Phibro deal prices, moves up; Greektown also prices; Insight slates; Sorenson off on rate news

By Paul Deckelman and Paul Harris

New York, June 28 - Phibro Animal Health Corp. successfully priced an issue of eight-year notes on Monday, high-yield syndicate sources said.

When the Ridgefield Park, N.J.-based animal health and nutrition products provider's new issue went into the secondary market, traders saw the deal pop by several points.

Greektown Superholdings Inc., the operator of a Detroit casino, priced a quickly appearing $385 million two-part stealth deal that didn't hit investors' radars until after it had already priced. Traders saw no aftermarket dealings in the new bonds.

The primary arena also saw regional cable and broadband operator Insight Communications Co. begin shopping around a $400 million eight-year notes issue.

Price talk meantime emerged on two deals, which are each expected to price sometime Tuesday - defense contractor DynCorp International Inc.'s $445 million of seven-year notes and consumer loan information provider Bankrate, Inc.'s $280 million of five-year senior secured notes.

In the secondary market, traders saw activity in Sorenson Communications, Inc.'s bonds, which fell by several points on news of a government ruling on reimbursement rates to providers of special communications services for the disabled.

On the energy front, there was no follow through seen from Friday's rise in ATP Oil & Gas Corp.'s bonds after the embattled energy provider successfully negotiated a new bank debt deal. BP Capital Markets plc's bonds were firmer on indications that a brewing hurricane in the western Caribbean is likely to avoid the area immediately around BP's ruptured Macondo Prospect undersea oil well - although the storm could still complicate oil-recovery efforts in the Gulf of Mexico.

Phibro prices atop talk

One deal crossed the finish line during the Monday primary market session.

Phibro priced a $275 million issue of 9¼% eight-year senior notes (B3/B) at 98.628 to yield 9½%.

The yield printed on top of price talk.

When the notes were freed for secondary dealings, a trader quoted the new issue as high as a 101-101¼ bid level, although he said the bonds later actually traded around 100½ bid, 101½ offered.

At another desk, a trader said the bonds traded up to 100¼ bid, 101¼ offered versus their 98.628 level at the pricing.

The first trader said that in rising nearly two points from their issue price, the bonds "had a pretty good pop." He added, however, that after that initial flurry, "it just kind of stalled out - OK, that's where it is, nobody cares, and we never really saw it again."

Noting the relatively modest size of the deal, he added that it probably "was just too small for anybody really to be trading in and out of it."

Bank of America Merrill Lynch ran the books.

Proceeds will be used to fund the tender offers for the issuer's 10% senior notes due 2013 and its 13% senior subordinated notes due 2014.

The order book was oversubscribed, and the deal was well-received, an informed source said.

Greektown exit financing

Although it priced last Friday, many market-watchers first got wind of the Greektown two-part deal on Monday morning.

The Michigan gaming company priced $385 million of 13% five-year senior secured notes in two series: $280.167 million of series A notes at 95 to yield 14.44% and $104.833 million of series B notes at 92 to yield 15.35%.

Several traders said that they had not seen any kind of activities the offering.

Goldman Sachs & Co. ran the books.

Proceeds will be used to finance the company's exit from bankruptcy.

Talking the deals

Setting the stage for Tuesday, DynCorp talked its $455 million offering of seven-year senior unsecured notes (B1/B/) with a yield in the 10½% area.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, Barclays Capital Inc. and Deutsche Bank Securities Inc. are the joint bookrunners for the LBO and debt refinancing deal.

Meanwhile Bankrate talked its $280 million offering of five-year senior secured notes (B2/B) to yield in the 12% area, including about 1 point of original issue discount.

Jefferies & Co. and RBC Capital Markets Corp. are the joint bookrunners for the acquisition financing.

Both deals are set to price on Tuesday.

Insight Communications starts roadshow

Insight Communications began a brief roadshow on Monday for its $400 million offering of eight-year senior notes.

The roadshow wraps up on Wednesday, and the notes are set to price thereafter.

Bank of America Merrill Lynch, JP Morgan, Credit Suisse and Morgan Stanley are joint bookrunners.

Proceeds will be used to fund a $300 million distribution to holders of the company's capital stock, with any remaining proceeds to repay its revolver and term loan A, and for general corporate purposes.

Nordenia starts Tuesday

Meanwhile, the European primary market, which saw issuers raise nearly €1.9 billion in five tranches last week, continued to generate news on Monday.

German packaging firm Nordenia International AG will begin a roadshow on Tuesday for its €280 million offering of seven-year senior second-priority notes (B2/B).

Barclays Capital and Deutsche Bank securities are managing the sale.

Market indicators are mixed

Back among issues having no new-deal connections, a trader saw the CDX North American HY Series 14 Index down by about a ½ point on Monday to around 95¼ bid, 95¾ offered, after having gained ¾ of a point on Friday.

The KDP High Yield Daily Index was essentially unchanged on Monday at 70.74, after having gained 5 basis points on Friday, while its yield was also little changed at 8.61%.

Advancing issues trailed decliners for a fourth straight session on Monday, although the difference between the groups widened out to around a six-to-five margin on Monday from around a handful of issues on Friday - less than a dozen - out of the more than 1,300 tracked.

Overall activity, represented by dollar-volume levels, rose by 13% on Monday, after having fallen by 26% on Friday.

Even so, those levels were still weak by normal standards.

"It was a pretty quiet day," a trader said, although he did see the market "feeling firm," up about a ½ point on average throughout the day.

Another trader saw things mostly silent and inactive.

"I don't want to say it's going to be a long summer - but I've got a bad feeling" about the lack of investor interest in the market.

He noticed that General Motors Corp.'s benchmark 8 3/8% bonds due 2033 - a "pretty liquid issue" - were hanging around the same 32¾ bid, 33 par territory where they had been last week.

"Nobody is doing anything," he declared.

Sorenson socked on rate news

A trader said that Sorenson Communications' 10½% notes due 2015 opened in a 70-70½ bid context, and by the end of the day, the bonds were trading into a 67½ bid, down 3 points.

He said it was "one of the more active names," with news out that would affect the bonds.

A second quoted the bonds "down a few points" in a 64 bid, 66 offered range, versus 68 bid, 70 offered at the start of the day.

Another trader, who saw the bonds "flopping around," said that they had traded into a 70 bid in the morning and then were going home offered at 68 with no bid.

A trader said the bonds were finishing in a 65 bid, 67 offered context, citing news out on the reimbursement rates, which the Federal Communications Commission announced on Monday. The reimbursement rates are for providers of video relay service, like Salt Lake City-based Sorenson, which allow hearing-impaired people to make phone calls by use of a videophone and a sign-language interpreter.

The trader said that the reimbursement rates, while a little higher than last year's, were "less than the market was expecting," causing the bonds to slide.

Sorenson's normally lightly traded bonds had also slid back in May when the market first became aware of the controversy over reimbursement rates and procedures following a Sorenson filing with the FCC, urging it to reject a multi-tier reimbursement schedule suggested by the National Exchange Carrier Association, a telecommunications industry group representing major phone carriers, claiming that such rates could drive Sorenson into bankruptcy and force other providers to leave the business.

"For instance, it would be folly to adopt either of NECA's proposals to base rates on provider's historical costs," Sorenson's filing asserted.

"Both proposals would result in bankruptcy for providers along with chaos for consumers. One of the proposals would likely drive all providers into bankruptcy, forcing consumers to revert to the slow process of typing their relayed communications, and the other would drive Sorenson into bankruptcy, likely stranding tens of thousands of consumers and making it uneconomical for them to be served by any other provider. The FCC lacks authority, under the[Americans with Disabilities Act of 1990], to adopt any rate, under any methodology, that would make it economically impossible to provide VRS."

ATP Surge subsides

Elsewhere, a trader said that he saw no activity whatsoever in ATP Oil & Gas' 11 7/8% second-lien senior secured notes due 2015.

"Surprisingly, there was not one thing in ATP," he said. "Usually, there are pages of it" on the Trace system.

Another trader quoted ATP's bonds at 74½ bid, 75½ offered, "pretty much unchanged, though on decent volume."

On Friday, the Houston-based energy exploration and production company's bonds had firmed smartly, up to a bid level around 75 or so, on the news that the company had reached an agreement with its lenders on a $150 million term loan facility due 2014 to replace its undrawn $100 million revolving credit facility.

ATP also got an option to increase its first-lien loan by up to an additional $350 million at some point in the future, for a total size of $500 million.

Traders said it represented an implied vote of confidence from the banks in ATP - whose bonds had cascaded down as far as the lower 60s earlier this month from their issue price just under par on April 19, the day before the Deepwater Horizon explosion and the subsequent rupturing of BP's well in its Macondo Prospect exploration area 40 miles off the Louisiana coast.

ATP had nothing to do with the Deepwater Horizon disaster, but its bonds have suffered on investor worry that the six-month moratorium on deepwater drilling in the Gulf, which the government imposed in the wake of the accident and the resulting environmental damage, may prove a serious negative for the company, which has most of its reserves in undersea fields there.

A New Orleans federal judge last week overturned the federal ban, saying it was overly broad and would harm the economy , but the White House quickly announced that it would appeal that ruling.

BP bonds better

A trader meantime saw BP's bonds firmer on "most issues," up a point in general, apparently given a boost by the news that Tropical Storm Alex, which has moved into the Gulf of Mexico from the western Caribbean around Mexico's Yucatan Peninsula. It is picking up strength to possibly form the first hurricane of 2010 and will likely make landfall somewhere on the Texas-Mexico border - far from BP's operation to skim off oil from the waters of the Gulf.

There had been investor fears that the storm could head for the Macondo Prospect area, which would have forced the Coast Guard to order the oil-recovery efforts shut down and direct all ships and personnel to leave the area ahead of the storm. Instead, the recovery work will go on, as will BP's efforts to drill a relief well nearby that would aid in stopping the flow of oil from the ruptured well.

However, the trader said that with this year's hurricane season only just started -it runs through Nov. 30, although such large storms are rarely seen after September - "I'm sure we're going to hear that same story [about possible disruption of BP's cleanup efforts in the Gulf] from now through December."

Another trader agreed that the BP bonds were doing better, seeing the beleaguered British oil giant's 3 5/8% notes due 2014 at just over 85, up more than 2¼ points on the session.

BP's 25% partner in the ruptured well, Anadarko Petroleum Corp.'s 5.95% bonds due 2016 were up 1½ points on sector sympathy to end at 87 bid.

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