Credit Acceptance prices, rises, Equinox lags; Coleman coming; Blockbuster beatdown continues

By Paul Deckelman and Paul A. Harris

New York, Jan. 25 - Credit Acceptance Corp. priced an upsized offering of senior secured notes on Monday, the junk bond market's sole pricing of the day. Traders said the Southfield, Mich.-based auto loan provider's new bonds firmed solidly when they were freed for secondary dealings.

They could not say the same thing about Friday's deal from Equinox Holdings, Inc., which was heard to be struggling in the aftermarket.

High yield syndicate sources meantime saw the forward calendar, which already tops the $2 billion mark, building further, with new-deal announcements from Appleton Papers Inc. and Cenveo Corp. Each plans to bring a tranche of secured notes to market this week - papermaker Appleton's likely on Friday and print products producer Cenveo's expected at the end of a short mid-week roadshow slated to start on Tuesday.

Also heard hitting the road to market deals, though without formal company announcements, were Reader's Digest Association, Inc. and CNG Holdings, Inc. Reader's Digest, best known for its venerable and iconic little magazine, will price its deal on Friday, while CNG, which provides consumer payday loans under the Check 'n Go name, is expected next week. Italian gaming technology company SNAI SpA, is meanwhile shopping a euro-denominated secured notes offering to Continental and U.K. investors via a multi-city roadshow.

The sources further said that price talk emerged on Coleman Cable, Inc.'s $235 million offering of eight-year notes; the Waukegan, Ill.-based electrical and electronic wiring manufacturer's deal is expected to price on Tuesday afternoon.

Away from the new-deal names, traders saw most market indicators continuing to point lower, with Blockbuster Inc.'s bonds once more getting bombed, for a third straight session, continuing the big slide which began last Thursday on bearish guidance from the movie-rental company.

On the upside, Catalyst Paper Corp. sweetened the terms of its previously announced offer to give holders of its 8 5/8% notes due 2011 new, higher yielding, secured notes maturing in 2016 in exchange for their current bonds, which sent the latter up more than 6 points on the session.

Credit Acceptance upsizes

Credit Acceptance Corp. priced an upsized $250 million issue of 9 1/8% seven-year senior secured notes (B1/BB-) at 97.495 to yield 9 5/8%, on Monday.

The yield printed at the wide end of the 9½% area price talk.

Credit Suisse Securities ran the books for the deal, which was upsized from $225 million.

Proceeds will be used to pay down the company's revolving credit facility and a portion of its revolving secured warehouse facilities.

Coleman talks $235 million

Coleman Cable talked its $235 million offering of eight-year senior notes (B3/B) at the 9¼% area.

The books close at noon ET on Tuesday, or 2 p.m. ET for accounts seeing the deal on Tuesday. Pricing is expected after that.

Bank of America Merrill Lynch and Wells Fargo Securities are joint bookrunners for the debt refinancing deal.

Reader's Digest to bring floater

Reader's Digest Association began a roadshow on Monday for its $525 million offering of seven-year senior secured first-lien floating-rate notes (expected ratings B1/B+).

The roadshow wraps up on Friday and the notes are expected to price on the same day.

JP Morgan, Bank of America Merrill Lynch, Credit Suisse and Goldman Sachs & Co. are joint bookrunners for the debt refinancing, part of the publisher's exit from Chapter 11.

Cenveo starts Tuesday

Cenveo will begin a brief roadshow on Tuesday for its $375 million offering of eight-year senior secured notes.

The roadshow concludes on Wednesday.

Bank of America Merrill Lynch, Morgan Stanley and RBS Securities are joint bookrunners for the deal.

Proceeds will be used to repay bank debt.

Appleton to sell $300 million

Appleton Papers plans to price a $300 million offering of five-year senior secured notes (B1/B+) on Friday.

Broadpoint Gleacher Securities and Goldman Sachs & Co. are joint physical bookrunners.

Proceeds, together with borrowings under Appleton's new revolver, will be used to repay amounts outstanding under Appleton's existing credit facilities.

Check 'n Go plans secured notes

CNG Holdings, the holding company for alternative financial services provider, Check 'n Go, will begin a roadshow on Tuesday for its $200 million offering of five-year senior secured notes (B2/B).

The roadshow wraps up on Feb. 4.

Jefferies & Co. has the books for the debt refinancing and general corporate purposes deal.

SNAI roadshows €350 million

Italian gaming technology company, SNAI SpA began a roadshow on Monday in Milan for its €350 million offering of seven-year senior secured notes (Ba3//).

The roadshow moves to Paris on Tuesday, to London and Edinburgh on Wednesday, and to Amsterdam and Frankfurt on Thursday.

BNP Paribas, UBS Investment Bank and UniCredit Bank are joint bookrunners.

Proceeds will be used to refinance debt, as well as to fund the acquisition of Video Lottery Terminal rights and for general corporate purposes.

New Credit Acceptance notes seen stronger

When the new Credit Acceptance 9 1/8% notes were freed for secondary dealings, a trader heard the issue quoted at 98½ bid, 99½ offered, although he added that he "never really saw it trade - it was kind of crazy."

At another desk, a trader quoted the new bonds as having traded at 98 5/8 bid, 99 3/8 offered - well up from the 97.495 level at which the bonds had priced earlier in the day to yield 9 5/8%.

Equinox an exercise in frustration

A trader said that he "did not see Equinox [Holdings] on Friday or today," wondering where the New York-based health club operator's $425 million of 9½% second-lien senior secured notes due 2016 might be.

Another trader said that the new deals which priced last week "didn't trade at all." He said that he had seen all of "one picture" on Equinox, seeing the bonds at 98¾ bid, 99¼ offered. "Someone hit the bid and then - nothing."

At yet another desk, a trader saw the Equinox issue at 98¼ bid, 99¼ offered - in from the 98.881 level at which the deal - which was upsized from the originally announced $400 million - priced on Friday to yield 9¾%.

Manchester United moves lower

A trader said that MU Finance plc's dollar-denominated 8 3/8% senior secured notes due 2017 opened trading at 97½ bid, 98½ offered, and actually got as good as 98¼ bid, versus the 98.065 level at which the financial arm of England's famed Manchester United soccer franchise had priced its $425 million of the bonds on Friday to yield 8½%, as part of a big dual-tranche deal which also included an offering of sterling-denominated notes.

After the promising start, however, the bonds moved back down to below issue, going home, the trader said, at 97¾ bid.

Market indicators stay mostly lower

Among the established bonds with no new-deal connections, a trader saw the CDX Series 13 index up by 1/8 point Monday to 97 bid, 97½ - a small gain to be sure, but the first in over a week, especially coming on the heels of back-to-back falls of more than a full point in the index on both Thursday and Friday.

The KDP High Yield Daily Index, however, remained on the slide, down another 17 basis points on Monday to end at 71.09, after having plummeted 48 bps on Friday. Its yield, meantime, widened out by 7 bps, to 8.18%, after having ballooned out by some 15 bps the previous session.

Advancing issues remained behind decliners for a fifth straight session on Monday, by around a seven-to-five margin.

Overall market activity, as measured by dollar volume levels, fell by 22% from Friday's pace.

A trader called Monday's morning hours "really strange. I don't know if everyone had a real tiring weekend, but it just seemed like it took a few hours to get things moving. It started out very quiet - maybe all the football games" on Sunday and the accompanying parties were a factor, he said. While many of those at the parties were drinking either in celebration of their favorite team winning or were drowning their sorrows after a loss - and there was a lot of that going on in New York - "those that didn't watch the game just drank."

Most of the action, he said, was in Blockbuster, although he said he also saw "a lot of" activity in Clear Channel Communications Inc. The San Antonio, Tex.-based media company's 9¼% "B tranche" notes due 2017, which he quoted at 101¼ bid, 102 - well in from last week's closing levels at 103¼ bid, 103¾ offered.

Another trader called the session "a little boring." He said that he saw "the tone was that some of the names were lower today," citing as an example Chicago-based packaging company Smurfit-Stone Container Corp.'s 8 3/8% notes due 2012, which "eased up a couple of points" to around the 85 level.

The first trader said that Monday "just one of those sessions - it was really quiet in the morning, and the, people sticking their toes in the water, and stuff having that feel that it's coming in. It's not like an avalanche was coming at you, but it does feel that the [heretofore bullish tide in junk] is turning. You watch the news and you get hit left and right by news which isn't good, including trouble coming out of Washington - everyone wanting to go after Wall Street, after anybody who is successful.

"There's just not a good feeling coming out of Washington right now. Then you pile on a Blockbuster or a NewPage Corp. - there's just no good news out there right now."

At another desk, a trader opined that "the real, real on-the-run stuff kind of hung in there - but anything with the slightest bit of a risk premium seemed to be a little weaker. Blockbuster, he said, "continues to be beat up a little bit. Level 3 [Communications Inc.] seems to be a little weaker. First Data [Corp.] seems to be lower, that sort of thing."

Blockbuster bloodbath rages on

A trader saw Blockbuster's 9% notes due 2012 "bouncing around in the 20s," after having fallen to such historical lows last week.

He saw "a boatload" of the bonds trading, going home at 22 bid, 24 offered, which he called down another 5 or 6 points from the levels the bonds held last week - when the bonds collapsed down into the 20s, on bearish guidance for full-year 2009 earnings after a poor year-wend holiday sales season, from pre-news levels around 61-62 earlier in the week. He said "a lot of the paper" had traded down around 221/2. "There was good volume in that name," he said; "it seems a little issue with them, not getting their numbers right."

Blockbuster, another trader quipped "must not have had a good weekend renting movies. He said that the 9s were probably the most actively traded issue in Junkbondland, with at least $55 million or round-lot trades showing on the Trace system, and, he said, "probably much greater than that."

He noted that the bonds had gone home on Friday offered at 25, and were trading around Monday inside a 211/2- 23½ context, "on decent size," with the last trades noted at 22 5/8 bid.

The Dallas-based movie-rental chain's 11¾% notes due 2014, which last week had fallen down into levels in the low 70s from prior levels approaching par, were last seen Monday trading at 70½ bid, 71½ offered, versus a Friday close of 72 bid, 74 offered.

"I don't know how much volume that traded," he said, explaining that it is not a Trace-tracked bond, "but we saw it trade a few times."

Catalyast climbs on sweeter deal terms

On the upside, a trader said that Catalyst Paper Corp. was "one of the names moving around." He said that the Richmond, B.C.-based paper company's "jumped up, though on not a whole lot of trading," following the news that it had amended the terms of its previously announced exchange offer and consent solicitation to the holders of its 8 5/8% notes due 2011, "so that's why they [the bonds] did that."

He saw those bonds up 7 points on the session to an 88-89 context, while its 7 3/8% notes due 2014 "didn't move up as much," on "some trading activity," going home at 66½ bid, up a little less than a point, after trading all day within a 66-67 range.

Another trader pegged the latter bonds at 66½ bid, 68 offered, and saw the 7 3/8s in that same 66ish context, on "okay volume."

Catalyst - which launched its offer to exchange new 10% secured notes due 2016 for the existing 8 5/8s back in November but which has so far received just a tepid response from bondholders, with fewer than 10% having agreed to tender their bonds on those terms - announced on Monday that it had improved the terms of the deal in several areas. For openers, it upped the interest rate on the new bonds to 11% from the previous 10%, and will now give holders who tender $830 principal amount of the new bonds, with total consideration to also include a $50 per $1,000 early tender premium - versus the original consideration of $700 principal amount of new notes and 269 shares of common stock for each $1,000 principal amount of notes tendered plus a $25 early tender premium.

In addition, the company amended the offer so beef up the collateral backing the new notes of that they will be secured on a first-priority basis by all of Catalysts' assets, subject to certain exceptions.

Also among the papermakers, a trader saw New Page Corp.'s 10% notes due 2012 trading at 61½ bid, 62 offered, while its 11 3/8% senior secured notes due 2014 were at 96½ bid, 97½ offered, which he said "seemed pretty unchanged to me."

He said he saw "not a lot of volume" in the 10s.

The Miamisburg, Ohio-based coated paper company's bonds had slid over several sessions last week - the 10s from the lower 80s down to current levels in the 60s, and the 11 3/8s from a round par into the mid-90s - on the news of the abrupt resignation of the company's chief executive officer, coupled with quarterly financial results which analysts said were weak and underlined the problems facing the whole coated-paper industry.

The trader also said that "virtually none" of the 12% notes senior subordinated notes due 2013 traded.

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