Coleman, Fage deals price, Crosstex, Hudson slate; Zions zooms, Blockbuster bounces back

By Paul Deckelman and Paul A. Harris

New York, Jan. 26 - Coleman Cable, Inc. and Fage USA Dairy Industry Inc/Fage Dairy Industry SA successfully priced new high yield bond deals on Tuesday.

When the Coleman Cable bonds were freed for secondary dealings, the Waukegan, Ill.-based electrical and electronic and cable manufacturer's new deal was seen to have edged up a little from its issue price, although there was not a lot of trading, while Greek dairy products producer FAGE's new notes did not make an aftermarket appearance.

The primary side forward calendar meantime added two new upcoming deals, as Crosstex Energy, LP/Crosstex Energy Finance Corp. and Hudson Products Corp. separately announced plans to sell bonds. Syndicate sources heard both companies hitting the road to market their offerings to prospective investors, with HVAC equipment maker Hudson's issue expected to price on Friday, while natural gas operator Crosstex will take a little longer to make its case, with pricing scheduled for the middle of next week.

No definite pricings are on tap for Wednesday, although market participants speculated that Ryerson Holding Corp. could be a candidate, following the formal end of the Chicago-based metals company's roadshow. Other offerings, from such companies as Cenveo Corp., Regent Seven Seas Cruises, Libbey Glass Inc., Readers Digest Association, Inc. and Appleton Papers Inc., are expected to come to market at the end of the week.

In the secondary market, away from new-deal-related names, Zions Bancorporation's bonds were heard to have firmed smartly in heavy trading after the Salt Lake City, Utah-based regional banking company reported favorable fourth-quarter results, including a sharply lower loss that surprised analysts.

Blockbuster Inc.'s battered bondholders got some relief, as the movie-rental giant actually moved up on the session, ending three days of painful pounding of its paper.

Coleman Cable prices $235 million

In Tuesday's primary market Coleman Cable, Inc. priced a $235 million issue of 9% eight-year senior notes (B3/B) 98.597 to yield 9 ¼%.

The yield printed on top of price talk.

Bank of America Merrill Lynch and Wells Fargo Securities were joint bookrunners.

Proceeds will be used to fund a tender for all of the company's outstanding 9 7/8% notes due 2012.

Ryerson raises $220 million

Ryerson Holding Corp. raised $220 million with an issue of 14½% five-year senior discount notes (Caa3/CCC).

The notes, which priced in a face amount of $483 million, came at a reoffer price of 45.598, resulting in a yield of 16.32%. They have a zero coupon and an accretion rate of 14½%.

Bank of America Merrill Lynch and UBS Investment Bank were joint bookrunners.

Proceeds will be used to fund a cash distribution to shareholders.

Fage prices atop talk

Also Tuesday, Greece's Fage USA Dairy Industry, Inc. and Fage Dairy Industry SA priced a $150 million issue of 9 7/8% 10-year senior notes (B3/B-) at 93.278 to yield 11%.

The yield printed on top of the price talk.

Citigroup ran the books.

Proceeds will be used to refinance €20 million of the Athens, Greece-based dairy company's outstanding 7½% notes due 2015, for capital expenditures and for general corporate purposes.

Crosstex roadshow starts Wednesday

Crosstex Energy, LP and Crosstex Energy Finance Corp. will begin a roadshow on Wednesday for a $700 million offering of eight-year senior notes.

The roadshow wraps up on Feb. 3.

Bank of America Merrill Lynch, BNP Paribas, RBC Capital Markets, Wells Fargo Securities, UBS Investment Bank and Goldman Sachs & Co. are joint bookrunners.

Credit ratings remain to be determined.

Proceeds will be used to repay the company's outstanding senior secured notes.

Hudson Products kicks off $250 million

Elsewhere Hudson Products Holdings Inc. began a roadshow on Tuesday for a $250 million offering of six-year senior secured second-lien notes.

The deal is set to price on Friday.

UBS Investment Bank will run the books.

Proceeds will be used to prepay the company's existing credit facility.

The notes come with three years of call protection.

Credit ratings remain to be determined.

Coleman creeps up

When the new Coleman Cable 9% notes due 2018 were freed for secondary dealings, two traders saw the bonds at 98 5/8 bid, 99 1/8 offered, versus the 98. 597 level at which the $235 million issue priced earlier in the session, to yield 9¼%.

Another trader quoted the bonds as going home having edged up to 99 bid, 99½ offered.

Fage doesn't trade

A trader saw no sign of the Fage Dairy 9 7/8% notes due 2020, $150 million of which had priced during the session at 93.278 to yield 11%.

He said the deal was "a little too small - I don't think anyone's going to buy it in order to flip it."

Market indicators still in a rut

Among established bonds, a trader saw the CDX Series 13 index up by ¼ point Tuesday to 97½ bid, 97¾ offered, following Monday's 1/8 point gain - a contrast to two straight sessions last Thursday and Friday in which the index fell by more than one full point each day.

The KDP High Yield Daily Index, however, continued to struggle, down another 14 basis points on Tuesday to end at 70.95, after having slid by 17 bps on Monday. Its yield, meantime, increased by 5 bps to 8.23%, after having widened out by 7 bps the previous session.

Advancing issues remained behind decliners for a sixth straight session on Tuesday, although they had closed the gap to just a couple dozen issues out of the more than 1,600 tracked.

Overall market activity, as measured by dollar volume levels, jumped by 48%from Monday's pace.

Zions bonds better on lower loss

A trader said that "a name that was very busy today" was Zions Bancorporation, whose split-rated bonds rose solidly in very active dealings after the regional banking company reported improved fourth-quarter financials from a year earlier, coming in with a smaller loss than Wall Street had been expecting.

"They had kind of decent, stable earnings," he said. "The writedowns seemed to be moderating, so with that stabilization, a lot of people are thinking that the company may be profitable in the second half."

He saw "north of $60 million" of the company's 7¾% senior notes due 2014 (nr/BBB-/BBB) changing hands, with "a lot of the activity" taking place with the paper straddling the 95 bid mark. Some of the trades took place as high as 97 bid, though most of the day's activity took place with the bonds between 95 and 96. He said the bonds were seen going home at 96½ bid, after "a few million" traded at that higher level late in the day..

Over the previous several days, he said, those bonds had been hanging around within a 94½ to 95½ range, "so today, they gapped up a little higher."

He also saw Zions' 5½% subordinated notes due 2015 (nr/BB+/BBB-) trading between 81-82, and here too, he said, "they also gapped up, after having been 1 to 1½ points lower."

Volume on the issue was in excess of $25 million - meaning the two Zions issues were among the most actively traded high yield issues. There may have also been some high-grade trading in the bonds, given their split rating.

Another market source pegged the 5½% notes at the 81 1/8 level, up slightly on the day, after having gotten as good as 81 3/8 earlier in the session, and saw the company's 6% notes due 2015 at 83 bid, up 4 points on the day.

Zions' Nasdaq-traded shares shot up by $1.16, or 6.47% on Tuesday to end at $19.08. Volume of 26.3 million shares was nearly four times the average daily turnover.

Zions, which operates in nine other Western states in addition to its Utah home base, announced after the close of trading on Monday that its fourth-quarter loss attributable to common shareholders shrank to $176.5 million, or $1.26 per share, down from a loss of $498.1 million, or $4.37 per share, in the year-earlier period, as the bank took considerably less in the way of charges and write downs. Its impairment charge for the latest quarter was just $2.2 million, versus the yawning year-earlier charge of $353.8 million, or $2.97 per share.

The $1.26 per share loss was well below the roughly $1.65 per share analysts had been expecting. The per-share results reflected a 23% increase in the number of shares outstanding in the latest quarter, following a stock offering.

Although the lender reported sharp rise in nonperforming assets - i.e. loans that are substantially past due ($2.33 billion in the latest period, more than double $1.14 billion a year earlier), and in net loan and lease charge-offs -- loans written off as uncollectable which rose to $292.1 million, from $179.7 million a year ago - the company's chairman and chief executive officer, Harris H. Simmons, declared that Zions enters 2010 "feeling increasingly confident that peak levels of loan losses are behind us, and that economic conditions in the majority of our markets have begun to stabilize."

Blockbuster blunts the bleeding

Back among the pure high yield credits, a trader said that Blockbuster was "the main name again," seeing the Dallas-based movie rental company's 9% senior subordinated notes due 2012 trading in a 24-26 context, while its 11¾% senior secured notes due 2014 were ending at a 72-73 context.

There was "a lot of volume trading today" in the 9s , he said, "so they were a little bit all over the lot - 23-24-25 were where the trades were," with the bonds enduing at 25 bid, which he called up a point on the day.

He saw the 11¾% notes, meantime, also up from Monday's levels in a 69-70 range, "but they bounced" to around a 72 level going out.

Blockbuster, another trader said, had "decent volume" on the 9% notes, trading in a 23 to 25 range. "They were marching downward for the first part of the day, and then, probably in the last two hours [of trading activity] it seemed like it was one or two buyers, but someone did come in and was starting to buy some of the paper."

He saw the 9s going out at 24½ bid - well up from a 22ish context on Monday.

"Somebody decided, at mid-point through the day, that these things looked cheap."

Meantime, the 113/4s spent much of the day "straddling 70," in a 69-71 context, but again, later in the day, they had improved to around 70¼ bid, 71¼ offered, "up slightly from where they closed last night."

Catalyst coughs up some gains...

A trader saw Catalyst Paper Corp.'s 8 5/8% notes due 2011 - which had jumped about 6 or 7 points into the high 80s on Monday, on news that the Richmond, B.C. manufacturer had sweetened its previously announced exchange offer for those bonds - ending down a point at 86 bid. "But there was some trading," he cautiously acknowledged.

A market source at another desk also saw the Catalyst bonds retreat by a point to the 86 area.

...but NewPage not moved

In that same coated paper sector, a trader saw said that NewPage Corp.'s 10% notes due 2012 ending around 60-61, essentially unchanged from Monday, but on "good volume." Its 11 3/8% senior secured notes due 2014 were at 96-97, also around Monday's levels.

He further saw the Miamisburg, Ohio-based coated paper company's 12% senior subordinated notes due 2013 holding around a 41 bid level, so the NewPage bonds "sounded about the same today, but on decent volume," especially for the 10% notes.

The 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.

International Lease bounces back

A trader said that International Lease Finance Corp.'s bonds were higher, bouncing back after having fallen multiple points on Monday after having been downgraded by Standard & Poor's, its ratings cut two notches to BBB- from BBB+ previously as the ratings agency questioned whether the aircraft lease finance arm of troubled insurance giant American International Group Inc. will be sold any time soon. The Financial Times newspaper reported Tuesday that AIG has abandoned its efforts to sell the unit after concluding the relatively small potential profit wouldn't justify such an asset sale.

The trader saw the 4¾% notes due 2012 quoted "right around 87," which he called a couple of points higher versus Monday's levels, and said ILFC's 6 3/8% notes due 2013 were up by 3 points around 86. He said the $1 billion issue "is a good indicator" because of its liquidity, and said that there had been "good-sized trading" in it.

He noted that the ILFC bonds had fallen on Monday, but "made their way back up today," adding that while some issues were perhaps a point below where they had been before the initial retreat on Monday on the downgrade news, "they're almost back to where they were."

A market source at another shop said that the 6 3/8s finished at 841/2, up 1½ points, on brisk trading, while

ILFC's 5.30% notes due 2012 gained about 3 5/8 points to end at 86 5/8 bid, and its 5.40% paper, also due 2012, had firmed more than 2 points to 88 bid.

Northeast generates some questions

Some market participants were left wondering what, if anything was going on with Northeast Generation Co., whose normally little-traded 8.812% bonds due 2026 were being quoted as having pushed up to the 102 bid level late in the day - a 15 point gain-on several round-lot transactions. Those were the first trades in the bonds in literally weeks.

There was no fresh news seen out on the company - a subsidiary of Hartford, Conn.-based utility operator and merchant power producer Northeast Utilities.

Little Constellation movement

The news that Constellation Brands Inc. amended two of its bank debt facilities - a revolver and a term loan - and plans to call its 8 1/8% notes due 2012 for redemption next month caused little or no activity in the bonds of the Victor, N.Y.-based alcoholic beverages manufacturer and marketer.

A trader said the 8 1/8s were trading just slightly north of par, the level at which the $250 million issue will be redeemed on Feb. 25.

There was also little trading in its 7¼% notes due 2016 and due 2017; he said the latter were "maybe a hair better" than on Monday at 100¼ bid, 100¾ offered.

GM sheds Saab, comes back

A trader said that General Motors Corp.'s benchmark 8 3/8% bonds due 2033 had "moved back up" to a "27ish" level, with movements between 27 and 271/2. He called that up ½ point to a point on the day, on "decent trading."

During the day, the newswires buzzed with the story about how GM, seemingly against all odds, had successfully found a buyer for its troubled Saab unit, sparing GM the expense and trouble of just closing it down and getting nothing for it. Small Dutch luxury car manufacturer Spyker Cars NV will take the money-losing Swedish premium car line off GM's hands, paying $74 million in cash plus $326 million in preferred shares in Saab, so the Detroit auto giant can still retain a stake in Saab in the event that Spyker can actually turn things around - a scenario about which many analysts are skeptical.

A second trader saw the GM long bonds unchanged at 27¾ bid, 28¾ offered, while seeing GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 fall a point to 86 bid, 87 offered.

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