Carlson Wagonlit, Garden Ride, upsized Louisiana-Pacific price, all gain; new Dish disappoints

By Paul Deckelman and Paul A. Harris

New York, May 9 - Carlson Wagonlit BV came to the high-yield market on Wednesday with a two-tranche, $854 million equivalent offering of seven-year dollar- and euro-denominated paper. The travel services company's dollar notes were heard by traders to have firmed smartly when they were freed for aftermarket dealings.

That was also the case with building products maker Louisiana-Pacific Corp., which priced an upsized $350 million issue of eight-year notes. The debt moved solidly higher in secondary activity.

Home decor retailer Garden Ridge Corp. priced a $360 million issue of seven-year secured paper. As was the case with the day's other two pricings, those bonds were being quoted at higher levels in aftermarket action.

But Tuesday's two-part megadeal from satellite broadcaster Dish Network Corp. continued to struggle on Wednesday, with various traders and other market sources seeing both tranches of those bonds trading below their issue price; one trader described the paper as "languishing."

Apart from the issues which have actually priced, Libbey Glass Inc. and Crosstex Energy, LP each announced plans for new junk bond issues, with Libbey expected to price next week but Crosstex anticipated possibly as early as Thursday.

High-yield syndicate sources meantime hear price talk on packaging manufacturer Tekni-Plex Inc.'s $480 million tranche of seven-year secured notes, which may also price on Thursday.

Outside of the new deal realm, traders saw brisk upside activity in MetroPCS Wireless Inc.'s bonds and shares, on news reports the wireless telecommunications company was in talks to sell itself to the parent of larger rival T-Mobile. Sector peer Leap Wireless International's Cricket Communications Inc.'s bonds were also up.

But the overall junk bond market was heavier, according to statistical indicators.

Carlson upsizes euro tranche

Three issuers brought a combined four tranches of bonds on Wednesday. Issuance totals came to $1.18 billion and €300 million.

Carlson Wagonlit priced $854 million equivalent of seven-year senior secured notes (B1/B+) in two tranches.

The Amsterdam-based travel management services provider priced a $465 million tranche at par to yield 6 7/8%, at the tight end of the price talk that was set in the 7% area.

Carlson Wagonlit also priced an upsized €300 million tranche at par to yield 7½%, at the tight end of price talk that was set in the 7 5/8% area.

The euro-denominated tranche was increased from €275 million.

J.P. Morgan, BNP Paribas, Jefferies, Lloyds and Morgan Stanley were the joint bookrunners for the debt refinancing issue.

The deal went well, according to a trader from a high-yield mutual fund, who saw the par-pricing notes trade up sharply in the secondary, to 102 bid, 102¾ offered.

Garden Ridge prices

Garden Ridge priced a $360 million issue of seven-year senior secured notes (B2/B) at par to yield 10¾%, at the wide end of the 10½% to 10¾% yield talk.

Jefferies and UBS Securities were the joint bookrunners.

Garden Ridge, a Houston-based superstore chain specializing in home decor, plans to use the proceeds to refinance its existing debt.

Louisiana-Pacific upsizes

Louisiana-Pacific priced an upsized $350 million issue of eight-year senior notes (B1/BB) at par to yield 7½%, on top of price talk, according to a trader. The amount was raised from an initial $300 million.

Goldman Sachs, Bank of America Merrill Lynch and RBC were the joint bookrunners.

The Nashville-based building materials company plans to use the proceeds to repurchase, redeem or otherwise retire all of its outstanding 13% senior secured notes due 2017 and for other general corporate purposes.

Tekni-Plex talks $480 million

Tekni-Plex talked its $480 million offering of seven-year senior secured notes (Caa1/B-) to price at a discount yielding 10% to 10¼%.

Books close at 11 a.m. ET Thursday, and the deal is set to price thereafter.

Bank of America Merrill Lynch and Credit Suisse are the joint bookrunners.

Crosstex for Thursday

Crosstex Energy, LP and Crosstex Energy Finance Corp. plan to price a $250 million offering of 10-year senior notes (existing ratings B2/B+) on Thursday afternoon.

Bank of America Merrill Lynch is the left bookrunner. Wells Fargo, BMO, Citigroup and RBC are the joint bookrunners.

The Dallas-based midstream natural gas company plans to use the proceeds to help fund the acquisition of Clearfield Energy, Inc., including the expansion of the Cajun Sibon natural gas liquids pipeline.

Libbey starts roadshow

Libbey Glass began a roadshow and held an investor conference call on Wednesday for a $450 million offering of eight-year senior secured notes (existing ratings B2/B+).

The roadshow wraps up on Monday, and the deal is set to price after that.

Citigroup is the left bookrunner. Barclays and J.P. Morgan are the joint bookrunners.

The Toledo, Ohio-based glassware manufacturer plans to use the proceeds to make a pension plan contribution, to fund a tender offer for its existing notes and to call $40 million of those notes that remain outstanding following the close of the tender at 103.

Monier postpones

Germany's Monier Group has postponed its €250 million offering of seven-year senior secured notes (B2//B+) due to market conditions, sources said on Wednesday.

The deal, which was in the market via bookrunners JPMorgan, Deutsche Bank AG and Morgan Stanley, ran an investor roadshow and had been talked to yield 10¼% to 10½%.

However the company did not get traction among European accounts at those levels, sources said, adding that interest only developed when rate discussions were moved up to 11%.

Hence the company put out feelers to investors in the United States, according to a sellside source not in the deal.

The Frankfurt, Germany-based supplier of roofing products and services had planned to use the proceeds to refinance bank debt.

Sources parse weak Dish

The forceful technical bid that has sent some new deals soaring over their issue prices, including Carlson Wagonlit, is not lifting all boats, sources said on Wednesday.

In particular the massive, upsized Dish Network $1.9 billion two-part senior notes deal (Ba2/BB-/) that priced late Monday via Deutsche Bank has not benefitted.

The deal, which came in two bullet tranches, featured $900 million of five-year notes priced at par to yield 4 5/8%, and a $1 billion tranche of 10-year notes priced at par to yield 5 7/8%.

Both par-pricing tranches were trading in the low 99s on Wednesday afternoon, according to a trader from a high-yield mutual fund.

Terms on the deal did not surface until hours after Monday's market close, the trader recounted.

Meanwhile, market sources say, investors had been expressing displeasure at the yield talk - especially the 4¾% area talk on the five-year notes.

Interest in that tranche was shaping up around 5 1/8%, well north of talk, sources said.

The buzz in the market held that reticence to move talk higher prompted a large order to be withdrawn, sources said.

However, demand for the massive - and therefore expectedly liquid - deal remained extreme.

"This deal went into the wrong hands of the wrong accounts with the wrong motives," said the trader who provided Wednesday's below-issue trading levels.

"Syndicates have to do what they have to do.

"And there is plenty of demand for a big liquid name.

"But you can tell when something doesn't go right."

Traders noted that the new quick-to-market bonds quickly settled into 99-handle levels in Tuesday's trading, and that continued on Wednesday.

"Dish is still languishing below issue," a trader opined. "It never did pick up." He quoted both its $900 million of 4 5/8% notes due 2017 and $1 billion of 5 7/8% notes due 2022 around 99½ bid, 99¾ offered.

A second trader saw both tranches at 99½ bid, par offered.

At another desk, a trader said the 4 5/8% notes were at 99 bid, 99½ offered, while seeing the 5 7/8s at 99¼ bid, 99¾ offered.

Carlson, Louisiana-Pacific up

When Wednesday's new deals were freed for secondary market activity, a trader who was watching the new issues from Carlson Wagonlit and Louisiana-Pacific said that "both of them did very well," seeing both having pushed up to around the 102 bid level.

He saw Louisiana-Pacific's $350 million of 7½% notes due 2020 "wrapped around" the 102 mark at 101¾ bid, 102¼ offered.

He meantime saw travel services provider Carlson Wagonlit's $465 million of 6 7/8% senior secured notes due 2019 at 102 bid, 102½ offered.

A second trader saw Carlson Wagonlit's dollar-denominated paper trading around 101 7/8 bid, 102 3/8 offered, after having priced at par.

He saw the Louisiana-Pacific bonds first quoted around 101½ bid, up from their par issue price, and then later filling in the right side at 101½ bid, 102¼ offered.

Garden Ridge rises

The day's other pricing, from Garden Ridge, also saw some good upside during the day, traders said.

One saw the new bonds at 100½ bid, 101 offered, versus the par level where the $360 million of senior secured paper had priced.

A second trader saw that new paper at 101 bid, 101¼ offered.

Thompson trades up, again

The other deal that priced on Tuesday apart from Dish Network was seen performing much better than its larger counterpart. Denver-based molybdenum, copper and gold mining concern Thompson Creek Metals Co. Inc.'s $200 million of quickly shopped 12½% notes due 2019 pushed higher for a second consecutive session on Wednesday.

A trader saw those bonds at 101 bids, 102 offered, the same level at which they had traded on Tuesday in the aftermarket after the deal priced at par.

A second trader saw the bonds trading at bid levels between 101 and 1013/4.

And at another shop, a market participant quoted the bonds as having moved as high as 102 bid,

He saw over $11 million of those new notes having changed hands, making the credit one of the most actively traded in Junkbondland.

Ruby Tuesday still struggles

Monday's $250 million offering from Marysville, Tenn.-based restaurant chain operator Ruby Tuesday Inc. was no better on Wednesday than it had been on Tuesday, or on Monday.

A trader saw the 7 5/8% notes due 2020 at 97½ bid, 98¼ offered, while a second pegged them at 97 bid, 97½ offered, while allowing that that was a morning quote and he had not seen any further dealings in the issue.

Those bonds priced Monday at 98.536 to yield 7 7/8%, but it was all downhill after that, as they quickly fell below issue in initial aftermarket dealings and never recovered.

Overall market lower

A trader said that Wednesday's high-yield market "seemed mostly new-deal focused, especially towards the end of the day."

Away from the new issues, another characterized Wednesday as "a boring day for me."

A soggy equity market continued to overhang the whole risk-asset sphere, with Wall Street finishing lower for a second consecutive day and fifth session out of the last six, amid continued investor angst about the potentially deteriorating European debt situation in the wake of new anti-austerity governments taking over in France and Greece.

While stocks did manage to cut their losses late in the day on the news that Greece had received its latest bailout payment from its fellow European Union members, the bellwether Dow Jones Industrial Average was off for a sixth consecutive day, losing 97.03 points, or 0.75%, to close at 12,835.06. The broader Standard & Poor's 500 and Nasdaq composite indices were each lower for a second straight day

Junk measures retreat

Back in the junk world, statistical measures of market performance fell for a second consecutive session on Wednesday, after four straight sessions in which they had been mixed.

A trader saw the Markit Group CDX North American Series 18 High Yield Index down for a fifth straight day, dropping by ¾ point Wednesday to end at 94¾ bid, 95 offered, after having lost ¼ point over each of the previous two sessions.

The KDP High Yield Daily Index meanwhile turned downward for a third straight day on Wednesday, easing by 1 basis point to close at 74.12, after having lost 7 bps on Tuesday. Its yield, though, came in by 1 bp on Wednesday, to 6.41%, after having risen by 3 bps on Tuesday.

The widely followed Merrill Lynch U.S. High Yield Master II Index posted its second consecutive loss on Wednesday, ending the day down 0.126%, on top of Tuesday's 0.004% easing, which had snapped an upside streak of 10 consecutive sessions that dated back to April 24.

The latest loss left its year-to-date return at 6.661% Wednesday, down from Tuesday's 6.795% reading and down as well from Monday's 6.80%, the peak level for 2012 so far.

MetroPCS moves up

Among specific non-new-issue names, a trader saw MetroPCS Wireless Inc.'s 6 5/8% notes due 2020 up about 4 points on the session at 100¼ bid, 100¾ offered.

He cited market scuttlebutt - fanned by news reports - that the Dallas-based pre-paid wireless operator was in talks with Deutsche Telekom, the parent company of the Number-4 U.S. wireless carrier T-Mobile, on a possible business alliance, or even a potential outright sale of MetroPCS.

The Bloomberg news report - citing unidentified sources - said the giant European phone company is considering a stock-swap transaction that would give it control over the combined T-Mobile/MetroPCS entity, though other options are reportedly being considered.

A market source at another desk, also seeing MetroPCS up by those 4 points at 101, said that over $16 million of the bonds had traded, making it one of the busiest issues of the day in the junk world.

Metro's New York Stock Exchange-traded shares jumped by 94 cents, or 14.33%, to end at $7.40, on volume of 32.9 million shares, more than five times the usual turnover.

The first trader also saw MetroPCS sector peer Cricket Communications' 7¾% notes due 2020 up 2 to 3 points "on sympathy," ending at 92½ bid.

Cricket parent Leap Wireless International's Nasdaq-traded shares shot up by 62 cents, or 12.06%, to $5.76, on volume of 13.7 million shares, or nearly eight times the norm.

Caesars seen lower

Elsewhere, a trader said that Caesars Entertainment Corp. "was down a little bit."

He said that the Las Vegas-based gaming giant's bellwether 10% notes due 2018, issued as the old Harrah's Operating Corp., were finishing at 71 to 711/2, which he said was down about ¾ point.

PDVSA gets punished

A trader said that bonds of Venezuela's state-run oil monopoly, Petroleos de Venezuela SA, "still had a lot of activity" on Wednesday.

He said that "there was real size" in its 9% notes due 2021, with over $30 million of the bonds having traded. He saw them at 80 bid, 80½ offered, calling that down 1¼ points.

He said that PDVSA's 8½% notes due 2017 were finishing down 7/8 point at 87 bid, 87½ offered, "also on good size" of $17 million.

Its 5 3/8% bonds due 2027 traded in a 60 to 62 context and finished a point lower at 61½ bid.

Overseas Shipholding up

A trader saw Overseas Shipholding Group's 8 1/8% notes due 2018 initially "down a little bit," but by the end of the day, he said, the New York-based oil tanker operator's bonds were up about ½ point on the day at 76¾ bid, up from 76 to 76¼ during the morning.

Volume was about $6 million to $7 million.

ATP Oil & Gas off

ATP Oil & Gas Corp.'s 11 7/8% second-lien notes due 2015 were seen around 73½ bid, 74½ offered on Wednesday, after having ended Tuesday at 74 bid, 75 offered.

But a trader said that the Houston-based offshore energy exploration and production company's bonds were "just quoted today, with no volume."

ResCap rises

A trader said that Residential Capital Corp.'s 9 5/8% notes were last traded around 96 bid, 96¼ offered. He said that was up from opening levels around 94¾ bid, 95 offered,

While the bonds were being quoted up 1¾ points, he said there was not much volume" in the troubled Minneapolis-based mortgage lender's paper, with perhaps around $4 million traded.

He said that the market regards all of the speculation about whether parent Ally Financial Inc. will put its problem child into bankruptcy - or, as Ally executives insist, whether ResCap's own ostensibly independent board of directors will do so - apparently with the blessings of Ally's 74% owner, the U.S. Treasury - is "pretty much old news.

MF Global gains

A trader said that MF Global Holdings' 6¼% notes "are moving up," quoting the failed New York-based futures broker's paper around 45 bid.

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