New issues flood high-yield market; AIG bonds gain on repayment news; Clear Channel active

By Stephanie N. Rotondo

Portland, Ore., Sept. 30 - The high-yield market saw another huge influx of new issues on Thursday, and investor demand helped both the primary and secondary markets end strong.

Sears Holding Corp. brought an upsized deal to market. The deal was slated to be a $500 million issue, but was soon doubled.

West Corp. also brought a new deal and, like the Sears notes, the bonds improved about 2 points on the day.

In the secondary space, American International Group Inc. got as much as a 6-point boost following news of an accord with the U.S. government regarding the repayment of bailout funds. The company also announced the sale of two of its Japanese units to Prudential Financial Inc.

Clear Channel Communications Inc.'s debt continued to be an active credit, according to traders. However, there hasn't been any news out on the company to explain the surge in interest.

The high-yield mutual funds and exchange-traded funds saw $566 million of inflows for the week to Wednesday, according to Lipper-AMG, a market source said.

It follows the previous week's $824 million inflow and extends year-to-date inflows to $8.88 billion.

Meanwhile the primary market heard terms on staggering face amounts of issuance during the Thursday session: $3.725 billion and €1.09 billion.

Thursday's mega-burst of issuance capped the biggest month in the history of the market.

September saw junk issuers raise $37.42 billion in dollar-denominated deals. That topped the existing record month - April 2010 - during which $34.69 billion was priced.

Year-to-date issuance at Thursday's close stood at $198.82 billion and should pass $200 billion mark on Friday or early next week, according to Prospect News data.

Ardagh Glass prices

Ardagh Packaging Finance plc priced €1.09 billion and $800 million of high-yield notes in a restructured multi-currency, multi-tranche deal.

The Dublin-based container company priced downsized €825 million and $350 million tranches of seven-year senior secured notes (Ba3//) at par to yield 7 3/8%.

The yields printed on top of the price talk.

The dollar-denominated tranche was downsized by $25 million and the euro-denominated tranche was downsized by €25 million.

Ardagh also priced a downsized €275 million tranche of 10-year senior unsecured notes (B3//) at par to yield 9¼%.

The yield printed on top of price talk.

The tranche was downsized by €40 million.

In addition, Ardagh priced an upsized $450 million tranche of 10-year senior unsecured notes (B3//) at par to yield 9 1/8%.

The yield on the dollar-denominated senior unsecured notes printed at the tight end of the 9¼% area price talk.

The tranche was upsized by $140 million.

The restructuring saw an overall downsizing of the senior secured notes tranches by €25 million and $25 million amounts.

The dollar-denominated portion of the senior unsecured notes upsized by $135 million, while the euro-denominated portion was downsized by €40 million

The combined amount of euro-denominated issuance decreased by €65 million while the combined amount of dollar-denominated issuance increased by $115 million.

Citigroup was the left bookrunner. Credit Suisse and JPMorgan are the joint bookrunners.

Proceeds will be used to finance the acquisition of Impress Cooperative UA and to refinance existing debt.

Sears doubles to $1 billion

Sears Holdings doubled the size of its deal to $1 billion from $500 million and priced its issue of eight-year senior secured notes (Ba1/BB+) at par to yield 6 5/8%.

The yield printed at the tight end of the 6¾% area price talk.

Bank of America Merrill Lynch, Wells Fargo Securities, Barclays Capital Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co. and Citigroup Global Markets Inc. were the joint bookrunners.

The Hoffman Estates, Ill.-based retail merchandise company intends to use the proceeds to repay revolver debt, to fund working capital requirements of the retail business, to fund capital expenditures and for general corporate purposes, including common share repurchases and pension funding obligations.

Nielsen massively upsizes

The Nielsen Co. BV priced a massively upsized $750 million issue of 7¾% eight-year senior notes (Caa1/B) at 99.267 to yield 7 7/8%.

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

Deutsche Bank Securities, Credit Suisse, Goldman Sachs & Co., J.P. Morgan Securities LLC and Morgan Stanley were the joint bookrunners for the quick-to-market deal which was upsized from $500 million.

Proceeds will be used to redeem a portion of Nielsen's $869 million of 10% senior notes due 2014 and related obligations.

West prices through talk

West Corp. priced a $500 million issue of eight-year senior notes (B3/B) at par to yield 8 5/8%, 12.5 basis points inside the 8¾% to 9% price talk.

Deutsche Bank Securities Inc., Wells Fargo Securities, Goldman, Sachs & Co. and Morgan Stanley & Co. Inc. were joint bookrunners.

Proceeds will be used to repay bank debt.

Seadrill $350 million atop talk

Norway's Seadrill Ltd. priced a $350 million issue of five-year bonds at par to yield 6½%.

The deal priced on top of price talk.

Carnegie ASA and Pareto Securities AS were the managers.

The deal size came toward the higher end of the previously announced $200 million to $400 million range.

Proceeds will be used for general corporate purposes.

Affinion $325 million

Affinion Group Holdings, Inc. priced a $325 million issue of 11 5/8% five-year senior notes (Caal/B-) at 98.55 to yield 12%, on top of price talk.

Deutsche Bank Securities, Bank of America Merrill Lynch and Credit Suisse are the joint bookrunners for the debt refinancing and general corporate purposes deal.

Talking the deals

BreitBurn Energy Partners LP and Breitburn Finance Corp. upsized their offering of 10-year senior notes to $350 million from $250 million, and set price talk at 9% area on Thursday.

The deal is expected to price on Friday.

Barclays Capital, Wells Fargo Securities, BMO Nesbitt Burns and RBC Capital Markets are joint bookrunners.

Meanwhile, German container shipping firm Hapag-Lloyd AG provided details and price talk on its multi-currency offering of five-year senior notes (B3/B/).

The deal is expected to include €250 million to €300 million of euro-denominated notes, talked with a 9¼% area yield, and $250 million to $300 million of dollar-denominated notes, talked with a 9¾% to 10% yield.

Deutsche Bank, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan and UniCredit are managing the transaction.

And AWAS Aviation Capital Ltd. talked its split-rated $600 million offering of six-year senior secured notes (Ba2/BBB-) with a 6¾% to 7% yield.

The books close at 10 a.m. ET on Friday, and the notes are expected to price thereafter.

Goldman Sachs is the left active bookrunner. Morgan Stanley is the joint active bookrunner. Deutsche Bank Securities the passive bookrunner.

Navios starts Friday

The forward calendar continued to grow, on Friday.

Navios Maritime Acquisition Corp. and Navios Acquisition Finance (US) Inc. will begin a roadshow on Friday for the $375 million offering of seven-year first-priority ship mortgage notes (expected ratings B2/B).

The deal is expected to price during the week ahead.

Bank of America Merrill Lynch and J.P. Morgan Securities LLC are the joint bookrunners for the debt refinancing.

Alta Mesa roadshow

Elsewhere, Alta Mesa Holdings, LP kicked off a $300 million offering of eight-year senior notes on Thursday.

The company plans to host an investor call on Monday. The deal is expected to price late in the week ahead.

Wells Fargo Securities and Citigroup are the joint bookrunners.

Proceeds will be used to repay the company's second-lien term loan, pay down its revolver, make a distribution to Alta Mesa Investment Holdings, Inc. and for general corporate purposes.

Brickman launches $300 million

Brickman Group Holdings, Inc. plans to sell $300 million of eight-year senior notes (B3/CCC+).

That deal is also expected to price late in the week ahead.

Bank of America Merrill Lynch and Barclays Capital are the joint bookrunners.

Proceeds, along with proceeds from a new credit facility, will be used to redeem the company's outstanding senior subordinated notes and to make a cash distribution to the equity holders.

Market indicators remain higher

New issue activity helped the high-yield bond market gain ground, even while the equity markets declined.

The KDP Daily High Yield index widened 4 basis points to 73.10 as yield came in to 7.68% from 7.71%.

The CDX North American HY Series 14 index meantime gained about an eighth of a point, closing at 97 3/8 bid, 97 5/8 offered.

"It was another strong day," a trader said.

AIG gains on repayment news

American International Group's bonds gained anywhere from 1 to 6 points on the day following news the company had reached a deal with U.S. regulators to repay the bailout funds received in 2008.

A trader called the 8.175% notes due 2058 - the "most active" of the issues - up "almost 3 points" to par 1/8. The 8¼% notes due 2018 improved by 1½ points, closing around 117, while the 6¼% notes due 2037 jumped 5 to 6 points to 86.

Another trader said there was a lot of trading in hybrid issues, such as the 8.175% notes. He saw about $100 million of that paper change hands, also at par 1/8. He also saw the 5.45% notes due 2017 ending around 103.

"About $400 million or more probably traded of assorted AIG issues," he said.

Under the repayment deal, the U.S. Treasury will convert its $49.1 billion preferred stake into 1.66 billion common shares and then sell them on the open market.

The New York-based insurance giant also said on Wednesday that it intended to sell bonds for the first time since it received the bailout funds two years ago.

Additionally, AIG announced it had agreed to sell two of its Japanese units - AIG Star Life Insurance Co. and AIG Edison Life Insurance Co. - to Prudential Financial Inc. for $4.8 billion.

Prudential will pay $4.2 billion in cash and assume $600 million in debt.

Elsewhere in the financial sphere, First Data Corp.'s 9 7/8% notes due 2015 were "active," a trader said, but unchanged around 811/2.

iStar Financial Inc.'s bonds, however, moved up with the market, the 5.85% notes due 2017 at 76 and the 5 1/8% notes due 2011 around 93.

Clear Channel active, mostly better

There hasn't been any news out on Clear Channel Communications this week, but the bonds have seen good trading volume over the course of the week and Thursday was no different.

Several traders called the 11% notes due 2016 up a point to 761/2.

"They have been extremely active," a trader said. "All of CCU paper is up a point, with some $50 million to $60 million of assorted issues trading."

Another trader also saw the 10¾% notes due 2016 at 773/4, which he deemed unchanged. The 9¼% notes due 2017 were up over a point to 1063/4.

Clear Channel is a San Antonio-based multimedia company.

Broad market firms

In the rest of the marketplace, Harrah's Entertainment Inc.'s 10% notes due 2018 closed unchanged at 791/2, according to a trader.

The trader also saw Solo Cup Co.'s 8½% notes due 2014 inching up half a point to around 86.

At another desk, a trader said Rite Aid Corp.'s 9 3/8% notes due 2015 were "staying real active," gaining almost a point to 86 bid, 86¼ offered.

The trader also saw "a lot" of Ineos Group paper turn over, the 8½% notes due 2016 at 85½ bid, 86 offered and the 9% notes due 2015 at 104 bid, 104½ offered.

In the autosphere, General Motors Corp.'s 8 3/8% notes due 2033 were unchanged at 33¾ bid, 34¾ offered. Ford Motor Co.'s 7.45% notes due 2031 gained a point, closing at 104¼ bid, 105¼ offered.

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