Accellent, Hanger price, United Rentals, BWAY, CNG slate; American Achievement sets talk

By Paul Deckelman and Paul A. Harris

New York, Oct. 20 - Accellent Inc. and Hanger Orthopedic Group, Inc. came to market on Wednesday with new high-yield bond deals, syndicate sources said. While Hanger's $200 million offering, which priced at the tight end of price talk, traded around near its par issue price, Acellent's $315 million of paper, which priced at the wide end of talk, was not seen in the aftermarket, according to several traders, even though it had priced earlier in the day.

Also pricing was a euro-denominated add-on transaction from French investment group Wendel Investissement.

Tuesday's new deals from MarkWest Energy Partners, LP and Abengoa Finance, SAU, were seen by traders to be holding on to the gains they had notched late in that session after their respective pricings. Another Tuesday transaction, Host Hotels & Resorts, LP, traded off a little from issue as it moved into the aftermarket on Wednesday.

Away from names which actually priced, United Rentals (North America), Inc. announced plans for a $500 million offering of 10-year senior subordinated notes, the proceeds of which will go to redeem an issue of its outstanding bonds. Sources later heard that the Greenwich, Conn.-based equipment rental company's deal had been upsized to $750 million, with pricing expected on Thursday.

BWAY Parent Co., Inc. and CNG Holdings, Inc. were also seen shopping deals around the market, with CNG, a Cincinnati-based provider of alternative financial services for the unbanked, expected to price on Thursday and Atlanta container manufacturer BWAY listed as possible for either Thursday or Friday.

Another junk borrower expected to price during a busy Thursday is Austin, Tex.-based school yearbook publisher and class ring provider American Achievement Corp., after price talk emerged Wednesday on its offering of 51/2-year secured notes.

Traders said no non-new deal issues were really standing out, and market statistical indexes were mixed.

Accellent on the wide end

The primary market saw two new issues on Wednesday.

Accellent priced a $315 million issue of seven-year senior subordinated notes (Caa2/CCC+) at par to yield 10%, at the wide end of the 9 7/8% area price talk.

Goldman Sachs & Co., Credit Suisse, KKR Capital Markets, Wells Fargo Securities and UBS Investment Bank were the joint bookrunners for the debt refinancing deal.

Hanger prices at the tight end

Meanwhile Hanger Orthopedic Group priced a $200 million issue of eight-year senior notes (B3/B) at par to yield 7 1/8%, at the tight end of the 7¼% area price talk.

During a Tuesday call the company noted that it was "going into a pretty hot [high-yield] market," and expressed hopes that the deal could be executed with an interest rate in the 7% range.

Bank of America Merrill Lynch, Jefferies & Co., Oppenheimer & Co. and SunTrust Robinson Humphrey Inc. were the joint bookrunners.

Proceeds will go to repurchase the existing 10¼% senior notes due 2014 and for general corporate purposes.

The Hanger Orthopedic issue was not upsized although it could have been, according to a source close to the deal.

Participants included holders of the company's existing 10¼% notes, which are being taken out, as well as new accounts which saw the company during the roadshow, the source added.

United Rentals upsizes

United Rentals upsized its offering of 10-year senior subordinated notes to $750 million from $500 million on Wednesday ahead of the pricing.

The notes are talked with an 8¼% to 8½% yield.

The books close at 10:30 a.m. ET on Thursday, and the deal is set to price after that.

Morgan Stanley, Bank of America Merrill Lynch and Wells Fargo Securities are the joint bookrunners.

The Greenwich, Conn.-based equipment rental company will use the proceeds to call its existing 7% senior subordinated notes due 2014 and its 7¾% senior subordinated notes due 2013.

American Achievement sets talk

Meanwhile American Achievement talked its $365 million offering of 5.5-year senior secured notes (B3/B) with an 11% area yield.

The deal is set to price on Thursday morning.

Goldman Sachs & Co. is the left lead bookrunner, and UBS Investment Bank is the joint bookrunner.

Check 'N Go for Thursday

Also, CNG Holdings, Inc., the parent of Check 'N Go, plans to price a $60 million offering of non-rated five-year senior subordinated notes on Thursday.

Jefferies & Co. is the bookrunner for the general corporate purposes deal from the Cincinnati-based pay day loan service provider.

BWAY PIK toggle dividend deal

Finally, BWAY Parent Co., Inc. began a brief roadshow on Wednesday for its $125 million offering of five-year senior PIK toggle notes.

The roadshow wraps up on Thursday, and the deal is set to price on Thursday or Friday.

Bank of America Merrill Lynch and Deutsche Bank Securities are the joint bookrunners.

The notes come with two years of call protection and a 101% poison put.

Credit ratings remain to be determined.

Proceeds will be used to fund a distribution to equity holders.

Hanger bonds hang around issue

When the new Hanger Orthopedic Group 7 1/8% notes due 2018 were freed for secondary dealings late in the day, several traders saw the new bonds at 100¼ bid, 100¾ offered, versus the par level at which the $200 million deal had priced.

One of the traders, though, suggested that the bonds might not stay there too long.

"A lot of people" were looking at the deal before it priced, "I know a lot of accounts I talked to were going in on that name.

"It's a great name," he said of the Austin, Tex.-based company, which operates over 600 orthotic and prosthetic patient-care centers across 45 U.S. states and the District of Columbia. "A lot of better-quality high yield accounts own Hanger [existing bonds], so who wouldn't want to own it? I would, if I were a money manager, all day long."

It is, he continued, "a good 'go-go' name, a B3/B, a stable name, so why wouldn't it [do well]?"

He added that he "would be shocked" if the bond weren't trading up.

Accellent is ignored

While several traders were easily offering trading levels and color on Hanger and some of the week's other new deals, curiously, nobody spontaneously volunteered any information at all about the day's other domestic pricing, by Wilmington, Mass.-based medical device manufacturer Acellent, which brought a $315 million issue of 10% senior subordinated notes due 2017 to market fairly early in the day at par.

Even when asked about the new bonds nobody seemed to have it on their radar screens.

One trader suggested that, in light of the generally firm tone seen with most recent new issues, the bonds might be trading at "a slight premium" to their issue price - but he could not say for sure.

"Normally, we're asked a thousand times on this [new-deal] stuff - but nobody checked" on that issue, he said.

"I haven't seen anything," said a second trader, leafing back though all of his messages for the day, "zero - and I see a lot of stuff. I see a lot of flippers and a lot of new issues and whatnot - but I haven't seen a thing on this, unless it was just put away."

He added "I have no idea - and I see a lot of stuff, Street runs, I see other major runs" - but he saw no trace of any activity in Accellent.

New Host finally posts

Among Tuesday's deals, Host Hotels & Resorts, LP's $500 million of new 6% notes due 2020 were seen having begun to trade around - the Bethesda, Md.-based lodging real estate REIT's new deal arrived too late in the day Tuesday for aftermarket action .

But when they moved into secondary, the new bonds got pushed lower, with one trader seeing them at 99 5/8 bid, par offered.

The Host bonds, a second trader said "were up, then they were down, then they were up, and down" before finally finishing around 99¾ bid, 99 7/8 offered.

Yet another trader pegged them at 99 7/8 bid, par offered, exclaiming "a 6% coupon - who cares? No wonder" the bonds were struggling.

MarkWest, Abengoa hold gains

However, Tuesday's other two deals, which moved up after coming to market, were seen having held onto their gains.

MarkWest Energy's new 6¾% notes due 2020 were seen on Wednesday by two traders at 101¾ bid, 102 offered, actually up by ¼ point from their late-Tuesday levels.

The Denver-based natural gas company's $500 million deal had priced on Tuesday at par.

Meanwhile, its outstanding 8½% notes due 2016, which had eased about ¾ point on Tuesday, got back about ½ point on that on Wednesday to close at 107 bid.

And Spanish energy and transportation conglomerate Abengoa's $650 million offering of 8 7/8% notes due 2017, were seen on Wednesday at 99 bid, 99¼ offered around the level where the bonds had traded on Tuesday. That deal - upsized from $600 million originally - priced on Tuesday at 98.095 to yield 9¼%.

Monday deals steady

The deals which priced on Monday were meantime also seen around the same levels at which they had gone home on Tuesday

Univsion Communications, Inc.'s 7 7/8% senior secured notes due 2020 were quoted by a trader Wednesday at 102 bid, 102¾ offered.

The Los Angeles-based Spanish-language broadcaster's $750 million deal had priced at par as a drive-by issue on Monday, but had jumped to around the 102 area when they began trading Tuesday.

However, Monday's other notable quick-to-market offering, Calpine Corp.'s $2 billion 7½% first-lien senior secured notes due 2021, were seen Wednesday trading around par bid, 100½ offered.

The San Jose, Calif.-based independent power producer had priced its deal at par on Monday, after first upsizing it from $1.5 billion, and it had actually traded below issue in its initial foray into the aftermarket before steadying around par.

"It sold off," a trader said, explaining that "the thing is, they upsized the deal, so everyone was getting their allocations," removing a key potential driver for any upside aftermarket movement.

"Some of the new deals just can't seem to get out of their own way," another trader opined.

Trader: United Rentals should hop...

A trader said that he heard that "a lot of people" are interested in the upcoming United Rentals deal.

"A lot of accounts are going in for it," he continued. "It should do well, even though it's a rental company, despite the economic downturn and everything going on."

He added that "with a selection of a very few amount of names, everything is either hovering around their issue price, or up 1/4, down 1/4, or everything else has been trading up 2 or 3 points.

"A lot of people definitely are playing, because there's so much cash."

United Rentals "should be a popular name [Thursday]."

...but BWAY may drop

On the other hand, he said that he "hadn't heard much chatter" from the accounts about BWAY's offering of five-year PIK toggle notes.

"Nobody is really interested," in such a smaller ($125 million) deal, he said.

Add to size the fact that it's a PIK notes deal with proceeds used for a distribution to equity holders, and "everybody [who he talked to] said they weren't intrigued by the deal," the trader said.

"With so many deals coming," he said further, "people are starting to nitpick again," whereas before, it seemed for a while that almost everything getting priced played to strong demand and would move up smartly.

"We're not quite there yet," though, he added, "we're just on the cusp" of a more discriminating, wary market, "because there's so much cash out there."

Market indicators seen mixed

Away from the new-deal world, a trader saw the CDX North American Series 15 HY index up ½ point Wednesday to 99 3/8 bid,99 5/8 offered, after having been down ½ point on Tuesday.

The KDP High Yield Daily index meantime gained 3 basis points Wednesday to end at 74.11, after it had eased by 6 bps on Tuesday. Its yield narrowed by 3 bps to 7.30%, after having been unchanged on Tuesday.

However, the Merrill Lynch High Yield Master II index fell by 0.028% on Wednesday, after having lost 0.017% on Tuesday. Its year-to-date return eased to 13.552% from Tuesday's 13.584% and from its 2010 peak cumulative return of 13.604%, recorded on Monday.

Advancing issues moved back ahead of decliners on Wednesday, continuing the see-saw pattern seen over the last several sessions. As had been the case on Tuesday, when decliners narrowly led, the margin of difference was not great - just a couple dozen issues out of the over 1,500 tracked.

Overall activity, represented by dollar-volume levels, fell by 25% on Wednesday, after having jumped by 53% on Tuesday versus the previous session.

A trader, in commenting on the fall-off of activity from Tuesday's busy pace, noted that "a lot of people had invitations to go to the Yankee game. A lot of people seemed to have left around 3 o'clock and are now [as of about 4:30 p.m.] in The Bronx."

He said that "it was a busy morning," with about $1.5 billion of volume, before things fell off later in the day

A second trader, noting the power of the televised playoff game as a lure to get people to do nothing, agreed that "everyone was watching the Yankees," who kept their hopes of a repeat championship alive, however tenuously, with a 7-2 victory.

TXU PIKs trade up

Among specific non-new-deal issues, Energy Future Holdings Corp.'s 1¼% PIK notes due 2017 were "busy" during the midweek trading session, a trader said.

He called the bonds up a smidge at 591/2.

At another shop, a trader said about $25 million to $30 million of the bonds turned over, hitting a high around 601/2. But the notes "came off a little by the end of the day," closing at 591/2.

There was no fresh news out on the Dallas-based power producer.

-Stephanie N. Rotondo contributed to this report

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