Vivint leads $2.4 billion day; junk softens post-election; coal drops on vote, James River

By Paul A. Harris and Stephanie N. Rotondo

Phoenix, Nov. 7 - High-yield primary market news volume remained intense on post-Election Day Wednesday. Four issuers brought a combined five tranches of dollar-denominated junk, raising a total of $2.4 billion

In the secondary, a trader said the market was "heavier" post-Election Day, though it was "nothing bone crushing."

The coal arena, however, got trampled, due in part to the belief that the re-election of president Barack Obama would be bad for the industry and in part to dismal earnings from James River Coal Co.

Meanwhile, ArcelorMittal paper "bounced back a little bit," a trader said. The bonds had declined in the previous session after being downgraded into junk territory by Moody's Investors Service.

In earnings news, Leap Wireless International Inc. was trading actively but unchanged after it posted quarterly results. Quicksilver Resources Inc. also reported and its debt put on a few points in response.

Vivint prices two-part deal

Vivint, Inc. priced the day's biggest new offering, $1.305 billion of high-yield notes in two tranches.

The deal included a $925 million tranche of seven-year senior secured notes (B1/B) which priced at par to yield 6 3/8%. The yield printed in the middle of the 6¼% to 6½% yield talk.

In addition Vivint priced a $380 million tranche of eight-year senior unsecured notes (Caa1/CCC+) at par to yield 8¾%. On the unsecured notes the yield came at the wide end of the 8½% to 8¾% yield talk.

Bank of America Merrill Lynch, Citigroup, Deutsche Bank, Morgan Stanley, Credit Suisse, Macquarie and Goldman Sachs were the joint bookrunners for the LBO deal.

Celanese drives by

Celanese US Holdings LLC priced a $500 million issue of non-callable 10-year senior notes (Ba2/BB) at par to yield 4 5/8%, on top of the yield talk.

Deutsche Bank, Bank of America Merrill Lynch, Citigroup, HSBC and J.P. Morgan were the joint bookrunners for the quick-to-market deal.

The Dallas-based global technology and specialty materials company plans to use the proceeds, together with cash on hand, to repay a portion of its existing senior secured credit facility and to make a contribution to the company's U.S. pension plan, which will reduce aggregate pension obligations.

Mattamy upsizes

Mattamy Group Corp. priced an upsized $500 million equivalent amount of eight-year senior notes (B1/BB).

The deal included a $300 million tranche of notes which priced at par to yield 6½%, on top of yield talk.

Mattamy also priced a C$200 million tranche of notes which priced a par to yield 6 7/8%. The Canadian dollar-denominated notes also priced on top of talk which had them yielding 37.5 basis points more than the dollar-denominated notes.

The deal was upsized from $450 million equivalent.

Joint global coordinators Credit Suisse and RBC were joint bookrunners for the debt refinancing. Citigroup was also a joint bookrunner.

iStar at the tight end

iStar Financial Inc. priced an upsized $300 million issue of non-callable senior notes due Feb. 15, 2018 (B3/B+) at par to yield 7 1/8%, at the tight end of yield talk that was set in the 7¼% area.

The amount was increased from $250 million.

Bank of America Merrill Lynch was the left bookrunner for the quick-to-market debt refinancing deal.

Land O'Lakes's split deal

In the crossover market, Land O'Lakes, Inc. priced an upsized $300 million split-rated issue of non-callable 10-year senior notes (Ba2/BBB-/) at par to yield 6%, on top of the yield talk.

The size was raised from $250 million initially.

Bank of America Merrill Lynch was the bookrunner for the debt refinancing deal that was priced utilizing the forces of both the high-yield and high-grade syndicate desks.

Terex talks two-part deal

Terex set price talk for an $850 million equivalent dual-currency offering of senior notes due May 2021.

The deal was rolled out on Wednesday and is expected to price on Thursday.

Terex Corp. is targeting a $530 million tranche size for dollar-denominated notes which will be registered with the Securities and Exchange Commission. Those notes are talked to yield 5¾% to 6%.

Meanwhile Terex International Financial Services Co. is targeting a €250 million tranche size for its Rule 144A and Regulation S for life notes. The euro-denominated notes are talked to yield 25 basis points behind the dollar-denominated notes.

Credit Suisse, Goldman Sachs, RBS and UBS are the joint bookrunners for the debt refinancing deal.

Talking the deals

With several deals expect in addition to Terex, Thursday figures to be a busy session.

Assorted issuers from outside the United States set price talk on Wednesday.

Australia's BlueScope Steel Ltd. and BlueScope Steel Finance talked a $300 million offering of six-year senior notes (B1/BB-) with a yield in the 8½% area.

Credit Suisse is the bookrunner.

Sweden's Perstorp Holding AB set price talk for its $1.09 billion multi-currency three-part offering of secured notes.

The specialty chemicals company is selling $660 million equivalent of dollar- and euro-denominated first-lien notes due in May 2017 (B2/B).

The dollar-denominated notes are talked to yield 8½% to 8¾%. The euro-denominated notes are talked to come 25 basis points behind the dollar-denominated notes.

Tranche sizes remain to be determined.

In addition Perstorp is offering $430 million of second-lien notes due in August 2017 (Caa2/CC) which are talked to yield 10¾% to 11%.

Joint physical bookrunner J.P. Morgan will bill and deliver for the dollar-denominated notes. Goldman Sachs, which is also a joint physical bookrunner, will bill and deliver for the euro-denominated notes.

Italy's Rottapharm Ltd. talked its €400 million offering of seven-year senior notes (Ba3/BB-) with a yield in the 6¼% area.

JPMorgan is the global coordinator. Banca IMI and Mediobanca are the joint bookrunners.

AmSurg roadshow for Thursday

News of roadshow starts in the global high-yield market surfaced on Wednesday.

AmSurg Corp. plans to start a roadshow on Thursday for a $250 million offer of eight-year senior notes (Ba3/B).

An investor call is also scheduled for Thursday.

The deal is set to price during the week ahead.

SunTrust, Merrill Lynch, Citigroup and Wells Fargo are the joint bookrunners for the debt refinancing.

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Global A&T Electronics' deal

Singapore-based Global A&T Electronics Ltd. has scheduled a roadshow for a six-year issue of $625 million notes.

The marketing trip will begin Thursday and travel through Asia and the United States before ending on Nov. 19.

Merrill Lynch, Credit Suisse, JPMorgan and UBS are the bookrunners for the debt refinancing.

Melco roadshow starts Thursday

Studio City Finance Ltd., a subsidiary of Melco Crown Entertainment Ltd., plans to start a roadshow on Thursday for its $825 million offering of eight-year senior notes.

Deutsche Bank is the bookrunner for the capital expenditures deal. ANZ, Merrill Lynch, Citigroup, Credit Agricole, UBS and BOCI are the joint bookrunners.

Market ends soft

In trading, high-yield bonds were softening Wednesday, as evidenced by market indicators.

The KDP High Yield Index reading for the day was 74.24, with a 6.09% yield. That compared to 74.39, with a 6.05% yield, the day before.

The CDX North American Series 19 High Yield Index meantime lost nearly a point, ending at 98 7/8 bid, 99 offered.

Coal gets clobbered

James River Coal posted a loss for its most recent quarter that was larger than had been expected.

That news, combined with the re-election of Obama, did little to boost the sector as a whole.

A trader saw James River's 7 7/8% notes due 2019 falling 4 points to 623/4. Another trader said the issue had fallen 6 points to 631/4.

Among other coal names, Arch Coal Inc.'s 7¼% notes due 2020 dropped a deuce to 90, while the 7¼% notes due 2021 declined almost that much to 89.

And, Alpha Natural Resources Inc.'s 9¾% notes due 2018 closed at 1033/4.

For the third quarter, James River reported a net loss of $20.6 million, or 59 cents per share. That compared to a loss of $3.7 million, or 11 cents per share, the year before.

Revenues declined 5% to $288.1 million.

The coal producer also said that it had repurchased $61.4 million in debt at a discounted price of $23.9 million, or 39 cents on the dollar. Some in the market saw that as a positive for the company's bottom line, while others lamented the resulting decline in liquidity.

Liquidity was $172 million at the end of the quarter, versus $191.9 million the previous quarter.

James River's management also remarked that a potential for increased environmental regulations under Obama could negatively impact its balance sheet.

Still, the bigger issue at hand could be the price of natural gas.

ArcelorMittal rallies

ArcelorMittal's debt "bounced back" in the midweek session, following a decline on Tuesday that was sparked by a rating downgrade.

A trader saw the 6¼% notes due 2022 up over a point at 991/2, while the 4½% notes due 2017 rose nearly ½ point to 97 7/8.

The 5½% notes due 2021 closed around 97, up about 5/8, according to the trader.

Moody's cut the steelmaker's credit rating on Tuesday, citing challenging conditions in that space, as well as the company's own deteriorating financial performance.

Leap's profit boosts bonds

Leap Wireless' Cricket Communications Inc. 7¾% notes due 2020 were "active," a trader said, but unchanged at 103 3/8.

Leap swung to a profit in the third quarter due to a large gain from a spectrum license exchange.

Profit was 426.9 million, or 32 cents per share, versus a loss of $94.1 million, or 90 cents per share, the year before. Revenue was up 1.4% to $774 million.

Additionally, the company added 563,000 gross customers, though it lost 269,000 users during the quarter.

Quicksiler up despite earnings

A trader said Quicksilver Resources' 6 7/8% notes due 2015 were up 3 points on the day at 981/2.

However, the company's stock (NYSE: KWK) dropped 32 cents, or 9.52%, to $3.04.

On Tuesday, the oil and gas exploration company posted a loss of 4 cents per share on revenue of $177.7 million.

Revenue was down 31.6% year over year.

Supervalu mixed

Supervalu Inc.'s bonds were mixed at the end of Wednesday trading, according to market sources.

One source said the 7.45% notes due 2029 were up over 2 points at 621/4.

However, another source said the 8% notes due 2016 were off nearly a point at 96 bid.

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