ACCO leads $1.51 billion primary to cap mostly quiet week; Chesapeake still active

By Paul Deckelman and Paul A. Harris

New York, April 20 - The high-yield primary market put on a burst of late-session activity Friday, to close out what was only a moderately busy week on the new-deal front.

The biggest deal of the day appeared near the end of the session, as ACCO Brands Corp. came to market with a $500 million offering of eight-year notes. There was little aftermarket trading seen in the issue.

After that, Carmike Cinemas, Inc. raised the curtain on a $210 million issue of seven-year senior secured paper. That deal came too late for any dealings, traders said.

Earlier, Nationstar Mortgage LLC priced $275 million of seven-year paper, which was heard by traders to have firmed solidly when it hit the aftermarket.

Milacron LLC also came to market with a $275 million seven-year deal, although that upsized offering was senior secured. It gained more than a point when freed for the secondary.

Resolute Energy Corp. priced $250 million of eight-year bonds, which also gained about a point.

The $1.51 billion of new paper, priced in five tranches, brought the week's issuance total up to $3.285 billion in 11 tranches, which still lagged last week's $5.525 billion in eight tranches.

In the secondary market away from the new deals, traders saw yet a third consecutive day of heavy trading in Chesapeake Energy Corp.

Statistical measures of market performance were firmer on the day and improved from the end of last week as well.

ACCO at the tight end

A busy Friday session in the primary market saw five issuers, each bringing a single tranche of notes, to raise a combined total of $1.51 billion.

ACCO Brands priced a $500 million issue of eight-year senior notes (B1/B+/BB) at par to yield 6¾%.

The yield printed at the tight end of the 6¾% to 7% yield talk.

The Lincolnshire, Ill.-based office supplies manufacturer moved up timing on the deal. When the offering was announced, the roadshow schedule carried into the week ahead with stops on the West Coast of the United States. The company will continue to visit accounts during the April 23 week as planned in the original roadshow, according to the syndicate source.

Barclays was the left lead bookrunner. Bank of America Merrill Lynch, BMO and SunTrust were the joint bookrunners.

ACCO Brands plans to use the proceeds to fund a special distribution in connection with the separation of the Mead consumer and office products business and to purchase or redeem up to all of the company's senior subordinated notes.

Milacron comes through talk

Milacron priced an upsized $275 million issue of seven-year senior secured notes (B1/B+) at par to yield 8 3/8%.

The yield printed 12.5 basis points below yield talk, which was set in the 8 5/8% area.

Bank of America Merrill Lynch, RBC and Barclays were the joint bookrunners for the acquisition deal, which was upsized from $265 million.

Nationstar prints at 9 5/8%

Nationstar Mortgage and Nationstar Capital priced a $275 million issue of seven-year senior notes (B2/B) at par to yield 9 5/8%, in the middle of the 9½% to 9 ¾% price talk.

Credit Suisse, Bank of America Merrill Lynch, Barclays, Citigroup, RBS and Wells Fargo were the joint bookrunners.

The Lewisville, Texas-based mortgage services provider plans to use the proceeds for general corporate purposes, which may include future acquisitions and transfers of servicing portfolios and/or related businesses from third parties.

Resolute Energy at tight end

Resolute Energy priced a $250 million issue of eight-year senior notes (B3/B-) at par to yield 8½%, at the tight end of the 8½% to 8¾% yield talk.

Citigroup and BMO were the joint physical bookrunners. Wells Fargo also was a joint bookrunner.

The Denver-based independent oil and gas company plans to use the proceeds to repay debt and for general corporate purposes, including capital expenditures.

Carmike prices secured deal

Carmike Cinemas priced a $210 million issue of seven-year senior secured notes (B2/B) at par to yield 7 3/8%, in the middle of the 7¼% to 7½% yield talk.

Macquarie was the sole bookrunner.

The Columbus, Ga.-based cinema operator plans to use the proceeds to retire Carmike's existing term loan, with any remaining proceeds to be used for working capital and other general corporate purposes.

Agrokor prices euro tranche

In Europe, Croatia's Agrokor DD priced a €300 million issue of seven-year senior notes (B2/B) at par to yield 9 7/8%, at the tight end of price talk that was set in the 10% area.

A proposed dollar-denominated tranche was withdrawn from the market.

BNP Paribas, UniCredit and J.P. Morgan were the joint bookrunners for the debt-refinancing deal.

Ineos brings $2.2 billion

Looking to the week ahead, the active forward calendar ballooned to $3.5 billion on Friday as England's Ineos Finance plc announced plans to start a roadshow Monday for its about $2.2 billion equivalent offering of eight-year senior secured notes.

The deal is coming in both dollar- and euro-denominated tranches.

Joint bookrunner J.P. Morgan will bill and deliver for the debt-refinancing deal. Barclays also is a joint bookrunner. Goldman Sachs and UBS also are underwriters.

Another European name on the calendar is Germany's SAF Holland, which whispered its €150 million offering of five-year notes with a yield in the 7% area.

The debt-refinancing deal is expected to price Monday via joint bookrunners UniCredit and Commerzbank.

New issues on the rise

In the secondary market, it was a busy new-issue day, a trader said. "And all of it was doing well," he said.

That was especially true of the first issue that priced during the session - Nationstar Mortgage.

"They were really popping," a trader said, quoting the seven-year note issue firming smartly to around 102¼ bid, 102¾ offered.

A second trader put the bonds at 102 bid, 102½ offered, well up from their par issue price.

One of the traders saw Cincinnati-based industrial machinery manufacturer Milacron's upsized senior secured notes due 2019 trading at a wide 101- to 102-context in the brokers' market, which he estimated would be a little tighter in the regular market, at about 101¼ bid, 101¾ offered.

Those bonds also priced at par, after upsizing from $265 million.

Resolute Energy's $250 million of eight-year notes moved up by more than a point, to 101¼ bid, 101½ offered.

The deal priced at par.

ACCO Brands' $500 million of eight-year notes priced fairly late in the session and not much of an aftermarket was seen.

A trader pegged the company's bonds at 100¼ bid, shortly after their pricing, adding that they will likely rise from there because "everything is firming."

A trader saw the day's last deal from Carmike Cinemas at par bid, 100½ offered.

The company priced its $210 million tranche of seven-year secured paper at par.

Thursday deals hold levels

A trader said the new deals that came to market during Thursday's session were pretty much holding around those levels Friday.

He said Houston-based restaurant and gaming operator Landry's, Inc.'s 9 3/8% notes due 2020 settled in around 101 3/8 bid, 101 5/8 offered.

On Thursday, that $425 million deal priced at par after upsizing from an original $400 million.

When they hit the aftermarket Thursday, traders initially saw the new bonds quoted as high as 102 bid, although they later settled in around a 101 3/8- to 101 5/8-context.

A trader said Las Vegas-based gaming operator Ameristar Casinos Inc.'s 7½% notes due 2021 were last seen Friday at 104½ bid, 104½ offered.

That $240 million quick-to-market transaction - structured as an add-on tranche to its $800 million of notes that were sold last year, priced at 103 to yield 6.879%, versus the 7 5/8% yield at which the original bonds priced.

In Thursday's aftermarket, they moved up from their issue level to 104¼ bid, 104½ offered and remained above 104 Friday.

Traders said they did not see any indications of activity among the relatively older bonds that priced earlier in the week.

These included French electrical products maker Rexel SA's 6 1/8% $100 million of add-on notes due 2019, which priced at 100.75 on Monday to yield 5.96%; Oklahoma City-based oil and gas exploration and production company Chaparral Energy Inc.'s upsized $400 million of 7 5/8% notes due 2022, which priced at par Wednesday, along with two other Wednesday deals.

There were Centennial, Colo.-based in-theater advertising and live-event company National CineMedia, LLC's 6% senior secured notes due 2022, which priced at par; and a $210 million tranche of 11 7/8% notes due 2019 from Phyisotherapy Associates, an Exton, Pa.-based provider of outpatient services, which priced at 98.841 to yield 12 1/8%.

The older stuff, one of traders said "was almost out of sight, out of mind."

Chesapeake again in spotlight

Away from the new-deal names, traders said the various bonds of Oklahoma City-based Chesapeake Energy continued to trade actively Friday at the mostly lower levels they have occupied since falling precipitously Wednesday after revelations about the company's chief executive officer's personal finances.

"The rest of the market [other than the new-deal names] was nervous again about Chesapeake," one trader said.

He said the bonds "weren't getting rocked," but were unchanged to down a little - maybe about a quarter-point.

He saw about $40 million of the company's 6.775% notes due 2019 trading around the 98 level, which he called up from where they were on Thursday when more than $75 million of those bonds changed hands, or from Wednesday when turnover topped $100 million.

Those bonds were trading around 99 bid before a Reuters "special report" news story said that chief executive officer Aubrey McClendon, whose compensation includes the right to buy as much as a 2.5% stake in all of the company's wells, took out more than $1 billion in personal loans over the past few years, secured by that stake.

Chesapeake issued a statement Wednesday insisting that there is nothing improper about the loans, saying that they are McClendon's own personal business and do not impact the company.

However, critics suggest they indicate questionable business judgment on McClendon's part and could lead to a possible conflict of interest.

The trader said that "it's a shame" the bonds were getting battered around, noting that Chesapeake - the second-biggest U.S. natural gas operator behind ExxonMobile - is a core energy holding in many junk-bond portfolios.

The 6.775% notes - $1.3 billion of which were issued in February - have become a bellwether credit, he said.

A second trader said a variety of factors were behind the Chesapeake carnage.

He said the 2019 deal's large size made it "a trading vehicle."

"It's big and liquid," he said, and people were getting into it or out of it to either park cash or to raise cash for other purposes.

He added, "A lot of crossover guys bought it, thinking Chesapeake was going to get upgraded. But with natural gas prices now below $2, I don't think that upgrade is going to happen anytime soon."

On top of that, of course, there was what he waggishly described as the company's "stupid CEO tricks."

At another desk, a trader quoted those bonds going home at 96½ bid, 97¼ offered, on volume of $45 million.

He saw the 6 5/8% notes due 2020 at 96½ bid, 97¼ offered, with $22 million traded. And he saw $14 million of Chesapeake's 9½% notes due 2015 finish at 109¼ bid, 110 offered.

Market better on day, week

Statistical measures of junk-market performance rose Friday after mix results for a second straight session Thursday, and they also were improved from last week's levels.

A trader saw the Markit Group CDX North American Series 18 High Yield Index up 3/16 point on Friday to end at 94 13/16 bid, 94 15/16 offered. It was down by 3/16 point Thursday.

The index also was up marginally from its level of 94 11/16 bid, 94 7/8 offered at the close of trading last Friday, April 13.

The KDP High Yield Daily Index gained 2 basis points on Friday to close at 73.61, after rising by 6 bps on Thursday. Its yield was unchanged Friday at 6.69%, after coming in by 2 bps Thursday.

Those levels compared with a reading of 73.45 and a yield level of 6.76% a week earlier.

And it was a lucky seventh straight gain Friday for the widely followed Merrill Lynch High Yield Master II Index, which rose by 0.053%. On Thursday, it gained 0.049%.

That lifted the index's year-to-date return to 5.337% on Friday, versus Thursday's 5.281%, although the cumulative return remains below its peak 2012 level of 5.361% recorded March 2.

On the week, the index gained 0.376%, bouncing back from the 0.174% weekly loss posted the previous Friday, when the year-to-date return was 4.942%.

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