NII, SandRidge, Pinnacle, Cascades price; market awaits American Axle, Wind, Primus; Ford up

By Paul Deckelman and Paul A. Harris

New York, Dec. 9 - The crowed high-yield primary calendar remained well-populated on Wednesday, even though four deals totaling some $1.5 billion face amount priced, since two of them - for NII Capital Corp. and for Cascades Inc. - were actually opportunistically timed drive-by offerings which were announced early in the day and then priced some hours afterward.

The other two deals which priced - for SandRidge Energy, Inc. and for Pinnacle Foods Finance LLC - actually did come off the calendar, only to have the spots which they vacated taken over by two other prospective new deals which emerged, for GXS Worldwide Inc. and Edgen Murray Corp.

Some calendar slimming might be seen on Thursday, with the primary sphere anticipating pricings from Wind Acquisition Holdings Finance SA, American Axle & Manufacturing Inc. and Primus Telecommunications Holding, Inc.

When the new Pinnacle Foods issue was freed for secondary dealings, the new bonds were heard to have moved up nearly 2 points. The Sand Ridge and Cascades issues were seen having firmed modestly from their respective issue prices, while the NII Capital offering came to market too late in the session for any kind of aftermarket.

Ford Motor Credit Co.'s $1 billion issue of 10-year bonds, which had priced Monday and then struggled in the secondary market, was seen by traders to have - finally - managed to move above its issue price and actually stay there.

Away from trading in the new or recently-priced issues, a trader noted a solid rise, "out of the blue," in the bonds of Houston-based oilfield services company Allis-Chalmers Energy, Inc. over the past several sessions. The timing of the move coincides with a recent investor presentation by company executives to investors, during which they outlined recent improvements in its debt position and its overall finances.

NII sells $500 million drive-by

The primary market continued to operate at a feverish pace on Wednesday, with issuers and dealers pushing to price deals before the year comes to a close.

Four issuers, each one bringing a single tranche of notes, combined to price a face amount of $1.5 billion.

NII Capital, formerly Nextel International, priced a $500 million issue of 8 7/8% 10-year senior unsecured notes (B1/BB-) at 99.187 to yield 9%.

They yield printed in the middle of the 8¾% to 9% talk. The issue price came slightly rich relative to the approximately 1 point of discount talk.

Morgan Stanley, Credit Suisse, Deutsche Bank Securities and Goldman Sachs & Co. ran the books for the quick-to-market deal.

Proceeds will be used for general corporate purposes, which may include expansion of the Reston, Va.-based telecommunications company's existing network, either through capital expenditures for internal expansion or acquisitions of other operators.

SandRidge upsizes

SandRidge Energy priced an upsized $450 million issue of 8¾% 10-year senior notes (B3/B+) at 98.349 to yield 9%.

The notes were talked to yield 9%, and to price at a slight discount.

Bank of America Merrill Lynch, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc., Mitsubishi and RBC Capital Markets Corp. were joint bookrunners.

Proceeds will be used to help finance the acquisition of oil and gas properties in the Permian Basin from Forest Oil Corp. and one of its subsidiaries.

Pinnacle comes at rich end

Meanwhile, Pinnacle Foods Finance LLC and Pinnacle Foods Finance Corp. priced a $300 million add-on to their 9¼% senior notes due April 1, 2015 at par.

The deal priced at the rich end of the 99 to 100 price talk.

Credit Suisse Securities, Barclays Capital Inc., Bank of America Merrill Lynch, HSBC and Macquarie Capital were joint bookrunners.

Moody's Investors Service is expected to leave its current Caa2 rating of the notes in place. Standard & Poor's is expected to raise the ratings of the notes to CCC+ from the current CCC.

Proceeds will be used to help finance the $1.3 billion acquisition of Birds Eye Foods Inc.

The original $325 million priced at par in March 2007.

The par-pricing notes were at 102 bid, 102¼ offered shortly after the deal terms rolled out, according to a high-yield mutual fund manager.

Cascades prices $250 million

In other drive-by action, Cascades priced a $250 million issue of 7 7/8% 10-year senior notes (Ba3/B+) at 98.293 to yield 8 1/8% on Wednesday.

The yield priced on top of yield talk. The issue price came in line with discount talk of 1 to 2 points.

Bank of America Merrill Lynch ran the books.

Proceeds will be used for general corporate purposes which may include the repayment of bonds maturing in 2013.

Talking the deals

In addition to the four deals that cleared the market, the stage was set for a busy Thursday session.

National Money Mart Co., a Canadian subsidiary of Dollar Financial Corp., talked its $350 million offering of seven-year senior notes at the 10½% area.

The notes are expected to come at a discount of approximately 1 to 2 points.

Credit Suisse and Wells Fargo Securities are joint bookrunners for the deal, which is expected to price Thursday.

Primus Telecommunications talked its $130 million offering of seven-year senior secured notes to yield in the 13% area, including approximately 1.5 points of original issue discount.

The books close at 3 p.m. ET on Thursday, and the notes are set to price shortly after.

The notes will be issued in the form of 130,000 units. Each unit will be comprised of $653.85 of Primus Telecommunications Holding, Inc. notes (confirmed Caa1/expected B) and $346.15 of Primus Telecommunications Canada, Inc. notes (confirmed B3/expected B).

Jefferies & Co. and UBS Investment Bank are joint bookrunners for the debt refinancing.

A buy-side source said that covenant changes, including a 50% cash flow sweep covenant and a modified leverage test covenant, have been introduced.

Meanwhile, Bumble Bee Foods, LLC/Connors Bros. Cloverleaf Seafoods Co. and Bumble Bee Capital Corp. set price talk for their $220 million of senior secured notes due 2015 (B2/B+) at 8% to 8¼%.

The notes are expected to price on Thursday morning, with an original issue discount of about 1 point.

Books for the debt refinancing deal are being run by Wells Fargo Securities, LLC and Jefferies & Co. Inc.

And Wind Acquisition Holdings Finance SA talked its €500 million equivalent offering of 7.5-year senior payment-in-kind notes (//B) to price at a discount, with an all-in yield of 12½%.

The notes, which are being sold in euro and dollar denominations, are expected to be priced on Thursday, shortly after the European close.

The notes will pay PIK interest until Jan. 15, 2014, after which interest payments are to be made in cash.

Morgan Stanley, Banca IMI, Calyon Securities, Citigroup, JPMorgan and Natixis Bleichroeder are leading the Italian telecom's cash distribution-funding deal.

Edgen Murray starts roadshow

Also on Wednesday, two more deals came aboard a packed forward calendar.

Edgen Murray Corp. began a roadshow on Wednesday for its $465 million offering of seven-year senior secured first-lien notes.

The roadshow wraps up on Tuesday, with the notes expected to price on the same day.

JP Morgan and Jefferies & Co. are joint bookrunners for the debt refinancing.

GXS brings $750 million

Elsewhere GXS Worldwide, Inc. will start a roadshow on Thursday for its $750 million offering of 5.5-year senior secured notes.

Barclays Capital, JP Morgan, Citigroup and Wells Fargo Securities are joint bookrunners.

Proceeds will be used to repay bank debt, as well as for general corporate purposes. Proceeds will also be used to fund the cash portion of the merger with Inovis and to refinance Inovis debt.

Pinnacle paper pops up

When the new Pinnacle Foods add-on to its 9¼% senior notes due 2015 was freed for secondary dealings, a trader saw the bonds move up to a closing level at 101¾ bid, 102¼ offered, and said that the issue had actually gotten as good as 102 "a couple of times."

That was well up from par, where the Cherry Hill, N.J.-based branded packaged foods company's $300 million issue had priced earlier in the session, giving investors who bought the bonds "a nice, quick 2% profit on the day," he said.

Cascades, SandRidge rise in aftermarket

A trader saw Cascades' new 7 7/8% notes due 2020 at 98½ bid, 99 offered, up modestly from the 98.293 level at which the Kingsley Falls, Ont.-based paper, packaging and wood products company's $250 million issue had priced earlier to yield 8 1/8%.

He also saw Oklahoma City-based oil and gas exploration and production operator Sand Ridge Energy's new 8¾% notes due 2020 rising to 98¾ bid, 99¼ offered. That was up from the 98.349 level at which the company's $450 million issue - upsized from the originally announced $400 million - priced.

The new NII Capital Corp.8 7/8% notes due 2019 appeared too late in the session for any kind of aftermarket.

Ford Credit comes out of its rut

One of the major developments of the session, traders said, was Ford Motor Credit Co.'s new $1 billion of 8 1/8% notes due 2020 finally manage to trade above their issue price - something they had been unable to do previously, ever since the mega-deal priced on Monday.

A trader noted that the bonds had "moved higher during the session" after two days under water, quoting them at 98 3/8 bid, 98 5/8 offered.

The Dearborn, Mich.-based automotive financing arm of Number-Two U.S. carmaker Ford Motor Co. had priced those bonds on Monday at 98.304, to yield 8 3/8%.

Ford Credit's existing 7.8% notes due 2012 were meantime seen by a market source up more than a point on the session at 101 1/8 bid, while the company's 9.98% bonds due 2047 were firmer at just under 92.

Parent Ford's 7.45% bonds due 2031 were seen by a trader unchanged on the session, at 86½ bid, 88½ offered, while Ford domestic arch-rival General Motors Corp.'s benchmark 8 3/8% bonds due 2033 gained ¼ point to close at 23½ bid, 24½ offered.

Hanesbrands enjoys handsome gains

A market source saw Hanesbrands Inc.'s recently priced issue of 8% notes due 2016 continuing to firm smartly on Wednesday, quoting them as having risen to 102½ bid - up from the 100¾ bid, 100 7/8 offered area where the bonds had finished Tuesday.

Wednesday's price was up even further from the 98.686 level at which Hanes, a Winston-Salem, N.C.-based maker of popular brands of underwear and hosiery for men, women and children, had priced its $500 million issue last Thursday at to yield 8¼%.

The new bonds pushed up above the par level later that same session, and have hovered above par ever since.

Recent Clearwire climbs

Among other recently priced new issues, a trader saw Clearwire Communications LLC's 12% senior secured notes due 2015 "a little active late this afternoon," seeing both the company's "new issue" and its "old issue" - relative terms, since both tranches of those bonds priced within a few days of one another back in late November - trading inside of a par to 100½ context.

That was up from the levels at which both tranches of the Kirkland, Wash.-based wireless broadband services provider had priced and subsequently traded.

Clearwire initially priced its original $1.6 billion tranche of the bonds - upsized from the $1.45 billion previously shopped around to investors - at 97.921 on Nov. 18 to yield 12½%, and those bonds had actually traded up to near-par levels before coming down on the news, less than a week later, that it would return to the junk new-issue market to sell another offering of the 12% secured bonds. The $920 million issue - radically upsized from the originally advertised $540 million - priced at 97.945 on Nov. 24 to also yield 12½%. The latter bonds then firmed to around the 98-98½ neighborhood, traders said, with the slightly "older" issue hanging in about ½ point higher.

Market indicators steady-to-firmer

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index essentially unchanged for a second consecutive session Wednesday at 95 1/8 bid, 95 5/8 offered, offered , after having been also unchanged on Tuesday.

But the KDP High Yield Daily Index meanwhile rose by 10 basis points on Wednesday to 70.34, after having gained 1 bp on Tuesday. Its yield narrowed by 1 bp to 8.35%, after having come in by 5 bps the previous session.

In the broader market, advancing issues again led decliners, for a seventh straight session, by a better than seven-to-six margin.

Overall market activity, as measured by dollar-volume, fell some 10% from Tuesday's pace.

A trader noted characterized Wednesday's market as "sort of quiet," away from the new-deal activity.

Another noted that "towards the end, things got a little busy," especially as some of the new issues priced in fairly quick succession.

Allis-Chalmers trading like a champ

A trader saw Allis-Chalmers Energy's 8½% bonds due 2017 having risen "about 10 points on the week," quoting the bonds as having traded as high as 86½ bid, before they "drifted down" later in the session to go home at 841/2. That was about the same level they had finished at on Tuesday - but he said that "a lot of the marching up took place [Tuesday] and today."

The bonds, he said, "have risen out of the blue" to reach current levels - less than a week earlier, on Dec. 1, for instance, he saw them trading at 72½ bid and as recently as Monday they had only advanced as far as 761/4, before taking off on Tuesday and pretty much holding those gains on Wednesday.

He saw no fresh news out on the company that might explain the jump, although he noted that company executives were scheduled to make a presentation Wednesday at a Wells Fargo Securities energy conference.

That presentation likely involved a reiteration of their statements made on an investor webcast which the company held on Dec. 3 - during which they touted, among other things, the progress which the company has made in bringing down its debt.

An equity rights offering in June and the sale of new 7% convertible preferred securities to investor Lime Rock Partners generated $125.6 million of total proceeds, which allowed the company to reduce its debt burden by $111.3 million - the purchase of $74.8 million of its 8½% notes and 9% notes due 2014, and the repayment of all $36.5 million of its outstanding borrowings under its revolving credit agreement.

That left the company with $224.4 million of the 9% notes as of the end of the third quarter on Sept. 30, down from $255 million at the beginning of the year, and $205.8 million of the 81/2s, down from $250 million when the year opened. Total net debt fell to $453.9 million at Sept. 30 from $586.8 million at the beginning of the year, and the ratio of net debt as a percentage of total capitalization fell to 48% from 60% previously.

Besides whatever impact last week's presentation and its presentation Wednesday at Wells Fargo might have, the trader suggested that another catalyst behind the bonds' move might be speculation about a possible new deal, since the bonds of other companies have also recently risen on speculation or news that those companies were doing a bond deal in order to enhance their liquidity at a comparatively cheap cost and to take out near-term maturities.

"I wouldn't be surprised if in a couple of days, we hear that they're doing a new deal," he said - especially since the company already recently [Nov. 9] filed a shelf registration with the Securities and Exchange Commission allowing for the issuance of up to $1.5 billion of common stock, preferred stock, senior and subordinated debt securities, guarantees, warrants, rights and units.

Smithfield gains ahead of numbers

Elsewhere, Smithfield Foods Inc.'s 7¾% notes due 2017 were seen having risen more than 4 points on the day to 89 bid, a market source said.

That rise came on the eve of the Smithfield, Va.-based hog and pork producer's scheduled release Thursday of its fiscal second-quarter earnings. Analysts believe that they will show an improvement over the net loss of $107.7 million seen in the fiscal first quarter, citing a perceived improvement in hog production profitability as well as somewhat of an easing of swine-flu virus fears that sent sales sliding in the previous quarter.

Aventine advances again

A trader saw continued upside movement in Aventine Renewable Energy Inc.'s 10% notes due 2017 - which he said had been "a huge mover" on Tuesday, leaping some 18½ points to 90½ bid from prior levels in the lower 70s on the news that the Pekin, Ill.-based ethanol producer had finally filed its plan of reorganization with the U.S. Bankruptcy Court in Wilmington, Del., after having been granted two extensions of its exclusivity period by the court since its original Chapter 11 filing in April.

In Wednesday's dealings, the trader saw the bonds firm more than 5 points on a round-lot basis, hitting a high of 96 bid after several mid-afternoon $1 million trades, although he also saw a couple of small late trades - "just four bonds [i.e. $4,000 worth]" leaving them at 88 bid at the close

A second trader heard the Aventine bonds having started the day quoted at 81-83, but then agreed that the bonds had pushed up to about the 95-96 level late in the session, "up more than 10 points," although he said that only "one or two trades" were responsible for the movement.

According to the disclosure statement which the company filed with the court on Friday, along with its actual plan, Aventine will issue $105 million in notes on the effective date of the plan, with the proceeds to be used to fund distributions and post-emergence working capital needs. Aventine said in the document that the holders of about 70% of its pre-bankruptcy unsecured notes have agreed to purchase up to $105 million of the new senior secured notes, which will have a coupon of either 13%, payable in cash, or 15% if the company elects to pay the interest in kind through the issuance of new notes.

Quirky Qwest issue raises some questions

A trader noted a sharp fall seen in Tuesday's session in a bond issued back in 1990 by a Denver-based local telecommunications carrier company then known as Mountain States Telephone & Telegraph Co., which was later absorbed by USWest, which in turn was eventually swallowed up by Qwest Communications International Inc.

Those 7 3/8% bonds due 2030 were seen having slid nearly 24 points on Tuesday to the 77¼ level from prior levels a few points above par, with no news out to explain the slide - and no similar activity seen in any other bond in the Qwest capital structure.

The trader said Wednesday that he had no idea why the bonds plummeted as they did - but he said it really didn't matter anyway. "It's a small issue" - just $55 million - "and it trades by appointment."

He noted that before the two $1 million trades on Tuesday, there had not been any transactions in the issue for months and months, so the big slide, while impressive for the sheer size of the drop on a points basis, "is not meaningful."

He speculated that "somebody [who held the bond] wanted to sell it and put it out there. Someone made a bid, and they sold it. I think they made a mistake - but it's their money."

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