No pricings but casinos, others, slate deals; new Samson, Ineos, Medical Property bonds head higher

By Paul Deckelman and Paul A. Harris

New York, Feb. 6 - The high-yield primary arena saw a quiet session Monday, at least in terms of pricings - there were none. That was quite a switch from Friday, when nearly $3.5 billion of new junk paper came to market to close out a better than $15 billion week, the busiest such new-issue period since last May.

But while no deals were actually completed, a number got started, including several prospective transactions emerging from the gaming sector, which last week saw a successful new deal come from Spain's Codere Finance (Luxembourg) SA.

The upcoming deals will be shopped around were heard by syndicate sources to be originating with domestic issuers - Station Casinos, Inc., Circus and Eldorado Joint Venture and Silver Legacy Resort Casino.

Away from the gaming sector, prospective issuers heard to be hitting the road to market bond transactions included Banro Corp., Core Educations and Consulting Solutions, Inc., Lone Pine Resources Canada Ltd., Numericable Finance& Co. SCA and Pacific Drilling SA. Lone Pine and Numericable are expected to price later this week.

Among the deals which priced last week, Friday's offerings from Samson Investment Co., Ineos Finance plc and Medical Properties Trust Inc. were all seen well above their par issue prices.

There was also a fair amount of activity Monday in some notable deals which priced back at the end of January, including Ford Motor Credit Co. and SLM Corp.

Away from the new deals, traders said that activity was muted in Junkbondland, with several suggesting that many market participants were, as one put it, "still hung over " from the big round of Super Bowl parties this past weekend.

Statistical performance indicators closed mixed.

Primary exhales

The primary market took a breather on Monday, with no issues pricing.

It marked just the second session of the past 13 sessions to pass without seeing at least one drive-by deal price.

"People are reluctant to come in on Monday and bring a drive-by," a syndicate banker explained.

"You need to get up to speed with the financial headlines of the weekend," the banker added, forecasting that respite in the primary market will be short one.

Lone Pine starts roadshow

The new issue market did generate news.

Lone Pine Resources Canada began a roadshow on Monday for its $200 million offering of five-year senior notes, which are expected to price later this week.

Credit Suisse, J.P. Morgan and Scotia are the bookrunners.

The Calgary, Alta.-based oil and gas exploration, development and production company plans to use the proceeds to repay debt.

Numericable roadshowing

French cable operator Numericable began a European roadshow on Monday for its €350 million offering of seven-year senior secured notes (expected ratings B2/B).

The roadshow wraps up on Thursday and the deal is expected to price on the same day.

Investor calls will be available for accounts in the United States.

J.P. Morgan is the physical bookrunner for the debt refinancing deal. Goldman Sachs, BNP Paribas, Credit Agricole and HSBC are the joint bookrunners.

An investor who plays euro-denominated deals said that Numericable is expected to get done with a yield in the context of 12½%, and added that the deal is not expected to grow beyond €400 million.

Core roadshow for Wednesday

Core Education and Consulting Solutions will start a roadshow on Wednesday for its $200 million offering of five-year guaranteed senior notes, which are set to price in the early- to middle part of the Feb. 13 week.

Barclays and Jefferies are the joint bookrunners.

The company plans to use part of the proceeds to redeem preferred shares.

These proceeds will then be used to repay rupee debt and for general corporate purposes, including funding capital expenditures in India.

The proceeds also will be used repay debt and for general corporate purposes

Station Casinos step-up notes

Dealers will undertake the syndication of Station Casinos' $625 million tranche of senior step-up notes due June 18, 2018 (/CCC+) during a roadshow set to begin on Wednesday.

The initial coupon will be 3.65%. It steps up annually to 3.66%, 3.67%, 4.87%, 7.22% and to 9.54% in 2017.

There is a 1% duration fee payable on June 1, 2016 and on June 19, 2017.

Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are the joint bookrunners.

The notes are part of the financing related to the Las Vegas-based casino company's exit from Chapter 11 bankruptcy in June 2011.

Pacific Drilling plans deal

Pacific Drilling is conducting a full roadshow in order to privately place $300 million of its senior notes.

Pareto, DnB NOR and RS Platou are the joint lead managers and joint bookrunners.

The proceeds will be used to fund working capital and company growth and for general corporate purposes.

The company is an ultra-deepwater drilling services provider to the oil and natural gas industry. It was formed in Luxembourg. Its operational headquarters are in Houston.

Circus & Eldorado to roadshow

Circus and Eldorado Joint Venture plans to start a roadshow on Tuesday for its $120 million offering of eight-year senior secured notes.

Deutsche Bank is the sole bookrunner for the debt refinancing deal.

New Samson shows strength

Traders on Monday saw Samson Investment's new 9¾% notes due 2020 having firmed solidly from the par price at which the Tulsa, Okla.-based oil and gas exploration and production company had priced its $2.25 billion behemoth of an offering, which was restructured to just one big eight-year tranche after an originally planned 10-year note portion was dropped.

Those bonds appeared too late in the session Friday for any kind of an aftermarket. But on Monday, a trader saw them having moved up to 101 7/8 bid, 102 1/8 offered.

A second trader saw them even better, at 102¼ bid, 102½ offered.

Ineos improvement continues

The traders saw more upside in the new 8 3/8% senior secured notes due 2019 that Ineos Finance, a unit of the eponymous British chemical manufacturer, priced on Friday.

That $1 billion offering priced as part of an overall two-part transaction - the company also sold €500 million of seven-year floating-rate notes, with both tranches pricing at par. The dollar bonds were heard to have shot up to levels above 103 bid in initial aftermarket action late Friday.

On Monday, a trader said the new bonds "were up nicely."

"They held their gains and then some," going home at 103½ bid, 104 offered, the trader said.

At another desk, those new bonds were being quoted at 103½ bid, 103 7/8 offered.

Medical Properties pop

A trader said that Friday's other deal - a $200 million drive-by offering of 10-year bonds from Birmingham, Ala.-based health care real estate investment trust Medical Properties Trust - also was up on the session.

He saw the 6 3/8% notes due 2022 at 101 bid, 101½ offered, up from their par issue price.

Limited up a little

Among the deals that came to market earlier last week, a trader saw Columbus, Ohio-based apparel and personal care products retailer Limited Brands Inc.'s $1 billion of 5 5/8% notes due 2022 at 102 3/8 bid, 102 7/8 offered.

That quickly-shopped deal priced late Thursday at par, after having been upsized from an originally announced $750 million, and initially traded between 102 and 102½ when they were freed for secondary activity on Friday.

ServiceMaster moves up

Memphis-based lawn care and pest-control services provider ServiceMaster Co.'s 8% notes due 2020 were seen by a trader on Monday pushing up to 103¼ bid, 10¾ offered.

That was up solidly from the initial trading levels seen on Friday, when they began trading after pricing late in the session on Thursday.

That $500 million deal, upsized from the original $400 million, priced at par too late in the day Thursday to trade; on Friday, the bonds rose to 102¾ bid, 103 offered.

TXU trades around

A trader saw "size trading," in the new 11¾% senior secured second-lien notes due 2022 issued by Energy Future Intermediate Holding Co. LLC.

That quickly-shopped $800 million issue, which doubled in size from the originally planned $400 million, priced on Wednesday at 98.535 to yield 12%, then moved up in initial aftermarket trading to 99 5/8 bid, par offered. By Thursday, it was up to par bid, 100½ offered.

On Monday, he saw those notes having firmed still further to 100¾ bid, 101 1/8 offered.

He also saw parent Energy Future Holdings Corp.'s 10 7/8% notes due 2017 up 3 points on the day, to 82½ bid, 83 offered, which he said was a 4- to 5-point gain from their levels last week. "But it was only on, like three trades," the trader said. "I don't think it was representative."

He saw more dealings in the Dallas-based utility operator's 6.55% bonds due 2034, which traded in the 47½ area, about unchanged. "That was decent volume - $7 million to $10 million traded."

Besides activity in the cash bonds, he also saw "an awful lot of trading" in CDS contracts giving default protection to holders of the various bonds of the company, which was formerly known as TXU Corp.

"It was very active," the trader said.

Homebuilder bonds diverge

One of the traders saw KB Home's 8% notes due 2020 trading on Monday at 98½ bid, 99½ offered.

That was little changed from the 98.523 level at which the Los Angeles-based homebuilder priced Wednesday a quick-to-market $350 million offering, upsized from an originally announced $250 million.

The bonds priced to yield 8¼%.

After pricing, they initially moved up to par bid, 100¾ offered when freed to trade later Wednesday. But, then the bonds gave it all back on Thursday, returning to levels around their issue price.

But KB sector peer Toll Brothers Finance Corp.'s 5 7/8% notes due 2022 kept the gains that they notched in the secondary arena after pricing last Tuesday at 99.998 to yield 5 7/8%.

The Horsham, Pa.-based builder's quickly shopped and split-rated (Ba1/BB+/BBB-) $350 million deal - upsized from $250 million originally - traded up to 102 bid, 102½ offered in Tuesday's aftermarket. The issue has held those higher levels since then.

Although the deal priced off the investment-grade desks and attracted considerable high-grade attention, there also was a junk presence in the trading, market sources said.

Sally Mae seen solid

Another recent deal that carried a split rating (Ba1/BBB-) and came off the investment-grade desks, but saw some interest from junk bond investors was SLM's upsized $1.5 billion offering of five-year and 10-year notes, which priced Jan. 24.

Those bonds have been among the most active issues during a number of sessions, including Monday, when a market source said that more than $27 million of Sally Mae's 7¼% notes due 2022 changed hands, moving up 1¼ point on the session to end at 102¾ bid.

That put it right near the top of the day's most-actives list.

That $750 million issue, upsized from an originally planned $500 million, priced at 98.264 to yield 7½%, and then moved up to 100 5/8 bid, 101 1/8 offered when they began trading around after their pricing.

The Newark, Del.-based education financing company's $750 million of 6% notes due 2017, which priced at 98.942 to yield 6¼% after being upsized from an original $500 million, moved up to 100¼ bid, 100¾ offered in initial aftermarket action.

In Monday's dealings, which saw more than $12 million of the bonds traded, were about unchanged on the day at 102½ bid, although that was well up from their pricing and initial aftermarket levels.

Ford Credit climb continues

A trader saw Ford Motor Credit Co. LLC's 4¼% notes due 2017 at about 101 3/8 bid on Monday, up five-eighths point on the session, on volume of more than $9 million.

The loan-finance arm of Dearborn, Mich.-based automotive giant Ford Motor Co. priced $1 billion of those notes in a quick-to-market deal back on Jan. 31.

They came to market at par and initially did not move up much in the secondary, owing to the relatively small size of the coupon, traders said, which limited its attractiveness to junk investors. But the bonds have been gradually edging up since then to reach current levels.

A quiet session

Away from the new deals, a trader said that "the overall tone was firm," riding the momentum of last week's big wave of issuance and equally big wave of investor money continuing to flood into the junk market, as indicated by the big inflows to high-yield mutual funds. That's considered a good proxy for overall liquidity trends.

"I don't see this changing any time soon," the trader said.

However, he added that Monday's activity level seemed muted.

"There were a lot of cleanups, and we traded a lot of line items off people's books- that was basically it," he said.

He theorized that "it was the Super Bowl hangover" that held activity down.

With a lot of the customer base being in New York and Boston - the two cities whose teams played in Sunday's well-watched championship game, "I think a lot of people took off today," the trader said.

Market indicators mixed

Statistical measures of junk-market performance were mixed on Monday, after having been up for two consecutive sessions on Thursday and Friday.

A trader saw the CDX North American Series 17 High Yield index down by 5/16 point on Monday, to end at 98 5/16 bid, 98 9/16 offered, after it had jumped by nearly 1 whole point on Friday.

The KDP High Yield Daily Index, though, gained 5 basis points Monday to end at 74.18, on top of the 20 bps advance on Friday. Its yield was unchanged at 6.70%, after having come in by 9 bps on Friday.

And the widely-followed Merrill Lynch High Yield Master II Index notched its fifth consecutive gain on Monday, when it was up 0.164%. That followed Friday's 0.216% gain.

That lifted the index's year-to-date return to 3.545% on Monday, a new peak level for the year so far, from Friday's 3.374%, the previous high-water mark for the year.

Sprint active before earnings

Among specific secondary names, a trader said that Sprint Nextel Corp.'s paper was fairly active, particularly the Overland Park, Kan.-based wireless service provider's 6 7/8% notes due 2028, which he called "always pretty active."

He said he saw the bonds ending at 74½ bid, 75 offered, which he called down a half point from where they were over the past few days. He said the activity took place "on decent volume."

Sprint is scheduled to report fourth-quarter earnings on Wednesday, with analysts predicting a loss of 35 to 37 cents per share, almost four times its third-quarter red ink of 10 cents per share, and greater than the 29 cents per share loss seen a year ago.

But Sprint's Nasdaq-traded shares have been firming over the past few sessions and were up another 6% on Monday on nearly twice their normal volume.

ATP off a bit

ATP Oil & Gas Corp.'s11 7/8% senior secured second-lien notes due 2015 were seen down a half-point, around the 62 to 63 range.

A trader saw "not very much volume" in the Houston-based offshore energy exploration and production company's paper, saying the bonds "were more quoted down than traded down."

Caesars seen busy

A trader said that Caesars Entertainment Corp.'s 10% notes due 2018 remain one of the big volume names, seeing the Las Vegas-based gaming giant's issue start in a 79½ - 80 context, trade at 80-80½ most of the day and end at 80 bid.

"So that's up a half-point or unchanged, depending on which side of the trade you're on," the trader said.

He saw "good volume" in the bonds, issued back when Caesars was still widely known as Harrah's Entertainment Corp.

Springleaf softer again

A trader said that Springleaf Finance Corp.'s bonds were very active, following the downgrade of the Evansville, Inc.-based consumer lender and financial services firm formerly known as American General Finance when it was still apart of troubled insurance giant AIG.

A trader said its bonds, such as the 6.90% notes due 2017, traded down last week after the company announced the hiring of advisors Alvarez & Marsal North America, LLC and Houlihan Lokey Capital, Inc. - firms known for their expertise in restructuring and bankruptcy situations. The company also said it plans to close about 60 of its more than 1,000 branches, but said it would stabilize as the week ended.

On Monday, though, he saw them down a half-point to 1 full point, at 73¼ bid, 73¾ offered, after having traded between 73 and 74.

He said there was a lot of volume, "estimating it at a minimum of $25 million, calling it the third most active junk credit."

A market source at another desk pegged the company's 5 3/8% notes that are slated to come due on Oct. 1 92¾ bid, down 1 7/8 point on the day.

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