Oxford, Medex unveil new deals; Charter, WestPoint sales dominate secondary

By Paul A. Harris

St. Louis, April 28 - With the month of April winding down, Monday's high yield session produced a modicum of news in both the primary and secondary markets.

No terms emerged on any new issuance, Monday, however Atlanta apparel firm Oxford Industries, Inc. announced it would invite high yield investors to try on its new eight-year senior notes. The $175 million deal hit the road on Monday. And Dublin, Ohio critical care products maker Medex, Inc., will attempt to inject $175 million worth of 10-year notes onto the forward calender during the first half of May.

In secondary trading, attention focused on bid-wanteds for two names, Charter Communications, Inc. and WestPoint Stevens Inc.

Charter was seen to firm smartly during the session while WestPoint Stevens delinced.

However overall there was relatively little trading activity and one source characterized the session as "eerily quiet".

Two pieces of Charter Communications' paper - $1.7 million of its 10¾% notes due 2009 and $4.4 million of its 9 5/8% notes due 2009 - were put for bid at 3.00 p.m. ET during Monday's session, a source advised Prospect News.

"That caused some jockeying around in Charter," the source said, although a trader who spoke to Prospect News two hours later had not seen it.

In the wake of the bidding, one source said the Charter 103/4s traded at 66.5 and the 9 5/8s traded at 65.275 - although the trader commented that the level on the 103/4s "seems high."

Another trader saw Charter's 9 5/8% notes quoted at 63.5 bid, 64.5 offered during the morning, and said they were up two points on the session.

Another source quoted the Charter 9 5/8s having traded up to 64 from 62.5, while the 103/4s were up to 65.5 from 63.5.

One source told Prospect News that the bondholder who put the Charter paper up for bid had done likewise with $8 million of WestPoint Stevens' 7 7/8% notes due 2008.

Late Monday a source told Prospect News that those bonds had gone down to 18.5 from 22.5 during the week of April 21, but were not seen to have moved during Monday's session.

However an informed source - who advised Prospect News that both the Charter and the WestPoint Stevens paper had been put up for bid by the same party - said that in the bidding the WestPoint Stevens paper traded 16 5/8.

Aside from the news of the existing paper of Charter and WestPoint Stevens, sources reported the secondary market was quiet.

There was some agreement among them that a likely reason is that investors are waiting to see how the "substantial amount" new issuance expected to price during the April 28 week is transacted. There is already $3.1 billion of deals lined up for the week.

"Is AMG going to come to a screeching halt and suddenly people have brought a bunch of new issuance to market and then, 'Oops! there goes the bid in the secondary'?," one trader asked.

"I think that's what people are a little concerned about," he said.

"Look how much we've rallied," the source added. "It's incredible. Some bonds have tripled. Nortel has tripled.

"Have things gotten that much better? I don't think so."

Secondary market sources have been telling Prospect News that in response to the nine uninterrupted weeks of inflows to high-yield mutual funds - in conjunction with anecdotal reports of substantial flows of institutional money into junk -prices in the secondary market have been "bid up" substantially.

So Prospect News asked the trader if investors, in the face of such a bid-up, might be feeling some vertigo.

"I think so," said the trader. "I wouldn't be diving deep in the credit barrel for yield right now. I'd rather see some improving numbers before I start playing the triple-Cs, bidding that stuff up.

"Anything that rallies this far this quickly when I haven't seen any underlying strength in the economy leaves me scratching my head."

Prospect News followed up by asking the trader whether apprehensions about a sudden reversal of the flows into junk might be in order.

"I wouldn't be surprised to see a slow, painful grind south," the source said. "Right now the market is spoiled. If you have an AMG number that's plus $200 million, everybody is going to worry, whereas four months ago that would have looked great."

Aside from the above-mentioned plays in Charter and WestPoint Stevens, little else rated mention among secondary market sources on Monday.

Meanwhile, although no transactions priced during Monday's primary market session two new deals came into view.

Oxford Industries began the roadshow Monday for $175 million of eight-year senior notes. The deal, to finance the cash portion of its acquisition of Viewpoint International, Inc., is expected to price on May 6 via Merrill Lynch & Co.

Also word circulated of a new deal from Dublin, Ohio critical care products seller Medex, Inc. It is expected to bring $150 million of new 10-year senior subordinated notes (B3/B-) during the first two weeks of May via Lehman Brothers and Wachovia Securities, Inc.

The company will also obtain a $200 million credit facility, with proceeds used to help fund Medex and One Equity's leveraged buyout of Johnson & Johnson's Jelco peripheral IV catheter business.

Price talk and syndicate information emerged Monday on the two-tranche $800 million Rule 144A bond offering from Owens-Brockway Glass Container, Inc., which is expected to price on Wednesday, according to a syndicate source.

Unusually, the two tranches have slightly different bookrunning groups.

The company's $450 million of eight-year non-call-four senior secured notes is coming via bookrunners Deutsche Bank Securities Inc., Bank of America Securities and Citigroup and talk is for a yield in the 7¾% area.

The $350 million tranche of 10-year non-call-five senior notes is talked 50 basis points behind the senior secured tranche, with the bookrunning team comprised of Deutsche Bank Securities, Banc One Capital Markets and Citigroup.

And price talk of 8 3/8%-8 5/8% emerged Monday on Phillips-Van Heusen Corp.'s upcoming $150 million of 10-year senior notes (B2/BB-), according to a syndicate source. The deal is expected to price Tuesday afternoon or on Wednesday

Credit Suisse First Boston, JP Morgan and Lehman Brothers are joint bookrunners.

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