Insight deal prices, firms as H1, Q2 close; Postmedia shops notes; First Data bounces back

By Paul Deckelman and Paul A. Harris

New York, June 30 - Insight Communications Co., Inc. priced a $400 million offering of eight-year notes on Wednesday, the only pricing of the session and the final pricing of a very busy first half of 2010 - but also of a somewhat disappointing second quarter, which failed to keep up the torrid new-deal pace seen during the first quarter. When the New York-based operator of Midwestern cable systems' new bonds were freed for secondary dealings, traders reported them having firmed a bit from issue.

High yield syndicate sources meantime heard that Postmedia Network Inc. had begun a roadshow to shop around a $275 million issue of senior secured notes, which will help to fund the purchase of the restructuring Canadian media giant Canwest's publishing assets.

And out of Europe came word that German tire manufacturer Continental AG will be bringing a benchmark-sized offering of euro notes to market sometime in early July.

In the secondary market, things were seen as pretty quiet, as activity began winding down ahead of the upcoming Independence Day holiday break; although Thursday and Friday will officially be full days, the reality is that volume is expected to fall off and many market participants are likely leave early, assuming they come in at all, particularly on Friday. Monday will see a full market close.

With Wednesday's market still open for business, meantime, one of the few names to stand out was First Data Corp., whose bonds rebounded a little from the drubbing which they took on Tuesday, although there was still no fresh news seen out on the Atlanta-based electronic transaction processing company that might explain the action its bonds have seen.

Insight prices $400 million

As the month of June, as well as the first half of the year 2010, came to a close on Wednesday, Insight Communications priced a $400 million issue of eight-year senior notes (B3/B-) at par to yield 9 3/8%.

The yield printed in the middle of the 9¼% to 9½% price talk.

Bank of America Securities Merrill Lynch, J.P. Morgan Securities Inc., Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. Inc. were the 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 to be used for general corporate purposes.

Biggest first half ever

The first half of 2010 goes into the record book as the biggest first half in the history of the high-yield primary market, according to Prospect News data.

The first half comes to a close having seen $119 billion price in 284 junk-rated, dollar-denominated tranches.

Despite the anemic issuance totals of May ($7.28 billion) and June ($8.75 billion), the first half of 2010 tops the next biggest first half by more than $10 billion - the first half of 2007 saw $108.3 billion of issuance.

The 2010 first half comes in at more than 40% above the average first half issuance since 2001, which is just under $70 billion, according to Prospect News data.

Postmedia post-Independence Day

The thin calendar of deals in the market for the post-Independence Day week grew by one on Wednesday.

Postmedia Network began a roadshow for its $275 million offering of eight-year second-lien notes (B3/B-).

The deal, which is being led by joint bookrunners JP Morgan and Morgan Stanley, is expected to price on July 7.

Proceeds will be used to acquire the assets of Canwest LP.

Continental benchmark

Meanwhile, the euro-junk market continued to buzz.

German tire-maker Continental AG is expected to price a benchmark-sized offering of euro-denominated high-yield notes in early July, according to market sources.

Citigroup is expected to lead a syndicate of underwriters, a source said.

The deal could come as early as Thursday, according to one market source who added that the company has already completed a non-deal roadshow.

Proceeds will be used to refinance debt related to the acquisition of the company by Schaeffler GmbH in 2008.

Meanwhile, Nordenia International AG is already in the market with a €280 million offering of seven-year senior second priority notes (B2/B), via Barclays Capital and Deutsche Bank Securities.

The Nordenia bonds could price late this week or early next week, an informed source said.

And Germany's Oxea GmbH is roadshowing €500 million equivalent of seven-year senior secured notes (B2/B+) in Europe.

The deal is expected to be issued in dollar- and euro-denominated notes.

A roadshow will get underway in the United States during the week ahead.

Deutsche Bank Securities, Morgan Stanley and JP Morgan are leading the offering.

New Insight bonds improve

When Insight Communications' 9 3/8% notes due 2018 were freed for secondary dealings, a trader quoted the issue at 100¾ bid, 101¼ offered.

That was up from the par level at which the $400 million issue had priced earlier.

CKE deal awaited

A trader, noting that the CKE Restaurants issue had not yet priced by Wednesday's close, opined that "if they don't price it Thursday," the deal likely will not get done until after the July 4 holiday break. While Friday is officially a regular full day - at least according to the Securities Industry and Financial Markets Association, which in 2009 did away with the traditional, beloved early close ahead of Independence Day and several other holidays - the reality, the trader said is that "it's going to be empty Friday."

Market indicators turn mixed

Back among issues having no new-deal connections, a trader saw the CDX North American HY Series 14 Index lose 3/8 point on Wednesday to end at 94 bid, 94½ offered, after having fallen by 1¼ points on Tuesday.

The KDP High Yield Daily Index meantime eased by 3 basis points on Wednesday to 70.37, after having retreated by 34 bps on Tuesday, while its yield edged upward by 1 bp, to 8.72%, after having gapped out by 10 bps on Tuesday.

The indexes demonstrated that the junk bond market had pretty much just run in place over the past month, with the most recent readings not too much different than where they had been at the end of the previous month. The CDX, for instance, had closed out trading on Friday May 28, the last trading session of that month - the market was closed for Memorial Day on Monday May 31 - at 94¾ bid, 95¼ offered, while the KDP index had finished May at 70.01, with a yield of 8.89%.

What is more striking is the deterioration seen in Junkbondland's performance since the end of April, when the market was still on an upside roll, just before it began losing steam. The CDX, for instance, had finished out trading on Friday April 30 at 99 7/8 bid, 100 3/8 offered, while KDP's index stood at 73.10, with a yield of 7.81%.

Advancing issues did overtake decliners on Wednesday, breaking a five-session losing streak, although their winning margin was about two dozen issues out of the nearly 1,400 tracked, versus the downsiders' nearly seven-to-five edge on Tuesday.

Overall activity, represented by dollar-volume levels, fell by 22% on Wednesday, after having risen by 29% on Tuesday.

A trader called Wednesday's session "a very boring day," quipping that he was in danger of falling asleep. "We're legging it to a four- or five-day weekend," he said, noting that while it was the end of the month - to say nothing of the end of the calendar second quarter and the first half - there was "not a flurry" of significant activity.

He said that he was hearing from other market participants that the day was "painfully quiet."

It was, he said, one of those days "when you wonder 'why am I here today?' It's the regret of bad vacation planning to be stuck in the office on a day, and a week, like this."

A second trader said that he could "definitely tell you that that it's slow. There was nothing much doing."

Yet another, seeing an overall easier market tone amid the quiet activity where nothing really stood out, said it was "just the regular getting beat up."

First Data firmer

Among specific secondary market issues, a trader saw First Data's bonds anywhere from unchanged to up a point on the day, as the bonds came back from the slide seen on Tuesday, when they had all been down between 3 and 5 points on the day, even though there was no fresh news out on the company which might explain that slide.

The trader suggested that it might have been be a case of Tuesday's investors "following the old rule - sell what you can, rather than what you want to," since the electronic transaction processors big, liquid issues are frequently among the first things sold when an account wants to raise capital.

After Tuesday's tumble, he suggested, investors may have felt that selloff was overdone and moved in on Wednesday to take advantage of the lower levels.

He saw First Data's 9 7/8% notes due 2015 up ¼ point at 76¼ bid, on "pretty good volume." He also saw its 11¼% notes due 2016 up a full point at 62, though on only "small volume."

And he quoted First Data's 10.55% notes due 2015 unchanged at 72¾ bid.

At another desk, a market source also saw the 10.55s unchanged at 723/4, but he pronounced the 9 7/8s more than a point better on the day at just over the 77 mark.

Ford idle even with debt payment

A trader saw Ford Motor Co.'s bonds not much changed on the news the giant carmaker had paid off nearly $4 billion of debt at the union level, involving a United Auto Workers healthcare trust which now administers and pays for the company's healthcare plans for its current workers and its retirees.

He quoted Ford's 7% notes due 2013 unchanged at 103 bid, on "not much volume," while its 7.45% bonds due 2031 were likewise unchanged around 90½ bid, 91½ offered, "so nobody cared [about the news] There was some volume, but not a lot. We didn't see a change in the bonds based on that."

However, another trader saw the long bonds up a point at 90 bid, 92 offered, noting that the news of the debt paydown had probably helped the bonds.

Analysts said that the nearly $4 billion debt payment represented a sign of the Dearborn, Mich.-based Number-Two U.S. carmaker's confidence that it remains on track to deliver what its chief executive officer, Alan Mulally, predicted would be "solid profits" this year.

ATP Oil off

In the energy arena, a trader said that ATP Oil & Gas Corp.'s 11 7/8% second-lien senior secured notes due 2015 were "hanging around" the 72-73 level, after being "a little higher than that earlier, though not much," starting out the session as good as a 731/2-74½ context. He said the bonds ended down a point from such lofty levels.

Another trader said that the ATP bonds "traded down in the late afternoon ," into a 72 bid, versus previous levels in a 72-74 or a 73-75 context the last day or two, "depending on what time of day it was." He suggested that "somebody decided to get it off their books by month's end."

The Houston-based independent energy exploration and production company's bonds - which had priced just under par, at 99.531 to yield 12%, back on April 19 - have fallen to their present levels since their pricing, which took place just the day before BP plc's 65%-owned Macondo Prospect undersea well in the Gulf of Mexico ruptured and began spewing thousands of barrels of crude oil into the waters, following the explosion and fire aboard the leased drilling rig, Deepwater Horizon.

ATP played no role in the explosion and subsequent oil spill, but investors have hammered its bonds down ever since the mid-April mishap on fears that tough new restrictions on offshore and deepwater drilling in the Gulf of Mexico imposed by Washington in the wake of the accident will harm the company, which has most of its proved petroleum reserves in the Gulf.

Elsewhere in the oil patch, a trader said that BP Capital Markets plc's 5¼% notes due 2013 were "pretty much unchanged" around 92-93, and also saw beleaguered British oil giant's longer paper, such as the 4¾% notes due 2019 likewise generally steady at 84 bid. "Of course, there was a lot of quoting and a lot of trading in that name," he said.

A trader said that the bonds of BP's junior partner in the blown-out Gulf well, Anadarko Petroleum Corp., were also little changed on the day. He quoted its 5.95% notes due 2016 staying around an 851/4-86¼ context.

And Deepwater Horizon owner Transocean Inc.'s bonds were going home "pretty much how they started the day as well," with its 6% notes due 2018 at 91 bid, and its 6.80% bonds due 2038 anchored in an 89-90 area.

Smurfit Stone emergence does little for bonds

A trader said that Smurfit Stone Container Corp.'s bonds "looked like they were weaker, the paper looked lower," even amid the news that the Chicago-based packaging products company had officially completed its reorganization and emerged from Chapter 11, a year and a half after its January 2009 bankruptcy filing.

He saw its bonds, like the 8% notes due 2017, at 77 bid, 79 offered, pretty much unchanged.

"That's quoted," he pointed out - "you don't get much trading on the day when they come out."

A market source at another shop saw its 8¼% notes due 2012 down 1½ points on the day at just under 78.

The company managed to shed some $3 billion of debt in its now-completed bankruptcy proceeding, issuing the debtholders new stock which will begin trading on Thursday.

Sorenson seems to steady

A trader said that Sorenson Communications Inc.'s 10½% notes due 2015 were "hanging around" at 63-64, down a point from 64 bid levels at the opening of trading.

Another trader quoted the bonds in a 63-65 context, saying that was about where the Utah-based company's bonds had gone home on Tuesday.

The company's bonds had been beaten down into the low 60s from around 70 the previous two sessions on investor disappointment at a reimbursement schedule which the Federal Communications Commission adopted for providers of video relay service like Sorenson, which sells products and services that enable hearing-impaired people to make phone calls using a videophone and the services of a sign-language interpreter.

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