Upsized Sirius, Huntsman price, Amsted also, Sitel sets talk; SuperValu mixed on buyout buzz

By Paul Deckelman and Paul A. Harris

New York, March 12 - Sirius XM Radio Inc. came to market late Friday with a sharply upsized offering of five-year notes that put the cap on a rousing week which saw some $8 billion of new high-yield paper priced. The New York-based satellite broadcaster's big drive-by deal priced too late for aftermarket activity.

Earlier in the session, Salt Lake City-based chemical company Huntsman International LLC upsized its offering of 10-year senior subordinated notes, which priced at par and then moved up when they were freed for secondary dealings.

Also pricing was Amsted Industries Inc.'s $500 million issue of eight-year notes. The Chicago-based diversified industrial manufacturer's deal firmed in the secondary arena.

Apart from the issues which actually priced, primary players heard price talk on Sitel Corp.'s $300 million eight-year note offering. The Nashville-based business outsourcing services provider's deal is seen likely to price on Monday after the order books are closed.

Syndicate sources also heard bankrupt Houston-based Lyondell Chemical Co. plans to sell $2.25 billion of 7.5-year dollar- and euro-denominated secured notes as part of a larger exit financing package, with pricing expected toward the end of the month.

Away from the new-deal names, market scuttlebutt envisioning a possible leveraged buyout for SuperValu Inc. sent the second-largest U.S. supermarket operator's stock up, but the Eden Prairie, Minn.-based company's bonds were seen mixed on the speculation.

The market was seen firm overall, with major statistical indexes of secondary performance ending the week ahead of where they had been the previous Friday.

Sirius massively upsized

Three issuers, each bringing a single tranche of notes, combined to price $1.65 billion during the final session of the busy second week of March.

In a Friday drive-by, Sirius XM Radio Inc. priced an upsized $800 million issue of non-callable five-year senior notes (Caa2/B-) at par to yield 8¾%.

The yield printed at the tight end of the 8¾% to 9% price talk.

JP Morgan ran the books for the quick-to-market deal, which was upsized from $550 million.

Proceeds will be used to fund a call of the New York-based satellite radio company's 9 5/8% notes due 2013.

Amsted prices atop talk

Meanwhile, Amsted Industries Inc. priced a $500 million issue of 8 1/8% eight-year senior notes (B1/BB-) at 99.28 to yield 8¼%.

The yield printed on top of the price talk.

Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and Wells Fargo Securities were the joint bookrunners.

Proceeds will be used to repay and retire all amounts outstanding under the company's term loan and to reduce borrowings under its accounts receivable securitization program.

Huntsman plays to $2 billion book

Finally, Huntsman International LLC priced an upsized $350 million issue of 10-year senior subordinated notes (Ba3/CCC+) at par to yield 8 5/8%, on Friday.

The yield printed at the tight end of the 8¾% area price talk. The amount was increased from $250 million.

Goldman Sachs & Co. was the left bookrunner. JP Morgan, Bank of America Merrill Lynch, Barclays Capital, Citigroup and Credit Suisse were joint bookrunners.

Proceeds from the issue will be used to repurchase some of the company's outstanding senior subordinated notes.

The deal size grew in proportion to a concurrent tender offer, according to a hedge fund manager.

Orders for the new Huntsman 8 5/8% bonds due in 2020 ran to $2 billion, according to a high-yield mutual fund manager who played the deal.

The bonds rallied on the break, the buy-sider added, specifying that the par-pricing paper ran all the way to 102½ bid.

However the bonds subsequently retreated to 100½ bid, 101 offered, the source said, chalking up the retreat to typical Friday illiquidity, and perhaps a few shallow pockets that might tempt a body- seeing big demand for the paper - to flip the deal.

Lyondell to roadshow $2.25 billion Monday

The calendar saw a spectacular build-out on Friday as Lyondell Chemical Co. announced it will begin a roadshow on Monday for $2.25 billion equivalent of 7.5-year senior notes.

The Netherlands-based chemical company plans to issue in dollars and euros. The tranche sizes remain to be determined.

Pricing is set for late in the week of March 22.

Bank of America Merrill Lynch, UBS Investment Bank, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan, Morgan Stanley and Wells Fargo Securities are joint bookrunners.

Proceeds, along with a new $2.75 billion senior secured term loan and other funding sources, will be used to finance the company's emergence from bankruptcy.

Sitel sets price talk

Elsewhere, Sitel Corp. talked its $300 million offering of eight-year senior unsecured notes (Caa2/B-) to yield 11¾% to 12%.

The order books close on Monday, with the deal expected to price after that.

Goldman Sachs & Co., Bank of America Merrill Lynch and Credit Suisse are joint bookrunners for the debt refinancing.

In addition to Sitel, BioScrip Inc. is expected to price $225 million of 5.5-year senior notes (B3/B-) via Jefferies & Co. during the week ahead.

Nationstar Mortgage LLC is in the market with a $250 million offering of five-year senior notes (expected ratings B2/B), via Barclays Capital, Bank of America Merrill Lynch, Deutsche Bank Securities and RBS Securities. That deal also is expected to price during the week ahead.

Finally Terphane, Inc. begins a roadshow on Monday for a $90 million offering of secured notes due 2017 via PrinceRidge Group.

New Huntsman bonds move higher

When Huntsman's new 8 5/8% senior subordinated notes due 2020 were freed for secondary dealings, a trader saw those bonds at 100½ bid, 100¾ offered.

Another estimated the bonds at 100¾ bid, 101¼ offered, while a third saw them at 101 bid, 101½ offered - both levels well up from par, where the upsized $350 million issue had priced earlier in the day.

Amsted issue improves

A trader said that Amsted Industries' $500 million offering of 8 1/8% notes due 2018 were going home at 99¼ bid, 99¾ offered, versus the 99.28 level at which the bonds had priced.

Another saw them at par bid to 100½ offered.

Yet another trader said that although the new issues which have come this week have generally been well-received and have firmed in the secondary, "some of the deals have met a little bit of resistance, for the first time in a while."

He singled out the Amsted deal, for instance, saying that "there was a little bit of resistance - a lot of the major accounts didn't play it." He continued that some of these accounts "that know the credit felt that it was priced a little too tight for them."

He said that after the issue had priced, "they traded down into a 99½ bid, left them at 991/2-993/4."

Week's deals hang in there

A trader said that "all of the [recent] new issues kind of held their gains."

For instance, Cincinnati Bell Inc.'s $625 million of new 8¾% senior subordinated notes due 2015 were being quoted at 100½ bid, 100¾ offered. That was about in line with where the Ohio-based telecommunications company's bonds had firmed to after their pricing on Wednesday, when the issue - upsized from the originally announced $400 million - came to market 98/598 to yield 9%.

A trader saw Parker Drilling Co.'s $300 million of 9 1/8% notes due 2018 trading at 102 1/8. That was off slightly from the Houston-based energy drilling company's highs of 102½ bid, 102¾ offered seen Thursday after the new bonds were freed for secondary dealings, but "they were still well-received" and were trading well above Thursday's par issue price.

Going back a little further, Appleton Paper Inc.'s 10½% senior secured notes offering - which priced at 98.035 on Jan. 29, only to then proceed to slide badly, down to under 90 bid, were seen by a trader having rebounded to 98¾ bid, 99¼ offered, "now well above issue price."

A second trader also noted the sharp rebound in the Appleton, Wis.-based coated paper company's recent bond issue over the past several weeks, saying he was "happy to see that it's recovered." He attributed the comeback to the company's recently released quarterly earnings data, which was 'about what was expected - some people were afraid it would be worse," but it wasn't.

Overall, a trader pronounced that "new issues do rule the day. It is pretty amazing how much paper is coming to market" - but he added that "that's what the treasurers of these companies are supposed to do, with rates where they are. They're supposed to raise all the money they can, to grow the business."

Market indicators add to gains

Among bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up 1/8 point to 99½ bid, 99¾ offered on Friday, after having been unchanged on Thursday. The index thus finishes out the week ½ point better than the 99 bid, 99¼ offered level at which it had closed out the previous week ended Friday, March 5.

The KDP High Yield Daily Index meanwhile pushed upward by 7 basis points on Friday to finish at 71.81, after having lost 9 bps on Thursday. Its yield tightened by 5 bps on Friday to 7.91%, after having widened by that same amount on Thursday. The index thus improved from the previous week's close at 71.33, and its 8.06% yield.

Another widely followed junk market measure, the Merrill Lynch High Yield Master II index, closed on Friday showing a year-to-date gain of 3.775% - a new peak level for 2010 - continuing the trend seen last week, which closed out with the index having risen solidly to a 2.811% gain. Since bottoming in mid-February, the index has bounced steadily back from its low point of the year, a loss of 0.357% recorded on Thursday, Feb. 11.

As of the Friday close, the index's yield to worst had narrowed to 8.552% from the previous week's 8.755%, while its spread to worst tightened to 624 bps from 646 bps the previous Friday.

Advancing issues topped decliners for an 11th straight session on Friday by about a better than seven-to-six margin.

Overall activity, measured by dollar-volume levels, was up about 4% from Thursday's pace.

A trader who mostly watches distressed names opined that "a lot of this stuff has moved up, so my world has gotten really quiet."

A second said that the market is "unbelievably firm," with the special emphasis on the new issue sphere.

Another trader called the day's action "pretty strong," but noted the heavy influence of aftermarket dealing in new junk issues. He also noted the impact of the beginning of "March Madness" - the college basketball championship season - pointing out that one of the factors making for relatively lighter than expected volume was "people watching the NCAA playoffs. A lot of people seemed to start their weekends early."

First Data steady but again busy

A trader said that First Data Corp.'s bonds were again pretty active, following the multiple-point slide which the Atlanta-based electronic transaction processing company's bonds saw on Thursday after the company released quarterly numbers that were below some expectations, as well as announcing the imminent exit of its chief executive officer, Michael Capellas.

He said that there was 'a lot of volume" in the company's 9 7/8% bonds due 2015, which ended at 87½ bid, 88½ offered. "That was about where they ended up [Thursday] - but there was good volume on those," he said. On Thursday those bonds had dipped nearly 4 points to under the 88 bid level, in fairly active dealings.

The trader saw First Data's 10.55% notes due 2015 - which had plummeted some 7 points on Thursday, amid trading of over $60 million - once again busy, although not at such inflated volume. He said that the bonds did have "a lot of activity" in ending around 85½ bid, 86 offered, which he characterized as "virtually unchanged - but on a lot of volume."

"Big issues" - the 10.55s have over $3 billion outstanding - "equal a lot of volume," he said.

The trader also saw its 11¼% notes due 2014 around 81 bid, 82 offered, unchanged from Thursday, though on "not much trading." On Thursday, those bonds had fallen more than 2 points to just under the 82 level, with over $20 million traded.

The company's bonds had gotten hammered on Thursday, investors hit with the one-two punch of CEO Capellas planning to leave that post at the end of the month to take a position with First Data's owner, Kohlberg Kravis Roberts & Co., combined with the disappointing earnings. While net losses for the fourth quarter were $338 million - a considerable improvement from the year-earlier red ink of $3.2 billion, which included a more than $3 billion writedown - its adjusted EBITDA fell to $530 million from $645 million in the 2008 quarter.

SuperValu bonds seen mixed

Market rumors - strictly unofficial and unconfirmed - that supermarket giant SuperValu might become the target of a leveraged buyout effort had a mixed impact on the company's bonds.

A market source saw brisk round-lot volume of over $16 million in its 7½% notes due 2012 which were seen having firmed some 5/8 point to a full point, at about the 106 level.

However, the source noted that its 7½% notes due 2014 were about unchanged to a point lower on the day, on considerably less volume, while its 8% notes due 2016 was likewise little moved, with just a couple of trades to show for it.

Financials hang in

A trader said that MBIA Inc.'s bonds "keep moving up," pegging the Armonk, N.Y.-based bond insurer's 14% surplus notes due 2033 at 67 bid, which he said was up around 2 or 3 points on the session, on "good volume." The bonds traded on Friday in a 66-68 range.

The company's bonds have been steadily rising since the beginning of March, when it reported a considerably smaller fourth-quarter loss than a year ago, and posted a profit for the full 2009 year, versus a big loss the year before. The 14% notes in particular, had appreciated nearly 20 points in that time, rising from the upper 40s pre-numbers to current levels.

He said that "they're still paying [interest], and it is tough to find yield," in trying to explain the continued strength in the bonds, even nearly two weeks after the company reported.

He also opined that "people are thinking that even if the lawsuit [the company is embroiled in] doesn't work out like they think, it's still worth taking a shot, I guess. MBIA - which lost heavily during the 2008-2009 meltdown in the financial markets - is working on a previously announced strategy to split off its still-valuable municipal bond insurance business into a new unit in order to rebuild that business - but banks which bought insurance from MBIA for mortgage securities are suing the insurer for trying to ring-fence the muni business, claiming it could leave the company with fewer resources to pay its obligations on structured securities.

Also among the financials, he saw Radian Group Inc.'s bonds continuing to improve, quoting the Philadelphia-based mortgage and municipal bond insurer's 5 3/8% notes due 2015 up 4 points to around the 70-72 level on "decent sized trading," while seeing its 5 5/8% notes due 2013 and its 7¾% notes due 2011 "quoted unchanged to higher, but with no real activity." He saw the 2013 bonds around 81-83 and the 2011 bonds at 96-97, both unchanged. "The long ones were trading and were up 4 points."

He noted that the stock was little changed on the day, ending at $11.56, and "people are comfortable with the stock being in the $11s, and the yield that's attached to them. I guess."

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