DISH, First Data, Tenet price deals in busy primary; recent issues dip but broad market strong

By Paul A. Harris and Stephanie N. Rotondo

Phoenix, May 15 - The high-yield new issue market was jam-packed Wednesday, with issuers pricing an eye-popping $6.95 billion face amount of junk-rated paper in 10 tranches.

Only one of those tranches had been in the market longer than 48 hours.

DISH DBS Corp. led the action with an upsized $2.6 billion two-part offering in a transaction that would help fund its proposed acquisition of Sprint Nextel Corp.

Proceeds will be placed into escrow, subject to release to fund the merger; the notes will be redeemed if the merger is not completed.

Among the other companies in the market were Tenet Healthcare Inc. and First Data Corp.

"They're just piling on these new issues with low coupons," a trader remarked.

Tenet Healthcare priced $1.05 billion of 4 3/8% notes due 2021. The company intends to use proceeds to redeem its 8 7/8% notes due 2019.

But breaking the low-coupon trend, First Data brought a $750 million issue of 11¾% notes due 2021, upsizing from $500 million. A trader said that the company's existing debt was dominating overall trading for the midweek session.

However both Tenet and First Data came too late in the session for there to be much action in them.

As more new deals hit the tape, recently priced issues, such as Hawaiian Airlines Inc.'s latest pass-through certificates, were coming off.

Still, the overall high-yield market was strong in midweek trading, according to various market indicators.

DISH prices $2.6 billion

DISH DBS priced an upsized $2.6 billion two-part offering of senior notes (Ba2/BB-) on Wednesday in a transaction backing its proposed merger with Sprint Nextel Corp.

It included a $1.25 billion tranche of four-year notes that priced at par to yield 5%.

The yield printed on top of yield talk. Earlier guidance came in the 4¾% area. The four-year notes will be callable at par for the first six months and at 101 in the following six months in the event that the merger is not completed.

DISH also priced a $1.35 billion tranche of 10-year notes at par to yield 6¼%. The yield printed on top of yield talk. Earlier guidance came in the 6% area. The 10-year notes will be callable at 101 for the first 12 months in the event that the merger is not completed.

Previously, the special call structure, covering both tranches, provided a par call for the first six months, and a 101 call thereafter if the merger is not completed.

Barclays was the lead left bookrunner. Jefferies & Co., Macquarie Capital (USA) Inc. and RBC Capital Markets LLC were the joint bookrunners.

DISH is a direct broadcast satellite pay-TV service based in Englewood, Colo.

Tenet drive-by

Tenet Healthcare priced $1.05 billion of 8.5-year senior secured notes (Ba3/B+) at par to yield 4 3/8%.

The yield printed in the middle of talk, which was set at 4¼% to 4½%.

Barclays, BofA Merrill Lynch, Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the joint bookrunners for the debt refinancing.

Seagate on top of talk

Seagate HDD Cayman priced a $1 billion offering of senior notes due 2023 (Ba1/BB+/BBB-) at par to yield 4¾%, on top of yield talk.

Morgan Stanley & Co. LLC, BofA Merrill Lynch and BNP Paribas Securities Corp. were the joint bookrunners.

Proceeds will be used to replenish cash associated with the recent redemption of the 10% senior secured notes, to retire up to $250 million of outstanding senior notes and for general corporate purposes, which may include, but are not limited to, capital expenditures and other investments in the business and other debt repurchases.

First Data upsizes

First Data priced an upsized $750 million issue of senior subordinated notes due Aug. 15, 2021 (Caa2/CCC+) at par to yield 11¾% on Wednesday, according to a syndicate source.

The quick-to-market deal was upsized from $500 million.

The yield printed on top of yield talk.

Citigroup, Deutsche Bank Securities Inc. and BofA Merrill Lynch were the joint physical bookrunners.

J.P. Morgan Securities LLC, Wells Fargo, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., HSBC Securities (USA) Inc. and KKR were the joint bookrunners.

Proceeds will be used to redeem a portion of the company's existing 11¼% senior subordinated notes due 2016.

First Data is a Greenwood Village, Colo.-based provider of electronic commerce and payment services.

Dynegy at the tight end

Dynegy Inc. priced a $500 million issue of 5 7/8% 10-year senior notes at par.

The yield printed at the tight end of the 6% area talk.

Morgan Stanley, Credit Suisse, Barclays, Deutsche Bank, Goldman Sachs, JPMorgan, BofA Merrill Lynch, RBC and UBS Securities LLC were the joint bookrunners for the debt refinancing deal.

SM Energy upsizes

SM Energy Co. priced an upsized $500 million issue of 10.5-year senior notes (Ba3/BB-) at par to yield 5%.

The issue was upsized from $400 million and priced on top of yield talk.

BofA Merrill Lynch, Wells Fargo and JPMorgan were the joint bookrunners.

Proceeds will be used to repay the company's revolving credit facility and for general corporate purposes.

Magnetation prices restructured deal

In Wednesday's sole roadshow deal, Magnetation LLC and Mag Finance Corp. priced a $325 million issue of restructured five-year senior notes (B3/B-) at par to yield 11%.

The yield printed on top of the yield talk.

In a restructuring of the deal, the tenor of the notes was decreased to five years from seven years, while call protection was increased to the life of the notes from the previous non-call-three structure.

There were also changes to the asset-sales, restricted-payments and debt-test covenants.

JPMorgan, Jefferies and Deutsche Bank are the joint bookrunners.

The Grand Rapids, Mich.-based iron ore producer plans to use the proceeds to repay debt, for general corporate purposes and for capital expenditures associated with construction projects.

Amkor upsizes

Amkor Technology, Inc. priced an upsized $225 million add-on to its 6 3/8% senior notes due Oct. 1, 2022 (existing ratings Ba3/BB) at 103 on Wednesday, according to a market source.

Deutsche Bank and Credit Suisse were the joint bookrunners for the quick-to-market add-on, which was upsized from $200 million.

The Chandler, Ariz.-based semiconductor company plans to use the proceeds for general corporate purposes, which may include, among other things, capital additions, acquisitions and other investments.

The original $300 million issue priced at par on Sept. 18, 2012.

Harland Clarke taps 9¾% notes

Harland Clarke Holdings Corp. priced a $50 million tack-on to its 9¾% senior secured notes due Aug. 1, 2018 (current ratings B1/B+) at 109 on Wednesday, according to an informed source.

The tack-on notes have a 7.22% yield to worst.

Credit Suisse was the bookrunner.

Proceeds will be used for general corporate purposes, including the redemption of a portion of the company's 9½% senior notes due 2015.

Wynn split-rated 10-year deal

Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. priced a $500 million split-rated issue of non-callable 10-year senior notes (Ba2/BBB-) at par to yield 4¼% on Wednesday, according to a market source.

The yield printed on top of yield talk.

Deutsche Bank and JPMorgan were joint bookrunners for the quick-to-market issue.

The Las Vegas-based gaming, entertainment and lodging company plans to use the proceeds to purchase its 7 7/8% first mortgage notes due 2017 and to redeem any 2017 notes not tendered.

Talking the deals

Thursday promises to be a busy day in the primary market as dealers set price talk on offerings that have run their roadshows.

Builders FirstSource, Inc. talked its $350 million offering of eight-year senior secured notes (Caa2/B-) with a yield in the 7¾% area.

Credit Suisse, Citigroup and SunTrust Robinson Humphrey are the joint bookrunners.

Sugarhouse HSP Gaming Prop. Mezz. LP and Sugarhouse HSP Gaming Finance Corp., units of Sugarhouse Casino, talked their $235 million offering of eight-year second-lien notes (B3/CCC) to yield in the 6½% area.

Goldman Sachs, Wells Fargo, BofA Merrill Lynch and Fifth Third Securities Inc. are the joint bookrunners.

And Neenah Paper, Inc. talked its $175 million offering of eight-year senior notes (Ba3//) to yield 5¼% to 5½%.

Goldman Sachs, JPMorgan and Credit Suisse are the joint bookrunners.

Springs Window starts roadshow

The Wednesday session also saw additions to the active forward calendar.

Springs Window Fashions began a roadshow on Wednesday for its $470 million offering of eight-year senior secured notes (expected ratings B2/B-).

JPMorgan and BofA Merrill Lynch are the joint bookrunners. KeyBanc Capital Markets is the co-manager.

Proceeds will be used to fund the acquisition of Springs Industries by Golden Gate Capital.

Jefferies LoanCore pricing Friday

Jefferies LoanCore LLC is planning to price on Friday a $250 million issue of seven-year senior notes (mid-single B ratings expected).

Jefferies is the bookrunner for the deal.

Proceeds will be used to originate new commercial real estate loans and for general corporate purposes.

Market rises, recent deals soften

The overall high-yield market was higher Wednesday, according to various market indexes.

The North American CDX High Yield index moved up 3/32 to 106 23/32 bid, 106 27/32, a market source reported. The KDP High Yield index meantime moved up to 76.43 with a 5.02% yield.

Wednesday's reading compared to a level of 76.41 with a 5% yield on Tuesday.

However, while the market tone was positive, recently priced issues were being pressured as more and more new deals came out.

Hawaiian Air's $328.26 million of 3.9% class A certificates due July 15, 2027 - an issue that priced Tuesday - held in at par 7/8, a trader said, but the $116.28 million of 4.95% class B certificates due July 15, 2023 dipped nearly ½ point to par 7/8.

And, AES Corp.'s $250 million add-on to its 4 7/8% notes due 2023 fell over ½ point as well to close around 102 1/8, a trader said.

The add-on priced at 102 on Tuesday.

First Data dominates

A trader said First Data's existing 12 5/8% notes due 2021 were "very active" as the company brought a new issue on Wednesday.

The 12 5/8% notes closed up almost a point, the trader said, at 111.

Another trader said the paper was the "top traded" of the day, finishing at 111 7/8, also up nearly a point.

The second trader also saw the 11¼% notes due 2016 rising over a point to 102 1/8.

The Greenwood Village, Colo.-based provider of electronic payments priced a $750 million issue of 11¾% eight-year notes on Wednesday, with proceeds to go to redeeming the 11¼% notes.

Tenet bonds up pre-call

Tenet Healthcare also priced a new issue during the session, the proceeds of which will also go toward a redemption.

The company intends to call its 8 7/8% notes due 2019.

A trader saw the 8 7/8% notes moving up over a point to 1131/2. Another market source pegged the debt at 113½ bid, up a point.

Tenet owns and operates acute care hospitals, ambulatory surgical centers, diagnostic imaging centers and related healthcare facilities.

Caesars' bonds win

Caesars Entertainment Corp. debt was on the active side and firmer, though there was no news to prompt the gains.

A trader saw the 12¾% notes due 2018 moving up over 3 points to end at 71 1/8. The 10% notes due 2018 climbed over a point to close at 62 1/8.

Another market source placed the 10% notes at 62 bid, up over 2 points on the day.

Caesars is a Las Vegas-based casino and hotel operator.

Hot topics

In other recently topical names, Clear Channel Communications Inc.'s LBO bonds "continue to be active," a trader said.

He placed the 11% notes due 2016 at 93 and the 10¾% notes due 2016 at 921/2.

Another trader deemed the 11% notes up just fractionally at 93.

Meanwhile, J.C. Penney Co. Inc.'s 5.65% notes due 2020 inched up a point to 891/2, according to one trader. Another source saw the issue at 89½ bid, up 1½ points.

And, MBIA Inc.'s surplus notes due 2033 were "pretty active," a trader remarked, seeing the paper "continuing to creep up" to around 94.

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