Beazer, Lantheus price, hang around issue; Mylan slates mega-deal; Sorenson slide continues

By Paul Deckelman and Paul A. Harris

New York, May 4 - After taking a rare day off on Monday, the high yield market primary pricing parade started back up on Tuesday as Beazer Homes USA Inc. and Lantheus Medical Imaging, Inc. priced new junk bond deals.

Beazer, an Atlanta-based homebuilder, brought a $300 million eight-year offering at par, while Lantheus, a Billerica, Mass.-based supplier of products for the medical diagnostic imaging industry, came to market with an upsized $250 million seven-year deal, which also priced at par. Traders saw both new deals trade right around their issue price in the aftermarket.

Price talk emerged from U.K. chemical manufacturer Ineos Finance plc, whose €700 million equivalent two-tranche offering of dollar- and euro-denominated five-year senior secured notes is seen likely to price some time after the books on the euro portion of the deal are closed early Wednesday morning.

New deal announcements came from Pittsburgh pharmaceuticals maker Mylan Inc., which plans to sell $1 billion of seven-and-10-year notes, from Kansas City, Mo.-based wire rope and cable manufacturer WireCo Worldgroup Inc., which will sell $275 million of seven-year notes, and from Canadian agribusiness company Viterra Inc., which will shop around a C$500 million notes offering. High yield syndicate sources heard Mylan and WireCo poised to start road shows on Wednesday for their respective deals, while U.K. electricity generator International Power plc is also hitting the road on Wednesday, with a €250 million offering of seven-year notes.

Away from the new-deal arena, traders said junk was generally easier, taking its cues from equities, which slid around the world Tuesday as fears spread that Europe's attempt to contain Greece's debt crisis would fail.

Junk sold off with the thoroughly battered stock markets on Tuesday, according to a trader from a high-yield mutual fund, who spoke late in the afternoon.

However a syndicate official asserted shortly after that high yield sustained a little less damage than stocks.

Among specific issues, there were further gyrations in Sorenson Communications' bonds, which had fallen sharply on Monday on investor fears that the provider of special communications technology to the handicapped will get a sharply reduced reimbursement under a proposed federal cost schedule.

Beazer prices at mid-talk

Meanwhile, the primary market remained active, albeit on a thinner volume than had been the case through late April.

Two issuers, each bringing a single tranche of par-pricing notes, combined to raise $550 million.

Beazer Homes USA priced a $300 million issue of eight-year senior notes (Caa2/CCC) at par to yield 9 1/8%, in the middle of the 9% to 9¼% price talk.

Credit Suisse and Citigroup Global Markets Inc. were joint bookrunners for the quick-to-market debt refinancing deal.

Lantheus upsizes

Meanwhile, Lantheus Medical Imaging priced an upsized $250 million issue of seven-year senior notes (B2/B+) at par to yield 9¾%, at the wide end of the 9½% to 9¾% price talk.

Jefferies & Co. was the bookrunner.

Proceeds will be used to refinance the company's existing credit facilities and to repurchase a portion of its outstanding preferred stock.

Shortly after terms surfaced, a trader saw the new Lantheus 9¾% notes due 2017 trading up at least ¼ point.

"New issues continue to generally perform well," the trader commented.

A debt capital markets banker agreed, generally.

"New issues are going good because there is really no secondary market these days," the banker said.

"Everybody is just playing the primary."

Ineos sets price talk

Ineos Finance set price talk for its €700 million equivalent offering of five-year senior secured notes (B2/expected B-).

A $585 million tranche is talked to yield 9% to 9¼%. A €250 million tranche is talked to yield 9¼% to 9½%.

Books closed late Tuesday for the dollar-denominated notes.

The books are scheduled to close 5 a.m. ET Wednesday for the euro-denominated notes.

Barclays Capital and JPMorgan are the joint physical bookrunners for the debt refinancing deal. Citigroup and Morgan Stanley are the joint bookrunners.

Mylan plans $1 billion

The forward calendar continued to grow on Tuesday, with announcements about three deals that are expected to start marketing presentations on Wednesday.

Mylan will begin an investor roadshow on Wednesday for a $1 billion two-part offering of senior notes.

Goldman Sachs & Co. will lead the deal, which features tranches of seven-year notes and 10-year notes.

The Pittsburgh-based generic and specialty pharmaceutical company will use the proceeds to prepay part of its outstanding term loans.

WireCo to sell $275 million

Elsewhere, WireCo Worldgroup, Inc. will begin a roadshow on Wednesday for a $275 million offering of seven-year senior notes.

The deal is set to price during the May 10 week.

Goldman Sachs and JP Morgan are joint bookrunners for the debt refinancing and general corporate purposes deal.

International Power to sell euro deal

Also, England's International Power Finance will begin a roadshow on Wednesday for a €250 million offering of seven-year senior unsecured bullet notes (Ba3/BB-).

Citigroup and RBS Securities are joint bookrunners.

Proceeds will be used for general corporate purposes.

New Beazer, Lantheus anchored around issue

When Beazer Homes' new 9 1/8% notes due 2018 were freed for secondary dealings, a trader saw the bonds staying in a par to 100¼ range. Another trader quoted the $300 million issue at par bid, 100½ offered.

Beazer's outstanding bonds, such as its 8 1/8% notes due 2016, remained around their previous levels, in this case, around the 95-96 area.

A trader saw the new Lantheus Medical Imaging 9¾% notes due 2017 at 100½ bid, 101½ offered, up from their par offering price earlier in the session, however, by the end of the day, another trader had pegged those bonds at par bid, 100½ offered.

Market indicators head south

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index fall a full point on Tuesday to end at 99¼ bid, 99½ offered, after having gained 3/8 point on Monday.

The KDP High Yield Daily Index was meantime down by 20 basis points on Tuesday to 72.91, after having gained 1 bp on Monday. Its yield widened by 7 bps to 7.86%, after having narrowed by 2 bps on Monday.

After three consecutive sessions on top - although just barely on Monday - advancing issues fell behind decliners on Tuesday, lagging by a better than seven-to-five ratio.

Overall market activity, represented by dollar-volume levels, jumped by 35% on Tuesday from the levels seen the previous session.

A trader characterized Tuesday's session as "not a nice day." Another opined that "obviously, stocks ruled the day" and led the way downward, with the bellwether Dow Jones Industrial Average plunging by 225.06 points, or 2.02%, to finish at 10,926.77, while other, broader, indexes followed the same trend.

Another trader said that on the whole, "the day was a little blah, to say the least."

Sorenson slips lower

A trader saw Sorenson Communications' 10½% senior secured notes due 2015 ending at around 59½ bid, 60½ offered, after having traded earlier in the session around 55 bid. "It looks like they got down to 55 and then bounced off there."

Another trader said that "there was a lot of action in Sorenson." He saw the bonds open offered at 57, with no bids, then retreat down to around 45-50, well down from Monday's levels in the 60s. Later in the session, he said, the bonds had moved back up into the 50s before ending around 56 bid, "with some activity."

By one estimate, as many as $25 million of the bonds had changed hands during the session.

The $735 million issue - which had priced at 98.101 on Jan. 14 to yield 11% -- had nosedived on Monday down to the low to mid 60s from prior levels in the high 90s.

Traders said that the paper had apparently been moved by investor fears that a new proposed reimbursement schedule for companies providing telecommunications relay services that allow speech- and hearing-handicapped people to use regular telephone service with the help of special equipment, like Salt Lake City-based Sorenson, could result in sharply lower payments to the providers if it is adopted by the Federal Communications Commission.

"So if you were long on these," one of the traders quipped, "you were sore."

Calls seeking clarification of the rate schedule situation from Sorenson and from the National Exchange Carriers Association, a telecommunications industry group which administers the fund from which the compensation to the providers is paid and which proposes the rate schedule to the FCC, had not been answered by press time on Tuesday evening.

Synovus seems to stabilize

Synovus Financial Corp.'s 5 1/8% notes due 2017 were quoted by a trader around an 84-86 context, with the bonds finishing on the high side of that range, around 86, although he said that did not see any actual trades in the credit.

Another trader saw the bonds around the 86½ bid, 87½ offered level on "really small" volume. "There were just some small pieces trading around," he said, "pretty much where they [previously] were."

The bonds had fallen on Monday to around the 86 level from 92 at the end of last week, pushed down by Monday's statement by the Columbus, Ga.-based bank that it was terminating its previously announced stock-for-debt exchange offer for the bonds, citing concerns over a potential "ownership change."

Mariner bonds move lower

A trader saw continued slippage in Mariner Energy Inc.'s paper amid general softness in junk energy names which have exposure to the Gulf of Mexico, following the recent drilling rig disaster there.

He saw the Houston-based energy exploration and production company's 8% notes due 2017 off ½ point at 109½ bid, whole the company's 11¾% notes due 2016 were also off ½ to ¾ point, he said, quoting the issue at 126½ bid.

Mariner's 7½% notes due 2013 held steady at 103¾ bid, 103 7/8 offered, about where they were on Monday, but he noted that as the short paper in the company's capital structure, "they're already trading around their call price," in expectation that the bonds will be taken out as part of the recently announced planned acquisition of Mariner by Apache Co.

Another trader meantime saw Houston E&P operator ATP Oil & Gas Co.'s second lien senior secured 11 7/8% notes due 2015 at 95¼ bid, 96¼ offered - well down from the 99.531 level at which that $1.5 billion issue of bonds had priced on April 19 - the day before the Deepwater Horizon drilling rig exploded in the Gulf, killing 11 workers and setting off a mammoth oil spill which is still raging out of control.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.