Swissport prices, bonds up in trading; paper names pop on RockTenn news

By Paul Deckelman and Paul A. Harris

New York, Jan. 24 - Swissport International Ltd. was heard by high-yield syndicate sources to have priced a new deal on Monday: $425 million and CHF 350 million of seven-year notes by the Zurich-based provider of ground services to the commercial aviation industry.

When the new Swissport dollar-denominated bonds were freed for secondary dealings, they were seen to have firmed by more than 1 point from their issue price. New bonds from DirectBuy, for which terms emerged Monday after pricing on Friday, stayed anchored to their heavily discounted issue price.

Recent new deals, which did well last week, such as ONO Finance II plc and Vanguard Health Systems Inc.'s zero-coupon senior discount notes, were meantime seen holding those aftermarket gains.

Price talk emerged on several deals expected to price Tuesday, specifically from Packaging Dynamics Corp., Great Lakes Dredge & Dock Corp. and Excel Maritime Carriers Ltd.

New deals were announced by Dana Holding Corp., Casella Waste Systems, Inc., Oasis Petroleum, Inc. and Norway's Aker Drilling ASA, along with Aviv Healthcare and overseas issuers Priory Group Ltd. and Bakkavor Group, the latter two offerings sterling-denominated and Aker's a Norwegian kroner deal.

Paper and paper packaging names were seen mostly better, pushed up on the news that Rock-Tenn Co. has agreed to buy Smurfit-Stone Container Corp. and absorb its debt and other obligations.

Traders called the market firm, and statistical market measures pointed in that same direction.

Swissport atop lowered talk

The dollar-denominated primary market saw a single $425 million tranche of notes price on Monday.

However the active new issue calendar underwent a robust buildup.

Swissport International priced CHF 753 million equivalent of seven-year senior secured notes (B2/B) at par to yield 7 7/8%.

The yield printed on top of price talk that was revised downward from previous talk of 8% to 8¼%.

The notes were issued in tranches of CHF 350 million and $425 million.

Citigroup was the left lead bookrunner. Barclays Capital, BNP Paribas and RBC Capital Markets were the joint bookrunners.

The notes were issued via special purpose entity Aquila 3 SA.

Proceeds will be used to fund the leveraged buyout of the Zurich-based air passenger and cargo logistics and infrastructure company by French private equity group Pai Partners from the Spanish construction group Ferrovial for about €654 million.

Talking the deals

Setting the stage for what figures to be a busy Tuesday session, Packaging Dynamics talked its $400 million offering of five-year senior secured notes (B3/B) with a 9% area yield on Monday.

Goldman Sachs & Co. is the left lead bookrunner. Deutsche Bank Securities Inc. is the joint bookrunner.

Meanwhile Excel Maritime Carriers talked its $250 million offering of eight-year senior notes (Caa1/B-/) with a 9½% yield.

That deal comes via joint bookrunners Deutsche Bank Securities and Citigroup.

And Great Lakes Dredge & Dock talked its $250 million offer of eight-year senior notes (B3/B) with a 7 5/8% area yield.

Deutsche Bank Securities and Bank of America Merrill Lynch are the joint bookrunners.

Dana $700 million for Tuesday

Dana Holding Corp. plans to price $700 million of senior notes (B3/BB-) in two tranches on Tuesday.

The deal features tranches of eight-year notes, which come with four years of call protection, and 10-year notes which come with five years of call protection.

Citigroup, Wells Fargo Securities, Bank of America Merrill Lynch, Barclays Capital, ING, Deutsche Bank Securities and UBS Investment Bank are joint bookrunners for the bank debt refinancing deal.

Realogy marketing $700 million

Realogy Corp. began a roadshow on Monday for a $700 million offering of eight-year senior secured notes (/CC/).

The deal is expected to price late this week.

J.P. Morgan Securities LLC, Barclays Capital, Credit Suisse and Goldman Sachs & Co. are the joint bookrunners for the bank debt refinancing deal.

Oasis starts roadshow

Elsewhere Oasis Petroleum Inc. began a roadshow on Monday for a $300 million offering of eight-year senior notes, which is also expected to price late in the present week.

J.P. Morgan Securities LLC, Wells Fargo Securities, BNP Paribas and UBS Investment Bank are the joint bookrunners.

The Houston-based independent oil-and-gas exploration-and-production company plans to use the proceeds to fund its exploration, development and acquisition program and for general corporate purposes.

Aviv marketing starts Tuesday

Aviv Healthcare Properties LP in conjunction with Aviv Healthcare Capital Corp. will run a Tuesday-to-Friday roadshow for a $200 million offering of eight-year senior notes via joint bookrunners Bank of America Merrill Lynch, Morgan Stanley and RBC Capital Markets.

High single-B credit ratings are expected.

The Chicago-based owner of skilled nursing facilities plans to use the proceeds to repay drawings under its acquisition credit line and to partially repay its mortgage term loan.

Casella eyes mid-week pricing

Casella Waste Systems plans to price a $200 million offering of eight-year senior subordinated notes (expected ratings Caa1/B-) during the middle part of the week.

Bank of America Merrill Lynch, J.P. Morgan Securities LLC and Credit Agricole are joint bookrunners for the debt refinancing deal.

Priory to bring £600 million

The sterling-denominated high-yield saw action on Monday.

Priory Group began marketing £600 million of high-yield notes.

The deal features a £425 million tranche of seven-year senior secured notes, which come with three years of call protection, and £175 million of eight-year senior notes, which come with four years of call protection.

Deutsche Bank, The Royal Bank of Scotland and Credit Suisse are the joint bookrunners for the acquisition financing.

Bakkavor plans £350 million

Also from the sterling-denominated market, Iceland's Bakkavor Group and Bakkavor Finance will market a £350 million offering of seven-year senior secured notes (expected ratings B2/B) throughout this week.

Barclays Capital and Royal Bank of Scotland are the physical bookrunners. Bank of America Merrill Lynch and HSBC are the passive bookrunners.

The Reykjavík, Iceland-based food manufacturer will use the proceeds to refinance debt.

Swissport dollar bonds do OK

When the new Swissport seven-year dollar-denominated bonds were freed for secondary dealings, a trader saw that paper get as good as 101¼ bid, 102 offered, well up from their par issue price earlier in the session.

A second trader saw the bonds at 101¼ bid, 102¼ offered.

Nobody buying DirectBuy

On the other hand, a trader said that DirectBuy's new six-year senior secured bonds "were struggling" when they hit the aftermarket, quoting the Merrillville, Ind.-based company's paper "offered below issue. They did not come on like gangbusters."

A second trader said that he saw the bonds - which had priced at 97 Friday - offered at 97½ early Monday, "but I never saw a bid for them."

Yet another trader quoted them late in the day as no better than straddling their issue price, at 96¾ bid, 97¼ offered.

ONO, Vanguard stay strong

Among the issues that priced late last week and moved up smartly from there in the aftermarket, a trader saw Spanish cable and broadband operator ONO's 10 7/8% notes due 2019 at 104½ bid, 105½ offered - about the same level to which that $225 million of bonds jumped on Friday after having priced earlier in the session at par.

"They were unchanged - but they definitely held onto their gains," he asserted.

A second trader saw those bonds remaining at 104¼ bid, 105 offered.

Nashville, Tenn.-based hospital operator Vanguard Health Systems' zero-coupon senior discount notes due 2016 were meantime at 61½ bid, 62½ offered - actually down a little from Friday's late trading level at 62 bid, 62½ offered, but still well up from the 59.845 level at which those bonds priced late Thursday to yield 10 5/8% and $444.655 million of proceeds.

Indicators remain robust

Away from the new deal world, a trader saw the CDX North American Series 15 HY index up by 3/16 point on Monday to end at 103 7/8 bid, 104 offered, after having gained ¼ point on Friday.

The KDP High Yield Daily index meantime was up by 10 basis points on Monday to close at 75.07, after having been unchanged on Friday. Its yield - which was also unchanged on Friday - rose by 5 bps on Monday to 7.15%.

The Merrill Lynch High Yield Master II index continued to push higher on Monday, gaining 0.158%, versus the 0.068% advance on Friday, when the index came back from a relatively rare downturn the session before.

As of Monday's close, that left the index's year-to-date return at 1.681% - a new peak level for 2011, up from Friday's year-to-date return of 1.521%, the index's previous high-water mark.

Advancing issues led decliners for a second consecutive session on Monday, although only by a couple of dozen issues out of the more than 1,400 which traded Monday. That reduced margin was in contrast to the better than six-to-five advantage that the gainers held on Friday over the losers.

Overall activity, represented by dollar-volume levels, fell by 20% on Monday, after having risen by 11% on Friday from the previous session's level.

A trader said that the overall market tone "remains firm," but he allowed that it was "difficult to find many offered sides, quite honestly - the buyers outnumber the sellers by a pretty good margin still at this time of the year."

A second trader said that he saw "nothing really exciting. It was one of those days that I should have slept in."

He opined that "it seems like the wind has really settled down. We're seeing some trading - but not much movement."

Paper names pop on Smurfit deal

However, a trader said that the paper sector was "the one space today that's probably worth talking about," based on the news that RockTenn Co. has agreed to buy Smurfit-Stone Container Co. for $3.5 billion and will assume some $700 million of Smurfit-Stone net debt and $1.1 billion of pension liabilities.

A second trader said that the news "helps other paper" besides the two companies involved in the transaction. "It sets the market - what people are willing to pay in the industry for things."

He said that that "paper was all up, ½ to 1 point" and quoted NewPage Corp.'s 11 3/8% senior secured notes due 2014 at 99 bid, 99½ offered, up 1 point

Paper and packaging "had a good day" following news of the deal, the first trader said, quoting NewPage's 10% notes due 2012 up 2 points on the day to 63 bid, 64 offered, while the 11 3/8s were in a 99 to 99½ context, up from recent high-90s levels. "It's really helped that space move up."

A second market source called the 10% notes up 2 points on the day at 63 bid, while seeing the Miamisburg, Ohio-based coated-paper manufacturer's 11 3/8s about ¾ point better at 99¾ bid.

Generally, another trader said, "the paper space has been very strong right out of the chute this year. While it is much less liquid, there was a little bit more yield, so we¹ve seen names in the month of January up 3, 4, [even] 5 points." He saw the NewPage 2012 paper end Monday at 631/2, up from 61 on Friday.

The first trader meantime said that Catalyst Paper Co.'s 7 3/8% notes due 2014 had moved up to 83 bid, 84 offered, up from their recent levels around 80-81.

Last week, Catalyst's bonds - which had firmed to around the mid-80s from around 80-81 before on the company's recent announcement of a smallish bond redemption slated for next month - gave up all of those gains and sank back down to around the 80 area.

Another trader quoted Richmond, B.C.-based Catalyst's 11% senior secured notes due 2016 up a point at 101¼ bid, 102 offered, while seeing the 7 3/8s a half-point better at 83. "The bigger ones, the 11s, are a little more active," he said.

As for Smurfit-Stone, a trader said that the Chicago-based cardboard container maker's few remaining bonds - most of its debt was eliminated via the company's Chapter 11 2009-2010 reorganization - were up a point at 6¼ bid, 6¾ offered.

Another trader said that its bond debt had been reduced to just a few stubs left over following the bankruptcy, from which Smurfit-Stone emerged last July. All were just trading in the mid-single-digits. One was the remnant of its 7 3/8% due 2014. He said there were also remnants of its former 8¼% and 8 3/8% notes due 2012, its 7½% notes due 2013 and 8% notes due 2017. "There are various coupons - but they all trade similar."

He said that they had traded in a range of 6¼ to 6¾ "all day long," but then moved up to around 7 towards the end of the day, "up like 1½ points after the deal was announced." He said there "probably a decent amount of trading in those today on the news - a lot of, lot of trading" in that 6-handle context all day. "Then they went a little higher," to trade in a context of 6½ to 71/2, with a few trades around 7 bid going out.

He meantime saw the company's bank debt around 100¾ bid, 101¼ offered.

Norcross, Ga.-based RockTenn's split-rated bonds (Ba2/BBB) meantime were unchanged to slightly lower in restrained trading. "No one was really trading them," one trader said.

Another market source said that there were only a handful of trades in its 9¼% notes due 2016, which eased to 109¾ bid from prior levels at 110 7/8. Meanwhile, no activity was seen in its 8.20% notes slated to come due this Aug. 15, which had last traded earlier this month at 1021/2, or in its 5 5/8% notes due 2013, last traded around the 104 mark, also earlier in the month.

Pep Boys trades around

A trader said that apart from the paper names, the 7½% notes due 2014 issued by The Pep Boys - Manny, Moe & Jack "were pretty active today - and it's not one that trades all that often."

He saw the paper staying in its same recent 102 to 102½ area, unchanged, but with increased volume of over $7 million, with traders dabbling in the Philadelphia-based auto supply chain's paper in response to Friday's news reports that it had hired Bank of America to help it look for a possible buyer, or buyers, for the company. Pep Boys neither confirmed nor denied the speculation, which gave its NYSE-traded shares a boost on Friday, a small part of which it gave back on Monday.

"Volume was much bigger than usual for that name," the trader said, "though the levels were unchanged."

OPTI Canada off

A trader said that OPTI Canada Inc.'s bonds were mostly unchanged to perhaps slightly lower on Monday, quoting the Calgary, Alta. -based oil-sands energy company's 7 7/8% notes due 2014 trading in a 65-66 context, on "decent volume." Within that range, he said that more of the trades took place at the lower end, around 65 to 651/2, which he called "maybe down ½ point," on "some trading" - although there was no fresh news out about the company.

At another desk, those bonds were quoted down 7/8 point at 65 3/16 bid.

Ford, GM drive higher

A trader saw Motors Liquidation Co.'s benchmark 8 3/8% bonds due 2033 - issued when the company was still called General Motors Corp., before its 2009 bankruptcy reorganization - "pretty solid right in that 35 range," with "a decent amount of trading" and most of the transactions going off going off at bid levels between 35¼ and 353/4, tending to the higher end of that range at the end of the day, "so up ½ on a quote."

Another trader pegged the "old GM" bonds at 35½ bid, 36 offered, terming that up ¼ point,

GM reported Monday that its global sales last year came within 30,000 units of beating Japanese rival Toyota - which dethroned GM from its accustomed position as the world's top automaker in 2008, but whose sales have taken a major hit over the past two years because of safety recalls after several well-publicized accidents in which cars apparently accelerated on their own.

Meanwhile a trader saw GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 a half-point better at 108¼ bid, 109¼ offered.

At another desk, those Ford long bonds were seen up nearly a point, as high as 108¾ going home with brisk trading of nearly $20 million, making it one of the most active junk issues of the day.

Cristal Cody contributed to this report

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