Giant-sized Intelsat unit drive-by leads $4.8 billion session; Monday deals busily traded

By Paul Deckelman and Paul A. Harris

New York, May 21 - The high-yield market's pre-Memorial Day pricing frenzy continued on Tuesday, as nearly $4.8 billion of new dollar-denominated, junk-rated paper from domestic or industrialized-country borrowers priced in seven tranches, according to syndicate sources. This was on top of the nearly $30 billion done over the past two weeks.

The day's biggest deal was a $2.635 billion two-part transaction from communications satellite operator Intelsat Jackson Holdings SA, which priced $2 billion of new 10-year notes and a $635 million add-on to its existing 2022 notes via a subsidiary.

Other companies also doing quickly shopped offerings included airline operator US Airways Group Inc. with $500 million of five year notes, movie theater company Cinemark USA, Inc. with $530 million of 10-years, and consumer lender Springleaf Finance Corp.'s $300 million of seven-year notes, with the latter deal having first surfaced during Monday's session.

And there were scheduled forward-calendar deals from another financial firm, Getco Financing Escrow LLC, with $305 million of secured five-year notes, and from blind and shade manufacturer Springs Window Fashions, which did $470 million of eight-year notes.

The Springs Window deal was quoted as firming solidly when it reached the aftermarket, although traders said the day's other deals stayed close to their respective issue prices.

The traders saw very active second-day trading at firmer levels in several of Monday's pricings, including energy operator Concho Resources, Inc., packaged foods producer B&G Foods, Inc., and health care-oriented real estate investment trust Sabra Health Care Limited Partnership.

They said there was little really going on in the non-new-deal secondary market in terms of activity in Monday's deals. Tuesday's were pretty much dominating things, traders noted.

Clear Channel Communications Inc.'s bonds moved up on the news that the media company had begun a debt-for-debt exchange offer for some of its existing bonds.

Statistical measures of market performance turned mostly higher on the day, after having been mixed the two previous sessions.

Intelsat $2.64 billion drive-by

News volume in the primary market remained heavy on Tuesday, with six issuers raising a total of $4.8 billion in a combined seven tranches.

Intelsat Jackson Holdings priced $2.635 billion of senior notes in two tranches in a quick-to-market Tuesday transaction.

The deal included a $2 billion issue of 10-year notes (B3/B), which priced at par to yield 5½%. The yield printed at the wide end of the 5¼% to 5½% yield talk.

In addition, the fixed satellite services provider priced a $635 million tack-on to its 6 5/8% senior notes due Dec. 15, 2022 (Caa1/CCC+) at 106.25 to yield 5.596%. The reoffer price came in the middle of the 106 to 106.5 price talk.

Credit Suisse Securities (USA) LLC, Barclays, BofA Merrill Lynch, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Goldman Sachs & Co. and Deutsche Bank Securities Inc. were the joint bookrunners.

Proceeds will be used to refinance the Intelsat 11¼% Luxembourg notes due 2017 and the Intelsat Jackson unsecured term loans due 2014.

Cinemark prints at 4 7/8%

Elsewhere in drive-by action, Cinemark USA priced a $530 million issue of 10-year senior notes (B2/BB-) at par to yield 4 7/8%.

The yield printed in the middle of the 4¾% to 5% yield talk.

Barclays, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners.

The Plano, Texas-based movie chain operator plans to use the proceeds to refinance its 8 5/8% senior notes due 2019.

US Airways upsizes

US Airways priced an upsized $500 million issue of non-callable five-year senior notes (Caa2/CCC+/B-) at par to yield 6 1/8%.

The deal, which was run on the investment-grade desk, had been talked to yield in the low-to-mid 6% range. It was upsized from $400 million.

Citigroup Global Markets was the left bookrunner.

Barclays, Goldman Sachs & Co., Morgan Stanley & Co. and Credit Suisse Securities (USA) LLC were the joint bookrunners.

The Tempe, Ariz.-based airline plans to use the proceeds for general corporate purposes.

Springs Window on talk

In a deal that ran an investor roadshow, SIWF Merger Sub, Inc. and Springs Industries, Inc. priced a $470 million issue of eight-year senior secured notes (B2/B) at par to yield 6¼%.

The yield printed on top of yield talk that had been revised from earlier talk in the 6½% area.

J.P. Morgan Securities LLC and BofA Merrill Lynch were the joint bookrunners.

Proceeds will be used to fund the acquisition of Springs Industries by Golden Gate Capital.

Getco five-year secured deal

Getco Financing priced a $305 million issue of five-year senior secured notes (B2/B) at par to yield 8¼%, on top of yield talk.

Jefferies LLC and Goldman Sachs & Co. were the joint bookrunners.

Proceeds, together with a new credit facility, will be used to refinance debt and finance the merger between Knight Capital Group Inc. and Getco.

Springleaf upsizes

Springleaf Finance priced an upsized $300 million issue of seven-year senior notes (Caa1/CCC+) at par to yield 6%.

The deal was upsized from $250 million.

The yield printed at the tight end of the 6% to 6¼% yield talk.

BofA Merrill Lynch, Citigroup Global Markets Inc. and Credit Suisse Securities (USA) LLC were the joint bookrunners.

Proceeds will be used for general corporate purposes.

The issuer is an Evansville, Ind.-based consumer finance company, formerly known as American General Finance Inc.

ILFC split-rated floaters

International Lease Finance Corp. priced $550 million offer of split-rated three-year floating-rate notes (Ba3/BBB-/BB) in at par to yield Libor plus 195 basis points.

Price guidance was in the Libor plus 200 bps area.

Active bookrunners were Goldman Sachs & Co., Deutsche Bank Securities Inc. and UBS Securities LLC.

CommScope PIK toggle deal

CommScope Holding Co., Inc. plans to price a $550 million offering of seven-year senior PIK toggle notes (expected ratings Caa1/B-) on Wednesday or Thursday.

J.P. Morgan Securities LLC, BofA Merrill Lynch, Deutsche Bank Securities Inc. and Goldman Sachs & Co. are the joint bookrunners.

Proceeds will be used to fund a shareholder dividend and for general corporate purposes, including potential acquisitions.

Day's deals modestly higher

In the secondary market, traders saw the day's new deals trading at generally higher levels, although only Springs Window Fashions' 6¼% senior secured notes due 2021 really had sizable gains.

One trader saw the bonds get as good as 102 3/8 bid, 102 5/8 offered.

That was well up from the par level at which the Middleton, Wis.-based manufacturer of blinds, shades and other window coverings had priced its deal earlier in the day.

Other deals stuck more closely to their respective issue prices.

A trader said that Cinemark's 4 7/8% notes due 2023 were trading between 100 5/8 and 1003/4, while several others also pegged the deal in that same region, up from the notes' par issue price.

Getco Financing Escrow's 8¼% senior secured notes due 2018 were seen by a trader in a bid range between par and 101, not far from the par level at which the Chicago-based securities company had priced its new deal.

Another trader quoted the bonds offered at 101, "but I didn't see anything else."

That trader was generally not very impressed with the day's new issues.

Apart from the Springs Window issue, which priced fairly early in the session and had time to find its legs, "the ones that opened this afternoon," he opined, "were like dog deals. All of them were offered below 101."

For instance, he said that at some point, the Cinemark deal was offered around 1001/2.

He also saw US Airways 6 1/8% notes due 2018 not being able to gain much altitude after pricing at par, moving up to just 100¼ bid, 100¾ offered.

"The bonds haven't gone too well in the afternoon," he declared.

A second trader also saw the US Air paper in a 100¼ to 100½ context.

Springleaf Finance's 6% notes due 2020 were seen by a trader at par bid, 100¾ offered.

And a trader saw Intelsat's bonds up slightly late in the day. He located its 5½% guaranteed senior notes due 2023 at 100¼ bid, 100¾ offered, after they had priced at par.

And its 6 5/8% non-guaranteed senior notes due 2022 had drifted up to 106 3/8 bid, 106 7/8 offered, after that tranche had priced at 106.25.

Monday deals trade strongly

On the other hand, one of the traders said that he had heard that the new deals, which had come to market during Monday's session, "were doing pretty well."

For instance, he said that B& G Foods' 4 5/8% notes due 2021 were trading at 101 3/8 bid, 101 7/8 bid.

The Parsippany, N.J.-based maker of brand-name packaged food items, like Cream of Wheat cereal, Polaner jams and jellies, Ortega Spanish foods and Accent seasonings, had priced its $700 million drive-by offering at par on Monday, with the bonds rising to levels well above 101 bid in initial aftermarket dealings.

He said that this was all the more notable when you consider the relatively sparse coupon and low debt ratings.

He noted, with a laugh, that the new issue "is B1/B+, and they're pricing it like a BB."

Another trader saw the bonds get as good as 101¾ bid, 102 offered. He said that a check of the Trace system showed that some $44 million of the B&G bonds had traded, making it one of the busiest Junkbondland issues of the day.

Concho Resources' 5½% notes due 2023 were even busier, with a trader estimating that at least $48 million of the Midland, Texas-based energy company's issue had changed hands during the day.

Concho had priced $850 million of those notes on Monday as an add-on to the original $700 million that were sold last summer. The bonds priced at 103.75 to yield 4.884%, after having been upsized from an originally announced $500 million.

That quick-to-market deal came too late in Monday's session for any kind of an aftermarket at that time - but got as good as 104¾ bid, 105½ offered, the trader said.

He also said that Sabra Health Care's 5 3/8% notes due 2023 were trading at 101¾ bid, 102 offered on Tuesday, versus their par issue price on Monday. The Irvine, Calif.-based healthcare REIT's credit, too, had been priced at par too late in Monday's session for any kind of dealings at that time, instead starting to trade on Tuesday.

A market source at another desk said that over $21 million of the new Sabra bonds had traded by mid-afternoon.

Clear Channel climbs

Traders did not see much going on away from the new deals, with one of them claiming "not much overall activity at all, since the focus was on these new issues [from Tuesday] and on [Monday's] as well."

Everybody has just been focused on the new deals," another trader agreed.

But one non-new-deal name that did attract some attention was Clear Channel Communications, after the San Antonio, Texas-based radio and outdoor advertising powerhouse announced a tender offer for some of its bonds. That debt rose by several points on the news, moving north of par.

The company said that it was tendering for its 10¾% senior cash pay and 11%/11¾% senior toggle notes due 2016, which gave the bonds as much as a 4-point boost. The debt had been climbing up recently, on chatter that there was some sort of deal in the works for that paper.

One trader called the 10¾% notes unchanged at 1011/4, while the 11% notes gained over 3½ points to end at 101.

The trader also saw the 9% notes due 2021, which are not a part of the exchange offer, at 1033/4, up 1¾ points.

At another desk, a trader deemed the issues up 4 points, with both the 10¾% and 11% notes trading around 101.

Clear Channel said that holders of at least $500 million of the notes have already agreed to participate in the tender. Participants will receive new 14% senior notes due 2021 in exchange for their holdings.

The tender deadline is 11:59 p.m. ET on June 18.

Market indicators better

Overall, statistical junk performance indicators mostly better on Tuesday after two consecutive sessions of having been mixed.

The Markit Series 20 CDX North American High Yield index continued its recent pattern of choppy day-to-day activity, posting a gain of 1/8 of a point to end at 107 bid, 107¼ offered. On Monday, it had fallen by 5/32 of a point.

The KDP High Yield Daily index saw its third consecutive gain of 1 basis point on Tuesday, finishing at 76.46. Its yield was unchanged for a second straight session, stuck at 5.03%.

The widely followed Merrill Lynch High Yield Master II index gained 0.027% on Tuesday, its second consecutive advance. On Monday, it had risen by 0.106%.

The latest gain raised its year-to-date return to 5.48% from Monday's 5.452%. However, it remained below its peak level for the year of 5.835%, set on May 9.

Stephanie N. Rotondo contributed to this review

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