Clear Channel lower as company mulls raised offer; Harrah's off ahead of numbers

By Paul Deckelman and Paul A. Harris

New York, May 7- Clear Channel Communications Inc.'s bonds were seen easier, after the private equity firms trying to buy out the San Antonio, Tex.-based radio and outdoor advertising giant asked the company's board to reconsider the raised offer it rejected last week, making it more possible, at least in theory, that the acquisition plan may be approved - which would be bad news from a bondholder's perspective.

Bonds of Harrah's Entertainment Inc. were quoted lower ahead of Tuesday's scheduled release by the world's largest casino operator of its first-quarter earnings, which could continue the trend of disappointing results reported by several sector peers.

Primary activity remained muted.

Sources blamed the ghostly quiet that pervaded the Monday junk market partly on the bank holiday in the United Kingdom.

However one high yield syndicate official remarked that the quietness and the near-total absence of a new issue calendar are astonishing given what appear to be good market conditions and notably tight executions on most of the recently priced junk transactions.

Meanwhile a buy-side source, spotting 10-year government paper unchanged on the day yielding 4.64%, said that the only news of which the Street appeared to take note was a reported $13.5 billion increase in consumer credit in March, way more than the $4.0 billion that had been expected.

Clear Channel lower

A trader said that Clear Channel's debt was lower on news of the private equity firms' request. He quoted its 5½% notes due 2014 as having lost a point at 87.5 bid, 88.5 offered.

At another desk, those bonds were seen down nearly 2 points on the day to the 87.75 level - and down still further from their peak intra-day levels above 91.

The bonds were gyrating around against a backdrop of yet another attempt by Bain Capital Partners LLC and Thomas H. Lee Partners LP to get the company's board of directors to sign off on their buyout offer. Last week, the board rejected the latest offer by the two private equity companies, which would have paid shareholders $39.20 per share, or $19.6 billion total. That offer was up from the $39 per share offer, offer, or $19.5 billion total, which they had offered in April, and which was, in turn, higher than their original $37.60 per share bid made last fall.

Although the board had already nixed the second sweetened offer and had scheduled a shareholder vote on Tuesday, with more than enough proxies already submitted to kill the buyout transaction, but it announced Monday that Tuesday's meeting had been postponed until May 22, and said it was in continued discussions with Bain and Lee.

That raises the possibility that yet another revised bid may emerge from the talks, one more to the liking of shareholders, who are said to be holding out for at least $40 or $41 a share.

The fact that the buyout offer is still technically alive was seen as unsettling to bondholders, since the buyers are expected to borrow heavily to fund the buyout transaction, increasing the company's debt load radically and decreasing its creditworthiness. Under the proposed acquisition, Clear Channel would borrow more than $22 billion to get the buyout deal done, should it be okayed by the shareholders - $2.6 billion of junk bonds, which would be one of the largest junk megadeals this year, and $19.525 billion of bank credit facilities.

Harrah's off ahead of numbers

Harrah's Entertainment's 5 ¾% notes due 2017 were seen having fallen nearly 3 points on the session to just above 83 bid. Traders noted that the Las Vegas-based gaming giant - the world's leading casino operator - is scheduled to release first quarter numbers on Tuesday. While analysts are generally expecting per-share earnings around $1, some in the market are wondering whether Harrah's will disappoint, the way rival operator MGM Mirage and Las Vegas Sands did when they released numbers this past week.

The performance of Number-Two industry player MGM Mirage, many of whose casinos sit right on the famed Las Vegas Strip across from or adjacent to Harrah's properties, was said to have been hurt by a decline in revenues at some of those big Vegas resorts, blamed on higher gasoline prices and continued consumer uncertainty about the economy's direction.

Pilgrim's Pride better

Also on the earnings front, Pilgrim's Pride Corp.'s 7 5/8% notes due 2015 were seen by a trader up a point at 102.25 bid, 103.25 offered.

Another market source said that its 8 3/8% notes due 2017 were up about ¾ point to the 102.75 level on very active trading.

While the Pittsburg, Tex.-based poultry producer said last week that its fiscal second-quarter loss widened from a year ago due to the extra costs from its acquisition of rival Gold Kist Inc., it also said that the current fiscal third quarter would be profitable.

Broadview launches add-on

No issues priced during the primary market session.

Broadview Networks Holdings, Inc. launched a $90 million add-on to its 11 3/8% senior secured notes due Sept. 1, 2012 (existing ratings B3/B-), which it will present during an investor call on Tuesday.

Jefferies & Co. is the bookrunner for the merger-funding and general corporate purposes deal from the Rye Brook, N.Y.-based company which provides communications services to businesses.

The original $210 million issue priced at par on Aug. 15, 2006.

Broadview Networks takes its place on a conspicuously uncluttered new issue calendar for the May 7 to May 11 week.

It joins Deluxe Corp., which is roadshowing a $200 million offering of eight-year senior notes (existing Ba2/confirmed BB-) via JP Morgan and Wachovia Securities.

Meanwhile, Tennessee-based Noranda Aluminum Holdings Corp. is on the road through Wednesday with its $510 million offering of eight-year senior unsecured floating-rate toggle notes (B3/B-) - a Merrill Lynch deal.

The remainder of expected business is euro-denominated.

New World Resources BV started a roadshow on Monday for its €300 million offering of eight-year senior notes (B3/B), via Morgan Stanley, Barclays Capital and Citigroup.

Elsewhere SGL Carbon AG is in the market with a €200 million offering of senior floating-rate corporate bonds via Morgan Stanley and Deutsche Bank.

And Eurofins Scientific is in the market with a €68 million offering of perpetual securities which are expected to price before Friday's close.

Dresdner Kleinwort and HSBC are leading the deal.

Sell-side sources say they are expecting quick-to-market business to materialize.

However there was no news Monday on drive-by deals.

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