Fairport, upsized NII price alongside Delphi-led drive-by trio; NII bonds trade up

By Paul Deckelman and Paul A. Harris

New York, Feb. 11 - Following Friday's quiet and pretty much wasted pre-Nemo session, the high-yield market got back to work with a vengeance on Monday, pricing five dollar-denominated, purely junk-rated deals collectively worth more than $2.3 billion.

Two storm-delayed offerings expected to price on Friday finally came to market on Monday, both from the telecommunications sector. Domestic operator Fairport Communications, Inc. priced $300 million of six-year secured notes, which firmed slightly when they reached the aftermarket.

NII International Telecom SCA, which markets wireless service in Latin America, did $750 million of 6.5-year paper, after twice upsizing that deal to meet investor demand. Even with more paper available, interest in the new deal remained brisk, with traders seeing the new bonds having firmed smartly when they were freed for secondary-market action.

Besides those two leftover forward-calendar deals, the day saw a trio of quick-to-market transactions.

Automotive electronics manufacturer Delphi Corp. had the big deal of the day, an $800 million issue of 10-year notes.

Aerospace components maker Triumph Group, Inc. did an upsized $375 million of weight-year notes, which traded modestly higher in the aftermarket.

And Speedy Group Holdings Corp. - a provider of alternative financial services, which just last week did a drive-by add-on to an existing issue of its bonds - paid the junk market a return visit, pricing an upsized $125 million stand-alone four-year deal.

Traders said that market activity outside of the new-deal arena was largely muted.

But statistical measures of market performance, which struggled most of last week before ending mixed on Friday, moved to the upside during Monday's session.

Delphi drive-by

Business was brisk as the new week got under way. Executions of the deals were a mixed bag, as only one of the five came at the tight end of talk, while two came in the middle of talk and two came at the wide end.

In drive-by action, Delphi priced an $800 million issue of 10-year senior notes (Ba1/BB+/BBB-) at par to yield 5%, at the wide end of the 4¾% to 5% yield talk..

J.P. Morgan, Merrill Lynch, Deutsche Bank, Barclays, Citigroup and Goldman Sachs were the joint bookrunners for the debt refinancing and general corporate purposes deal.

NII twice upsized

In a deal that ran a full roadshow, NII International Telecom priced a restructured $750 million issue of 6.5-year senior notes (B2/CCC+) at par to yield 11 3/8%.

The deal was upsized from $600 million, after having been previously upsized from $400 million.

The yield printed in the middle of the 11¼% to 11½% yield talk.

In a structural change, call protection was increased to four years from 3.5 years.

The notes also underwent covenant changes (see related story in this issue).

J.P. Morgan, Credit Suisse, Goldman Sachs and Morgan Stanley were the joint bookrunners for the general corporate purposes deal.

Triumph at the tight end

The only deal to price at the tight end of price talk on Monday came from Triumph Group, which priced an upsized $375 million issue of eight-year senior notes (Ba2/BB-) at par to yield 4 7/8%.

Price talk for the quick-to-market issue was set in the 5% area.

RBC was the left bookrunner for the debt refinancing deal, which was upsized from $350 million.

J.P. Morgan and UBS were joint bookrunners.

FairPoint 6.5-year notes

FairPoint Communications priced a $300 million issue of 6.5-year senior secured notes (B2/B) at par to yield 8¾%.

The yield printed at the wide end of the 8½% to 8¾% yield talk.

Morgan Stanley, Credit Suisse and Jefferies were the joint bookrunners for the debt refinancing.

Speedy Cash upsizes

Speedy Cash priced an upsized $125 million issue of senior cash pay notes due Nov. 15, 2017 at par to yield 12%.

The yield printed on top of yield talk.

Jefferies was the bookrunner for the quick-to-market deal, which was upsized from $100 million.

Proceeds will be used to fund a distribution to shareholders.

The waters of the primary market are apparently fine for Speedy Cash, which made its second pass through the primary market in less than a week.

On Feb. 5, Speedy Cash Intermediate Holdings Corp. priced a $100 million add-on to its 10¾% senior secured notes due May 15, 2018 (existing B3/confirmed B) at 106.25.

The tap came at the rich end of the 106 to 106.25 price talk.

Jefferies and UBS were the joint bookrunners.

Proceeds from the Feb. 5 deal will be used to fund the acquisition of Wage Day Advance Ltd.

RSI Home under way

The Monday session produced news of a single-roadshow start.

RSI Home Products, Inc. plans to price a $525 million offering of five-year senior secured second-lien notes late this week.

Merrill Lynch, Wells Fargo and Barclays are the joint bookrunners.

The Lincolnton, N.C.-based manufacturer of in-stock and made-to-stock kitchen, bath and storage products plans to use the proceeds to repurchase Onex Partners existing equity stake, repay all debt under its existing credit facilities and for general corporate purposes.

Nice move for new NII

When NII International's new 11 3/8% notes due 2019 were freed for secondary market dealings, traders saw the Reston, Va.-based international wireless service provider's issue shoot up solidly.

"NIHD traded very well," one of them said, referring to the company's stock ticker symbol, pegging the notes at 102½ bid, 103 offered.

A second trader saw the bonds get as good as 102½ on the bid side before going out at 102¼ bid, 102½ offered.

And at another desk, a trader saw them at 102¼ bid, 102¾ offered.

The company's existing NII Capital Corp. 8 7/8% notes due 2019 fell to 75½ bid going out, a 1 1/8 point loss on round-lot volume of over $8 million.

Triumph trades a little

A trader said that Triumph Group's 4 7/8% notes due 2021 "didn't trade very often" once they had priced.

He saw the Berwyn, Pa.-based aircraft systems and components manufacturer's upsized $375 million issue at 100¼ bid, 100½ offered after that drive-by offering had priced at par.

A second trader quoted the bonds going home at 100 3/8 bid, 100 5/8 offered.

Fairpoint holds near issue

One of the traders said that Fairpoint Communications' 8¾% senior secured notes due 2019 "didn't trade up much either."

He said the Charlotte, N.C.-based telephone, cable, broadband and data services provider's $300 million issue had edged up to 100 1/8 bid, 100 3/8 offered, after having priced at par.

Quick rise for Speedy

A trader who did not see any kind of dealings going on in the new Speedy Group Holdings 12% cash-pay notes due 2017 opined, "You're not gonna see that one," noting its small size of $125 million, as well as its hefty coupon, as likely reasons why the deal would be quickly put away.

However, a second trader quoted the Wichita, Kan.-based payday loan provider's same-day deal at 101 bid, 102 offered, up from its par issue price.

Delphi doesn't trade

Traders saw no immediate aftermarket activity in Delphi's 5% notes due 2023, owing to the lateness of the hour at which the Troy, Mich.-based automotive electronics manufacturer's $800 million drive-by offering had priced at par.

Millennium moves lower

A trader saw Friday's offering of 9½% senior secured notes due 2018 from Millennium Offshore Services Superholdings LLC at 100¾ bid, 101½ offered.

He called that down about a half-point from the level at which he saw the United Arab Emirates-based offshore oil and gas rig provider's $225 million deal trade up to after pricing at par,

However, a second trader said he had seen no dealings in that new issue.

Canto deal climbs

A trader quoted Cantor Commercial Real Estate Co. LP's new 7¾% notes due 2018 as having firmed to 101 bid, 102 offered, saying that was up 1/8 of a point from where he had seen the bonds on Friday.

The New York-based commercial real estate finance company priced $250 million of the notes on Thursday at 98.494 to yield 8%.

Labco gains

Among some of the recently priced non-dollar denominated high-yield issues, France's Labco SAS's 8½% senior secured notes due 2018 are up 1½ points at 104½ since the company reopened the issue on Wednesday, a bond source in London said on Monday.

The Paris-based clinical laboratory operator sold a €100 million add-on to its existing notes at 103 to yield 7.753%.

KION rises

Germany's KION Group GmbH's fixed-rate senior secured notes due 2020 that priced last week traded a "little better" in Monday's session, a London-based trader said.

The Wiesbaden, Germany-based provider of industrial and warehouse equipment and other material handling equipment priced its €450 million tranche at par to yield 6¾% on Wednesday. The paper subsequently rose to 100¾ in the secondary market.

ONO better

The 8½% seven-year senior notes due 2020 that Nara Cable Funding Ltd. - a financing unit of Spanish cable operator Grupo Corporativo ONO SA - priced at the end of January are up more than 2 points at 1021/4, a London-based bond source said on Monday.

The company sold €260 million of the seven-year notes at 98.69 to yield 8¾% on Jan. 31.

ENCE lower

ENCE Energia y Celulosa, SA's 7¼% senior secured notes due 2020 dropped to 99 in secondary trading, according to a London-based source.

The Madrid-based pulp producer and renewable energy generator sold €250 million of the seven-year notes at par on Jan. 25.

Infinis flat

Among recent sterling-denominated junk-rated bonds, Infinis plc's 7% senior notes due 2019 traded flat in terms of where the issue priced at the start of the month, according to a London-based trader.

The Northampton, England-based provider of landfill gas-to-electricity conversion services sold £350 million of the notes at par on Feb. 1.

Overall restrained market

Away from the trading in the new NII International bonds and several of the day's other issues, a trader said that he saw "not a ton" of other things going on.

"It was a fairly quiet start to the week. Nothing really stood out," he stated.

'A little bit cautious'

A second trader declared that Monday's session "opened up with a lot of noise in the marketplace - people were trying to get their arms wrapped around what was cooking."

But, he said, "a lot of accounts in the high-yield universe are just trying to figure out what deal's they're going to play or not going to play.

"That being said, they're going to be a little bit cautious. We have the president speaking tomorrow, and everybody's looking for excuses" not to do anything, he said.

He also noted that Monday "was one of the lightest days this year in Treasuries trading dollar-wise," another sign of investor caution in the fixed-income markets.

Back in Junkbondland, he said, "everything was sideways, trading around positions here and there, but still light in volume."

He added that he was seeing "a little bit of profit-taking in high-dollar bonds - not name-specific, but just across the board. That's what we're seeing these days."

Market signs turn higher

Statistical junk market performance indicators were mostly higher on Monday, after having been mixed on Friday, when the indicators broke out of a four-session rut.

The Markit Series 19 CDX North American High Yield index gained 5/32 of a point on Monday to end at 102 3/16 bid, 102 5/16 offered, after having gained 1/16 of a point on Friday, its first advance after two losses.

The KDP High Yield Daily index posted its second straight gain on Monday after four straight losses, edging up by 1 basis point to 75.17, after having improved by 6 bps on Friday.

But its yield rose for a sixth straight session, edging up 1 bp for a second consecutive day to close at 5.75%.

However, the widely followed Merrill Lynch High Yield Master II index snapped a five-session losing streak on Monday, as it rose by 0.l052%, versus Friday's 0.043% loss.

Monday's gain raised its year-to-date return to 1.087% from 1.035% at the close Friday, although it remained well down from its peak level for 2013 so far of 1.991%, set on Jan. 28.

Cristal Cody contributed to this review

© 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.