TransUnion, upsized Hornbeck price to cap off $11 billion week; ATP jumps on production news

By Paul Deckelman and Paul A. Harris

New York, March 2 - TransUnion Holding Co. came to the high-yield market Friday with an unusually structured $600 million senior secured offering - a payment-in-kind toggle note. The credit reporting company's new deal was seen to have moved up in the aftermarket.

Also pricing was an upsized $375 million issue of eight-year notes from Hornbeck Offshore Services, Inc., a provider of marine transportation and other services to the offshore energy industry. Traders said that quick-to-market deal started slowly when it was freed to trade, but eventually moved up modestly.

The $975 million of bonds that priced capped off a week which saw over $11 billion of new dollar-denominated, junk-rated paper price in 21 tranches - about double the previous week's $5.775 billion of new paper priced in 10 tranches. It was the second-busiest week this year in the new-deal arena, lagging only the week ended Feb. 3, which saw more than $15.7 billion come to market in 26 tranches.

On a year-to-date basis, that lifted the new issuance total to $65.5 billion in 127 deals, running about 5% ahead of the $62.45 billion in 149 deals which had priced by this time last year. That represented a strong pickup in activity on the week, as the year-to-date total had lagged the previous year's by around 11% at the end of last week.

There were also a trio of euro-denominated pricings on Friday from the financing arms of several European issuers - British metals firm Eco-Bat Finance plc, German building materials company HeidelbergCement Finance BV and Swiss travel services provider gategroup Finance SA.

Back among the dollar deals, traders saw continued brisk activity among issues which priced earlier in the week, notably QEP Resources, Inc., Virgin Media Finance plc and R.R. Donnelley & Sons Co., as well as other relatively recent offerings from Goodyear Tire & Rubber Co. and Chesapeake Energy Corp.

Away from new-deal-centric activity, traders said that the secondary market seemed a little heavier than it's been before, with more selling seen.

However, that was not the case in the day's busiest issue - ATP Oil & Gas Corp., whose bonds shot up by several points, along with its shares, after the offshore energy operator released production estimates for a wells that was found this week to contain sizable oil and natural gas reserves.

Statistical indicators of junk market performance were seen mixed on both the day and the week.

Hornbeck drives through

The primary market saw two issuers, each one pricing a single tranche of notes, raise $975 million on Friday.

In a drive-by, Hornbeck Offshore Services priced an upsized $375 million issue of eight-year senior notes (Ba3/BB-) at par to yield 5 7/8%.

The yield printed at the tight end of price talk which was set in the 6% area. The amount was increased from $350 million.

J.P. Morgan, Barclays and Wells Fargo were the joint bookrunners.

The Covington, La.-based provider of marine services plans to use the proceeds to fund a tender its 6 1/8% notes due 2014 and for general corporate purposes.

TransUnion's PIK toggle notes

TransUnion Holding Co. priced a $600 million issue of 6.25-year senior secured PIK toggle notes (Caa1/B-) at par to yield 9.629%.

The yield came toward the tight end of price talk which had been set in the 9¾% area.

The cash coupon is 9 5/8%. The PIK coupon is 10 3/8%

Goldman Sachs and Deutsche Bank managed the sale.

Proceeds will be used to help fund the buyout of the company by Advent International and GS Capital Partners VI Fund LP from Madison Dearborn Partners and the Pritzker family for about $1.685 billion.

gategroup at the tight end

In the euro-denominated high-yield market, three issuers, each bringing a single tranche, raised €950 million.

Zurich-based travel services provider gategroup priced a €350 million issue of seven-year senior notes (B1/BB) at par to yield 6¾%, at the tight end of the 6¾% to 7% yield talk.

Global coordinator and joint bookrunner Credit Suisse will bill and deliver. Citigroup, Deutsche Bank AG and Goldman Sachs International are also joint bookrunners.

Proceeds will be used to repay debt.

Eco-Bat wraps five-year deal

Eco-Bat priced a €300 million issue of 7¾% five-year senior notes (B1/B+) at par to yield 7.752%.

The yield printed at the tight end of the 7¾% to 8% price talk.

Citigroup and Credit Suisse were the global coordinators and joint bookrunners. Barclays and ING were also joint bookrunners. Credit Suisse will bill and deliver.

The Matlock, England-based lead smelting company plans to use the proceeds to repay its revolver and for general corporate purposes.

HeidelbergCement yields 4%

German building materials company HeidelbergCement priced a €300 million issue of four-year notes (Ba2/BB/BB+) at par to yield 4%.

Morgan Stanley, Bank of America Merrill Lynch, Commerzbank AG, Deutsche Bank AG, Raiffeisen Bank, Danske Bank, SEB Bank, Nordea Bank AB, and Standard Chartered Bank managed the sale.

TransUnion trades up

When the new TransUnion PIK toggle notes were freed for secondary dealings, a trader quoted the bonds at 102 3/8 bid, well up from the par price where the credit-reporting company's $600 million of six-year paper had come to market.

A second trader characterized the new forward calendar deal as "freaking awesome - it traded up a lot!"

Hornbeck hanging around

The day's other dollar pricing, for Hornbeck Offshore's $375 million of eight-year notes, initially went up to 100¼ bid, 100¾ offered, after having priced at par, but then a trader said they tightened to 100¼ bid, 100½ offered.

A second trader said that "HOS traded, and I felt - for the first time in a while - that there were more sellers than there were buyers of that one."

He said there were "flipper" trades as high as 100½ bid. Later the market was straddling the par level. He quoted the offshore transportation and maritime services company's deal going home in a 100 to 100¼ context.

Yet another trader said the Hornbeck bonds "had a slow start" - but closed at 100½ bid, 100 5/8 offered.

Week's bonds trade around

One of the traders said there was "a ton of new issues trading around" in Friday's market - not surprisingly, given the heavy pace of issuance seen this week.

Friday, in fact, was the first day of the week which failed to top the $1 billion mark - and even then it was only $25 million off that blistering pace.

"I don't blame these companies for trying to refinance everything they can. I don't blame them at all," another trader said.

A trader said that Thursday's deal from Houston-based offshore marine services provider Gulf Mark Offshore, Inc. "did all right" on Friday, seeing the bonds in a tight 101 to 101 1/8 context. That $300 million issue of 6 3/8% notes due 2022 had priced at par and then firmed to 101 bid, 101 3/8 offered in initial dealings on Thursday.

He said that San Antonio-based media giant Clear Channel Worldwide Holdings, Inc.'s Texas-sized offering of 7 5/8% senior subordinated notes due 2020 "can't get out of its own way."

The $2.2 billion deal - massively upsized from $1.25 billion originally - consisted of a $275 million series A tranche and a $1.925 billion series B tranche. Both priced at par on Wednesday.

He saw the latter tranche hanging in just below its issue price at 99 7/8 bid, par offered - while the considerably less-liquid series A had fallen to 97½ bid, 98¼ offered.

Monday's deal from QEP Resources, Inc., a Denver-based oil and gas exploration and production company, was seen trading in a 101 to 101 3/8 context. "People liked that one a lot," a trader said.

The company priced $500 million of 5 3/8% notes due 2022 at par, which gradually moved up to a bit higher than par. Over $23 million of those bonds traded on Friday, making it one of the most active issues in Junkbondland.

"People love it," a trader said. "It's almost a high grade" at Ba1/BB+, and "a lot of people think it's going to be upgraded."

Other fairly busy issues included Tuesday's Virgin Media Finance plc $500 million offering of 5¼% notes due 2022. A market source saw nearly $9 million of the notes trading around 101 3/8 bid, versus the par level at which the British cable and broadband provider had priced its deal, upsized form $400 million.

Traders saw Chicago-based business services provider R.R. Donnelley & Sons Co.'s $450 million of 8¼% notes due 2019 get as good as 103½ bid, well up from par, where that deal had priced on Tuesday. Over $7 million changed hands, according to Trace.

One deal continuing to struggle was Linn Energy LLC's $1.8 billion of 6¼% senior notes due 2019, which had priced on Tuesday at 99.989 and then headed south from there.

On Friday, the Houston-based oil and gas operator's deal was seen in a 99¾ to par context - still under its issue price, though up from lows around 98 which it had hit earlier.

ATP improves solidly

Away from the new deals, a trader said that ATP Oil & Gas' issue of 11 7/8% second-lien senior secured notes due 2015 "was the big name today," quoting the Houston-based offshore energy company's bonds up around 3½ points at 69 bid, 69½ offered.

"They're lovin' life," he observed.

That jump followed the morning announcement that a company well in its Telemark hub in the Gulf of Mexico is expected to produce about 7,000 barrels a day of oil equivalent.

The company had announced earlier in the week that the well was likely to produce a substantial amount of oil and natural gas.

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