

Friday's deals also raised the year-to-date issuance total to $66.32 billion 141 tranches - although that continued to lag almost 25% behind the primary pace of a year ago, when $88.19 billion had priced in 190 tranches by this point on the calendar, according to the data.

The new bonds were not seen in the aftermarket on Friday.

Traders did see Jones Energy Holdings LLC's new eight-year notes, which had priced late Thursday; when they were freed for secondary dealings on Friday, traders said the oil and gas operator's new bonds moved up nicely.

However, they saw an otherwise mostly dull market, with little or no interest in other recently priced offerings.

Statistical junk performance indicators were higher across the board on Friday, after having turned lower on Thursday.

They were also better than their levels of the previous Friday for a second consecutive week.

Nielsen drives by

The big deal of the day came from Nielsen, which priced $750 million of senior notes due 2022 (B1/BB/BB) via its Nielsen Finance LLC and Nielsen Finance Co. subsidiaries, a high-yield syndicate source said.

The quick-to-market transaction priced at par to yield 5%, in line with pre-deal market price talk.

The issue was brought to market by a large syndicate of joint bookrunners led by J.P. Morgan Securities LLC and including Citigroup Global Markets, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., HSBC Securities (USA) Inc., Morgan Stanley & Co. Inc., RBC Capital Markets Corp. and Wells Fargo Securities LLC.

Nielsen - with headquarters in New York and in Diemen, the Netherlands - is a global information and measurement company with leading market positions in marketing and consumer information, television ratings and other media measurement, online intelligence and mobile measurement.

It plans to use the proceeds to repay term loan borrowings.

The bonds came to market too late in the day for trading in the secondary sphere.

MDC brings add-on deal

Earlier in the session, MDC Partners, Inc. priced a $75 million add-on to its existing 6¾% senior unsecured notes due April 1, 2020 (B3/B-).

High-yield market sources said that the quickly shopped add-on priced at 105.25 for a yield to worst of 5.276%.

The tap brings the total amount of the bonds now outstanding to $735 million. The company had sold an original $550 million tranche of those notes in a scheduled forward calendar offering that priced at par on March 15, 2013 after the deal was upsized from an originally announced $500 million. Then it made a return trip to the junk market last fall, bringing a $110 million first add-on in a quick-to-market deal that priced on Nov. 12 at 103.75 to yield 5.766%, after the offering was upsized from $100 million. That original add-on brought the total amount outstanding at that time to $660 million.

J.P. Morgan Securities LLC and Goldman Sachs & Co. were the joint bookrunners on the deal - just as they had been on the original bond issue and the first add-on.

The New York-based marketing communications services company plans to use the proceeds from the offering for general corporate purposes, including the funding of deferred acquisition consideration, working capital, acquisitions and the repayment of any borrowings on its revolving credit facility.

Even though the add-on deal priced sufficiently early, traders saw no aftermarket dealings in MDC, citing the issue's small and illiquid size.

McDermott plans bonds

The high-yield syndicate sources also saw one name join the forward calendar - depleted as it was by Wednesday's nearly non-stop pricing parade.

They said that McDermott International unveiled plans to sell $500 million senior secured second-lien notes due 2021 as part of the company's recently unveiled overall financing program.

Timing on the issue has not been set yet.

The Houston-based engineering, procurement, construction and installation company for offshore oil and gas projects said that it plans to use the net proceeds from the offering of the notes, together with other financing sources, including proceeds from the pending refinancing of its outstanding credit agreement with a new first-lien credit facility, to refinance revolving credit facility indebtedness and for other general corporate purposes. The latter could include the funding of working capital requirements and capital expenditures.

It said that the new first-lien credit facility may include a term loan of up to $400 million and, potentially, a letter of credit facility.

Goldman Sachs Lending Partners LLC is the lead bank on the company's previously announced $950 million one-year senior secured covenant-light bridge loan.

Bank debt market sources said that pricing on the bridge loan is at Libor plus 650 basis points, increasing by 50 bps every three months until it hits a specified cap. The debt has a 1% Libor floor.

The bridge loan commitment letter expires on April 25.

Jones deal trades up

While there was no aftermarket trading seen in Friday's new deals, traders said that market participants seemed to show little interest in other recently priced deals - with the exception of the Jones Energy Holdings 6¾% notes due 2022.

That $500 million deal had priced at par on Thursday as a regularly scheduled forward calendar offering, after the Austin, Texas-based independent oil and natural gas company had upsized its issue from $300 million originally.

A trader quoted the bonds as having shot up to 102 bid, 102 3/8 offered during morning dealings.

Later on in the session, another trader saw the new bonds "basically trading around 102," seeing them going out in a 101¾ to 102 bid context.

Recent deals unseen

That trader said that the activity in Jones Energy "has kind of been it for new issues. That was the only thing that I really saw any flow or activity in."

He agreed with the general assessment, offered by a second trader, who said that most of the recent new deals just haven't grabbed the interest of investors and made them want to jump in and buy things.

He said that "you deal with all kinds of accounts - and you ask them 'are you in this [deal], are you in that [deal]?' and you keep hearing 'nope,' 'nope,' 'nope.'

"Who's buying all of these things?" he asked incredulously.

"It's it just like we're sitting here, waiting for this thing to go off a cliff?"

"Nothing is moving around," he asserted, "and everybody's on a conference call because there's so many deals - and it just grinds the market down to a halt."

Yet another trader agreed that Friday was "a very boring day - every uneventful"

Market indicators strengthen

Statistical junk performance indicators were higher across the board on Friday, after having mostly turned downward on Thursday.

They were also better than their levels the previous Friday for a second consecutive week.

The Markit Series 22 CDX North American High Yield Index gained ¼ point to end at 107 3/16 bid, 107¼ offered.

Thursday was the first day that the Series 22 index was trading, after its semi-annual roll into the new series.

Friday's level was therefore not comparable to where the index had closed at the end of the previous week on Friday, March 21, when the Series 21 index had finished at 107 25/32 bid, 107 27/32 offered.

The KDP High Yield Daily Index rose by 5 basis points to close at 74.91, after having eased by 4 bps on Thursday.

Its yield was unchanged for a second consecutive session on Friday, stable at 5.24%, after having tightened by 2 bps on Wednesday, its second straight decline.

The levels compared favorably with the previous Friday's 74.82 index reading and 5.27% spread.

The widely followed Merrill Lynch High Yield Master II Index moved up by 0.038% on Friday, after losing 0.012% on Thursday, which snapped a streak of four consecutive advances before that.

Friday's gain lifted its year-to-date return to 2.893% - a new peak level for the year so far - up from 2.854% on Thursday and up as well from Wednesday's 2.867%, which was the former peak level for 2014 so far.

The index rose by 0.212% on the week, its second consecutive weekly gain. During the previous week, it had gained 0.262%, raising the previous Friday's year-to-date return to 2.675%.

Aleesia Forni and Sara Rosenberg contributed to this report

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