Alon prices, Calpine, Sinclair, others slate; new NOVA, Solutia up, also Tronox; CIT slides

By Paul Deckelman and Paul A. Harris

New York, Oct. 13 - The high yield primary sphere - fresh from a surprisingly busy session ahead of the Columbus Day holiday break which saw some $1.6 billion of new paper price Friday, fully half of last week's total - got right back into the swing of things when trading resumed on Tuesday, as Alon Refining Krotz Springs, Inc. priced a slightly upsized offering of five-year senior secured notes, high yield syndicate sources said. Those bonds were being quoted higher in the aftermarket.

That was the day's only U.S. junk pricing (not counting the upsized and split-rated offering from American Tower Corp.) - but there was also a deal from Europe, and pricings were by no means the only thing going on in the new-deal arena.

A slew of prospective issuers announced upcoming bond deals, including Sinclair Broadcast Group Inc., as well as Headwaters Inc., Lion's Gate Entertainment Inc., Talecris Biotherapeutics Holdings Corp. and ViaSat Inc. Syndicate sources meantime heard Drummond Corp. also planning a new deal for some time this week.

Among recently priced deals, NOVA Chemicals Corp.'s new two-part issue was heard to have moved up once it was freed to trade. Solutia Inc.'s new bonds held onto the gains they notched on Friday after the issue was priced and moved into the aftermarket.

Out of that same chemicals sector, Tronox Worldwide LLC's bonds were seen up solidly for a third straight session, even though there seemed to be no fresh news out on the Oklahoma City-based pigments producer that might explain the rise.

CIT Group Inc.'s bonds were seen lower, amid indications that investors are shunning the troubled New York-based commercial lender's debt-exchange offer, which could force it into a bankruptcy filing.

Alon Refining upsizes

Alon Refining Krotz Springs, Inc. priced an upsized $216.5 million issue of 13½% five-year senior secured notes (B2/BB/) at 94.857 to yield 15% on Tuesday.

The deal came wider than talk which had the notes pricing with a 13¼% coupon, discounted by 4 to 5 points, to yield 14½%, plus or minus 25 basis points.

Jefferies & Co. ran the books for the deal, the face amount of which was upsized to $216.5 million from $205 million.

Hella prices €300 million

From Europe, Hella KGaA Hueck & Co. priced a €300 million issue of 7¼% five-year notes (Ba1) at 99.493.

Deutsche Bank Securities and RBS Securities were joint bookrunners.

Sinclair Television for Wednesday

Sinclair Television Group, Inc. set price talk for its $430 million offering of eight-year second-lien senior secured notes at 9¼% to 9½% on Tuesday, according to an informed source.

The books close at 1 p.m. ET on Wednesday. The Rule 144A for life deal is expected to price Wednesday afternoon.

JP Morgan is the bookrunner.

Proceeds will be used to fund the tender for the company's 3% and 4 7/8% convertible notes.

HeidelbergCement releases guidance

HeidelbergCement AG plans to price €1 billion minimum of notes this week.

The deal will be comprised of five-year notes, which come with initial guidance of 8%, seven-year notes, with guidance of 8½% and, in a tranche that was added subsequent to the kickoff of the deal,10-year notes with guidance of 9¼%.

Tranche sizes remain to be determined.

Deutsche Bank and Royal Bank of Scotland are global coordinators and, along with Bank of America Merrill Lynch and Commerzbank, joint bookrunners.

Proceeds will be used to refinance bank debt.

Lions Gate to sell $200 million

Lions Gate Entertainment will host an investor call at 11 a.m. ET on Wednesday for its $200 million offering of seven-year senior secured second-priority notes (B2/B).

The Rule 144A for life deal is expected to price before the end of the week.

JP Morgan has the books.

Proceeds will be used to repay revolver debt.

Drummond plans refinancing

Coal producer Drummond Co. plans to price a $250 million offering of five-year senior notes (B1) before the end of the week.

The syndicate of banks working the Rule 144A for life deal includes Citigroup, Bank of America Merrill Lynch, HSBC, Wells Fargo Securities and Scotia Capital.

The notes will come with two years of call protection.

Proceeds will be used to repay bank debt.

Headwaters roadshowing

Headwaters will market a $280 million offering of five-year senior secured notes (expected B2/confirmed B+) for the rest of this week.

The Rule 144A/Regulation S deal, which is being led by joint bookrunners Deutsche Bank Securities, Morgan Stanley and Bank of America Merrill Lynch, is expected to price early next week.

Proceeds will be used to repay bank debt, as well as to fund the tender for the company's 2 7/8% convertible notes and for general corporate purposes.

ViaSat starts marketing Wednesday

Meanwhile ViaSat will start a roadshow on Wednesday for its $250 million offering of seven-year senior unsecured notes (expected ratings B1/B).

The deal is expected to price on Oct. 21.

JP Morgan, Bank of America Merrill Lynch and Wells Fargo Securities are joint bookrunners.

Proceeds will be used for general corporate purposes, which may include financing costs related to the purchase, launch and operation of the company's ViaSat-1 satellite, other potential acquisitions, working capital or capital expenditures.

New Alon Refining bonds bid higher

When the new Alon Refining Krotz Springs 13½% senior secured notes due 2014 were freed for secondary dealings, a trader quoted the bonds at 95¼ bid - up from the 94.857 at which the issue priced - but said he had seen no offers on the new deal.

Existing American Tower bonds trade up

The split-rated (Baa3/BB+/BBB-) $600 million issue of 4 5/8% notes due 2015 from American Tower came off the investment grade desks of the participating banks, and was seen by traders mostly oriented towards high-grade buyers.

"What's the coupon - 4% and change?" one trader scoffed. "We don't care about that - not here, anyway, although I'm sure there are crossover desks" that might show an interest.

A second trader agreed that with such a small and un-junk-like coupon, "you're not going to find too many people" in Junkbondland who are interested in such a credit.

Among the Boston-based communications antenna tower operator's existing issues, a trader saw "nothing at all" doing among the 7 1/8% notes due 2012 which are expected to be redeemed using the proceeds of the bond deal.

However, he said that the 7% notes due 2017 were "pretty active, with - wow! -- $54 million traded."

He saw those bonds move up to 108½ bid, 108 5/8 offered - improved from 107¾ earlier in the session, but on the whole, "not much of a mover" from 108 bid, where they had last traded on Thursday.

He also said that oddly, "the 7s were the only real trade in that name," with the company's other issues relatively inactive.

At another desk, a trader saw the 7¼% notes due 2019 bid at 109 Tuesday, without an offer, up from last week's level of 107 bid, also with no offers.

Strength in new Solutia bonds

A trader said that Solutia's 8¾% notes due 2017 "definitely" traded as high as 103¼ bid on Tuesday morning, although he added that he "didn't see a lot of activity in it." He saw the bonds come back down from their early peak levels later in the session, last trading at 1021/4, 102¾ offered.

The St. Louis-based chemical company priced its $400 million offering of bonds - upsized from the original $300 million - had priced at par on Friday and then had moved up to around 102 bid, 103 offered.

NOVA bonds get better

Another chemical producer - Calgary, Alta.-based Nova Chemicals - was seen to have moved up in the secondary on Tuesday, with a trader quoting its 8 3/8% notes due 2016 at 100¼ bid, 100½ offered, up from the 99.34 level at which those bonds had priced on Friday to yield 8½%.

Its $350 million of 8 5/8% notes due 2019 were trading Tuesday at 100 3/8 bid, 100 5/8 offered - up from 99.168, where the issue priced Friday to yield 8¾%.

Wynn seen weaker

A trader quoted Wynn Las Vegas LLC/Wynn Las Vegas Corp.'s 7 7/8% first mortgage bonds due 2017 "actually a little weaker this morning," at 97½ bid, 97 7/8 offered - down from the 97.823 level at which the Las Vegas-based casino resort operator priced its $500 million deal.

"It was offered "just above the [Friday] offering price and just below that offering price."[

'The silly season'

Several traders have recently said that there seems to be some pressure on prospective new issuers to strike while the iron is hot and get whatever financing they need now, before any feared closing of the window of opportunity.

One trader, noting the sudden rush of new offerings, opined that "yep, it's silly season." He said that he considered the 9¼% to 9½% price talk on Sinclair's upcoming offering to be "pretty aggressive."

Market indicators inconclusive

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up 3/16 point Tuesday at 93 1/16 bid, 93 5/16 offered, after having risen by ¼ point on Friday.

The KDP High Yield Daily Index firmed Tuesday by 4 bps to end at 96.13, after having been unchanged in Friday's dealings. Its yield narrowed by 1 bp to 8.74%.

In the broader market, declining issues led advancers for a second consecutive session Tuesday, by a better than seven-to-six margin.

Overall market activity, as measured by dollar-volume levels, jumped nearly 66% from Friday's sedate pre-holiday pace.

Tronox surge continues

A trader said that Tronox Worldwide LLC's 9½% notes due 2012 were "up a lot earlier," continuing the sharp rise in the bankrupt chemical pigments manufacturer's issue seen last week.

He quoted the bonds as settling in at 57 bid, 58 offered, which he called a 3 or 4 point gain on the day, on "a lot of trading."

That came on top of the roughly 10-point jump those bonds took last Thursday - a day after the company released favorable financial projections for the next several years - which took them up to around 47 bid from the mid 30s, and then the 6 or 7 point rise into the lower 50s seen on Friday, both in busy dealings.

Tronox was again fairly active on Tuesday, with a market source, quoting the bonds at 58, seeing over $12 million having traded hands as of mid-afternoon, making it one of the 10 most active issues up to that point of the day.

"These things just keep running," another trader said, commenting on the wide trading range seen Tuesday of 54 ½ to 58, with the bonds ending around the latter level. "They've come back pretty nicely."

CIT seen softer

A trader saw CIT bonds "a little heavy again," quoting its 4 1/8% notes maturing Nov. 3 at 64 bid, 66 offered, which he said was "down a couple of points." He meantime saw its 7 5/8% notes due 2012 at 60 bid, 62 offered, on "not much volume, pretty much unchanged."

He said "It looks like there's a sort of convergence, with that kind of paper down around 60."

The trader opined that "by the looks of the quotes, you would say" that the company's debt exchange offer is not going well, leading some observers to speculate that CIT may instead have to opt for a bankruptcy restructuring of some kind, although he quickly added that he did not know "for sure."

A market source was quoting CIT's 6 7/8% notes coming due on Nov. 1 at 62½ bid, calling them down some 3½ points on the day, while the company's 5.40% notes due 2016 lost nearly 2 points on the day

Also among the financials, a trader said that Caprmark Financial Group's bonds were quoted lower - amid news reports suggesting this commercial lender, too, may find itself pushed into bankruptcy, perhaps as soon as the end of the month - but on "virtually no trading."

He said that a 19-21 range "covers all of it," such as the floating-rate notes due 2010 and the 6.30% notes due 2017.

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