CF, Limited, International Wire, NewWorld price, CF jumps; existing Limiteds gain on tender

By Paul Deckelman and Paul A. Harris

New York, April 20 - CF Industries, Inc. priced a $1.6 billion two-part offering of senior notes on Tuesday, with each tranche pricing at par. When the Deerfield, Ill.-based nitrogen fertilizer producer's new bonds were freed for secondary dealings, they were heard by traders to have firmed smartly.

Also pricing were an upsized drive-by offering of 10-year bonds from Columbus, Ohio-based specialty retailer Limited Brands Inc. and a five-year secured notes deal from International Wire Group Inc., a maker of electrical wire and cable based in Camden, N.Y. Both issues of new bonds were quoted higher in the aftermarket.

Two series of Limited's existing bonds - maturing in 2012 and 2014 - moved up by between 2 and 3 points, given a boost on the news that Limited is tendering for all of the first issue and a portion of the second.

Back in the primary market, there was also a pricing at par of European coal operator New World Resources Corp.'s euro-denominated eight-year secured notes.

Prospective new deals emerged from more than a half-dozen prospective issuers, including such names as homebuilder Standard Pacific Corp., apparel maker Phillips-Van Heusen Corp., broadcaster Gray Television, Inc. and concert promoter and ticket seller Live Nation Entertainment, Inc., among others. Market participants awaited expected Wednesday pricings for Global Geophysical Services, Inc.. Gray Television, Standard Pacific and Chinese real estate operator Agile Property Holdings, Ltd.

Away from the new-deal arena, Junkbondland investors continued to see considerable activity in Teck Resources Inc.'s bonds, following last week's Standard & Poor's upgrade to investment grade status from high yield previously.

CF Industries prices $1.6 billion

A trio of issuers prices a combined $2.14 billion face amount of notes in four dollar-denominated tranches during Tuesday's frenetic primary market session.

CF Industries priced $1.6 billion of senior unsecured notes (B1/BB+) in two equal-sized par-pricing tranches.

The deal included $800 million of 6 7/8% eight-year notes and $800 million of 7 1/8% 10-year notes.

Both tranches priced at the tight end of price talk: The eight-year notes had been talked at the 7% area, while the 10-year notes were talked at the 7¼% area.

Morgan Stanley & Co. Inc. ran the books.

Proceeds will be used to repay the company's bridge facility related to its acquisition of Terra Industries Inc., with any excess proceeds going to repay bank debt.

Limited Brands at tight end

Limited Brands priced an upsized $400 million issue of 10-year senior notes (Ba1/BB) at par to yield 7%.

The yield printed at the tight end of the 7% to 7¼% price talk. The amount was increased from $300 million.

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

Proceeds will be used to fund tenders for the company's existing senior notes due 2012 and 2014.

International Wire prices five-year deal

Meanwhile, International Wire Group priced a $140 million issue of 9¾% five-year senior secured notes (B3/B) at 99.038 to yield 10%.

The yield printed on top of yield talk. The reoffer price came toward the rich end of the 1 to 2 points of discount talk.

Wells Fargo Securities ran the books.

Proceeds will be used to redeem the company's existing 2011 notes and to pay a distribution to shareholders and option holders.

New World Resources sells €475 million

In the European market, New World Resources Corp. priced a €475 million issue of eight-year senior secured notes (Ba3/BB-) at par to yield 7 7/8%, on Tuesday.

The yield printed at the tight end of the 8% area price talk.

Goldman Sachs & Co. was the left bookrunner. JPMorgan and Morgan Stanley were the joint bookrunners.

Proceeds will be used to refinance bank debt.

The company is an Amsterdam-based central European coal producer with operations in the Czech Republic.

The par-pricing New World Resources 7 7/8% notes due 2018 were seen in the aftermarket at 102 bid, 103 offered, a market source said.

TVN prices add-on

Also in the euro market, Poland-based cable TV operator TVN Finance Corp. II AB priced a €100 million add-on to its 10¾% senior unsecured notes due Nov. 15, 2017 (B1//) at 110.50 to yield 8.349%.

JP Morgan and Nomura Securities led the deal.

The original €405 million issue priced at 98.696 to yield 11% in November 2009.

Global Geophysical sets talk

Meanwhile, the dealers busied themselves setting the stage for the week's remaining three sessions.

Global Geophysical Services talked its $200 million offering of seven-year senior notes (B3/B/) to yield 11% to 11¼%.

The order books close at 2 p.m. ET on Wednesday, and the deal is set to price after that.

Barclays Capital Inc., Bank of America Merrill Lynch and Credit Suisse are joint bookrunners for the debt refinancing and general corporate purposes deal.

Agile Property plans $500 million

China's Agile Property Holdings expects to price a $500 million offering of seven-year guaranteed senior fixed-rate notes (Ba3/BB) on Wednesday.

Bank of America Merrill Lynch and Morgan Stanley are joint bookrunners for the notes, which are offered via Rule 144A and Regulation S.

Proceeds will be used to exercise a make-whole call for the Hong Kong-based land development company's outstanding 9% notes due 2013, and for general corporate purposes.

The deal was going well, according to a syndicate banker in New York, who added that previous to the U.S. Tuesday session the deal saw strong demand in Asia.

Phillips-Van Heusen to start roadshow

There were also potential issuers announcing brief investor roadshows, on Tuesday.

Phillips-Van Heusen Corp. will begin a brief roadshow on Wednesday for its $525 million offering of 10-year senior notes (B2/BB).

The roadshow wraps up on Thursday.

Barclays Capital, Deutsche Bank Securities, Bank of America Merrill Lynch, Credit Suisse and RBC Capital Markets are joint bookrunners for the public deal.

Proceeds will be used to partially fund the acquisition of Tommy Hilfiger, and to repurchase the company's 7¼% notes due 2011 and 8 1/8% senior notes due 2013.

Gray starts marketing $365 million

Gray Television, Inc. began a brief roadshow on Tuesday for a $365 million offering of senior secured second-lien notes due June 29, 2015.

Marketing of the deal wraps up on Wednesday, and the notes are expected to price thereafter.

Bank of America Merrill Lynch, Wells Fargo Securities and Citadel Capital are joint bookrunners.

The Atlanta-based television broadcast company will use the proceeds to repay a portion of its term loans and repurchase a portion of the outstanding shares of its series D perpetual preferred stock.

Live Nation starts roadshow

Live Nation Entertainment, Inc. began a brief roadshow on Tuesday for its $250 million offering of eight-year senior unsecured notes.

The roadshow wraps up on Wednesday, and the Rule 144A and Regulation S for life deal is expected to price on the same day.

JP Morgan, Goldman Sachs & Co. and Deutsche Bank Securities are joint bookrunners.

Proceeds will be used to repay bank debt and to take out preferred stock.

Kemet returns

Kemet Corp. will return to the new issue market with a $225 million offering of eight-year senior notes (expected ratings B2/B) that is expected to price on Wednesday or Thursday.

Bank of America Merrill Lynch will run the books.

Proceeds will be used to repay substantially all outstanding debt under the company's existing credit facilities and to fund a tender for a portion of its 2¼% convertibles due 2026.

The Greenville, S.C.-based manufacturer of capacitors postponed a $275 million offering of eight-year senior notes on Feb. 11, 2010, due to unfavorable market conditions.

Penson starts roadshow Wednesday

Penson Worldwide, Inc. will begin a roadshow on Wednesday for its $200 million offering of seven-year senior secured second-lien notes (B1/BB-).

JP Morgan and UBS Investment Bank are joint bookrunners.

Proceeds will be used to repay the company's credit facility and to make a capital contribution to regulated subsidiaries.

The roadshow wraps up on April 27, and the deal is set to price on April 28.

Standard Pacific for Wednesday

Standard Pacific Corp. will host an investment call at 11 a.m. ET on Wednesday for its $200 million offering of eight-year senior unsecured bullet notes (existing ratings Caa1/B-).

The deal is set to price on Wednesday afternoon.

JP Morgan has the books.

The Irvine, Calif.-based homebuilder will use the proceeds for general corporate purposes, including the repayment of its 7¾% notes due 2013 via a tender offer.

New CF Industries improves

When the new CF Industries deal was freed for secondary dealings, traders quoted both tranches of the freshly minted bonds trade solidly higher.

A trader quoted the 7 1/8% notes due 2020 as going out at 102 5/8 bid, 103 offered, while the 6 7/8% notes due 2018 were finishing the day at 102¼ bid, 102 5/8 offered, "so yeah, they traded right up."

He added that "the credit looked pretty damn good - this looked like pretty much a no-brainer."

Another trader had the eight-year bonds at 102 bid, 102½ offered, while the 10-years moved up to 102½ bid, 103 offered.

"It was an impressive move for a 6 7/8% coupon," yet another trader said about the eight-year piece. "The bond did very, very well. It was big deal [each tranche $800 million], with a lower coupon, and still there was a lot of demand in the secondary market."

He also saw the 10-years push up to 103. "There was a lot in the secondary, even after pricing."

Still another trader saw the new CF 10-years finishing at 102¾ bid, 103 offered, with the eight-year piece as high as 102 5/8 bid, 102¾ offered, before settling in at 102 3/8 bid, 102½ offered.

Limited well-liked

A trader saw Limited Brands' new 7% notes due 2020 trading up on the break very late in the day at 1011/2, leaving the bonds at 1011/2-102.

The retailer's existing bonds which are to be taken out with the proceeds of the upsized $400 million new deal - its $191.5 million of 6 1/8% notes due 2012 and its $500 million of 5¼% notes due 2014 - were also seen well up from prior levels on news of the company's tender offer and the bond deal that will fund it.

A trader said that the 12s had been trading around 105 previously, but had now moved up a good 2 to 3 points from there to near the 108 takeout price, while the 14s had also moved up by a similar amount from their previous par level, approaching that bond's tender offer consideration at 104.

He theorized that about 80% of the 2012 notes, or around $153 million, would likely be taken out via the tender, and projected that the company will likely accept between 20% and 30% of the 2014s on a pro-rata basis to fill out its tender offer, although many more of those notes will likely be tendered by their holders.

A market source quoted the 2012s as having gotten as good as 107 7/8, calling that a gain of more than 2 points on the day.

"Even the shorter ones, which were tight to begin with," moved up to around a 107-108 context, another trader said, with the 14s rising to near the 104 level.

"I don't think there's much value left in them, personally," he said of the two bond issues, "so most people are going to want to tender."

International wire offered higher

A trader said that he had seen no bid levels on the new International Wire Group 9¾% senior secured notes due 2015, quoting them offered at 1001/2, which he cautioned "could be high." The bonds had priced earlier in the session at 99.038.

ATP mega-deal up slightly

A trader saw ATP Oil & Gas Co.'s new 11 7/8% senior secured second-lien notes due 2015 at par bid, 100¼ offered, adding that "they really didn't go anywhere."

The Houston-based oil and gas exploration and production company's $1.5 billion issue had priced on Monday at 99.531 to yield 12%, then had started out on Tuesday around par bid, dipped to an intra-day low in the 99 5/8-99¾ range, before coming off those lows to bounce back to par, so "they didn't really move that much."

A second trader quoted the bonds "hanging in" at par-1001/4.

Merge only little moved

A trader saw Milwaukee-based medical software developer Merge Healthcare Inc.'s $200 million issue of 11¾% first-lien senior secured notes due 2015 trading in the morning at 97½ bid, 98½ offered, up just slightly from the 97.226 level at which the bonds had priced on Monday to yield 12½%, but after that, he said, "I never saw another thing. So there was not much action in those."

However, a second trader pegged the bonds at 98 bid, 98½ offered.

New Harrah's a bit higher

A trader said that Harrah's Operating Co.'s 12¾% notes due 2018 "got a little better, finally."

He said that the Las Vegas-based casino giant's upsized $750 million issue of those bonds, which priced as a drive-by at 98.778 a week ago to yield 13%, had fallen as low as 98 last Friday and on Monday, but then rebounded on Tuesday to the 99 level. He saw the bonds left at 983/4-99, "off the bottom."

Market indicators seen rebounding

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index gain 5/8 point on Tuesday to end at 100 7/8 bid, 101 1/8 offered, after having eased over the two prior sessions, including Monday's ¼ point decline.

The KDP High Yield Daily Index meantime was up by 13 basis points on Tuesday at 72.71, after having plunged by 17 bps on Monday, while its yield came in by 5 bps to 7.61%, after having widened by 6 bps on Monday.

Advancing issues overtook decliners on Tuesday and held a four-to-three edge, after the market had seen its first negative breadth reading on Monday following a long string of gains.

Overall market activity, represented by dollar-volume levels, rose by 1% on Monday from levels seen the previous session.

Teck racks up the trades

A trader said that Teck Resources' bonds "have been trading a ton," apparently helped by the Vancouver, B.C.-based mining and energy company's recent upgrade to investment-grade status by Standard & Poor's, although Moody's still holds the bonds at Ba1, its top junk rating.

"They've been trading real tight," he said, with yields "in the 3s, 4s, upper 4%,, maybe 5% for the '19s, and some people have even been quoting them on spread," like an investment grade issue - despite the split rating.

"They've been the most active stuff."

He said the bonds were pretty much the same on Tuesday as they had been on Monday, when Teck softened, despite the upgrade, amid a generally easier junk market.

A market source at another desk saw the company's busiest issue, the 10¾% notes due 2019, at 124¾ bid, while its 10¼% notes due 2016 stood at 121 bid, with well over $60 million of each bond having changed hands by mid-afternoon, making the Teck twins easily the busiest high-yield bonds of the day.

He also saw Teck's 9¾% notes due 2014 finishing out at 121½ bid, with a yield actually dipping marginally below 4%, on trading of over $50 million.

Another trader called the recent activity in the bonds "unbelievable" and marveled that "I remember trading them in the 70s" some months back, but now, he said, they had risen handsomely on the upgrade.

He quoted the 103/4s at a high tick of 125 1/8, and saw the bonds trading "relatively tight" in that 124 7/8-125 1/8 range.

"It looks like they're going to be taken out," he suggested.

Financials on fire

In the distressed-debt arena, a trader said there was "all kind of stuff going on. The mortgage-insurance world is the exciting world today."

He said that Radian Group Inc.'s bonds were up about 6 to 7 points, and he also saw strength in PMI Group Inc. and MGIC Investment Corp.

He said the latter company "was what started it this morning - they mentioned that they're coming to market, and are able to raise a good amount of money in the debt market."

He noted that news that the Milwaukee-based company plans a public offering of $700 million in common stock and $300 million in convertible senior notes due 2017 caused its stock to fall 1½ points, but all the bonds were rushing higher.

He said that MBIA Inc.'s 14% surplus notes due 2033 got up to 77 bid on Monday - which he called "a big move," a gain of 5 points from the lower 70s - and then added on another point on Tuesday, ranging between 77 and 79, although he said there was "not much action in it" on Tuesday.

He said Ambac Financial Group Inc.'s 6.15% notes due 2087 "traded actively," but he saw little movement from the 101/2-11½ context, finishing about unchanged on the day at 11 bid, "so they had activity but they didn't have the other names did, because they're in different businesses."

He said Ambac's 9 3/8% notes due 2011 were at 67 bid, which he called up a couple of points, although he noted that the movement came in smallish odd-lot dealings not really representative of anything, and opined that throwing out those small pieces, the bonds were probably unchanged a few points below that 67 level.

"This whole sector" has firmed up, he said.

Paper and packaging percolating

A trader said he saw Smurfit-Stone Container Corp.'s paper, like its 8¼% notes due 2012, unchanged around a 91-93 context, which he called "pretty much unchanged - but good volume though." He saw the 81/4s ending at 92 bid, along with the 8 3/8% notes due 2012, which ended at 93, on "very good volume."

He saw NewPage Corp.'s 10% notes due 2012 unchanged at 71-72. He also saw Verso Paper Corp.'s 11 3/8% notes due 2016 at 94 bid, 95 offered, which he said was probably down a point from Friday's levels.

A brokerage house analyst meantime noted that while there had been recent activity in names like NewPage and Verso, mostly to the upside, based on positive analyst commentary about the coated-paper sector in general and about the publicly traded Verso in particular from such houses as Credit Suisse, JP Morgan and Goldman Sachs, "there's been no positive data" on that segment of the paper business. "There's been a lot of forward looking [positive] commentary - but we haven't seen any price increases," for instance.

He was of the opinion that NewPage, notably, was "rallying a little ahead of itself," but said that for now, he was "not going to be positive" on the sector absent price increases. He also cited other signs that what he called the "secular decline" in the coated paper market was continuing.

Automotive issues mostly idling

A trader said that General Motors Corp.'s benchmark 8 3.8% bonds due 2033 were up a point at 37 bid, while GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 little changed in a 92-93 area. "I see very little activity" in Ford, he said.

Another trader pegged the GM benchmarks at 36 bid, 37 offered, calling them unchanged, while seeing Ford's long bonds up ½ point on the day at 92½ bid, 93½ offered.

Visteon Corp.'s 7% notes due 2014 were unchanged around par.

Broad market firmer

A trader saw Blockbuster Inc.'s 9% senior subordinated notes due 2012 up about a point on Tuesday in the 25-25¼ area, on "good volume."

A market source at another desk said trading in the Dallas-based movie-rental company's bonds was brisk, with volume of over $22 million recorded by mid-afternoon, and probably more after that.

A trader said that Claire's Stores Inc.'s 9¼% notes due 2015 were trading at 90½ bid, 92 offered, "probably up a point - not much trading, but nevertheless up."

Rotech Healthcare Inc.'s 9½% notes due 2012 "moved up a little but," a trader said, to an 89ish context.

"There was some activity in that name - not a lot, because you don't see it trade much, but there were some trades in that 89-89½ area. You don't always see activity in that name."

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