Psychiatric Solutions prices deal; Sprint runs up on numbers; Liberty fails to lift DirecTV

By Paul Deckelman and Paul Harris

New York, May 4 - Psychiatric Solutions, Inc. successfully came to market on Monday with an offering mirroring its existing 7¾% senior subordinated notes due 2015, high yield syndicate sources said. After the bonds priced, they were seen having moved up more than a point in initial aftermarket dealings.

Among the new issues which priced in last Thursday's hectic session, the bonds of supermarket operators Supervalu Inc. and Ingles Markets, Inc. were seen continuing to firm.

However, the new issues from Starwood Hotels & Resorts Worldwide, Inc. and Ryland Group Inc., continued to trade no higher than their respective issue prices - and sometimes lower.

Among the established issues, Sprint Nextel Corp.'s bonds pushed higher, given a boost by the Overland Park, Kan.-based wireless telecommunications company's better than expected first-quarter results.

GMAC LLC continued the firming trend seen on Thursday and Friday, when the Detroit-based lender's bonds had risen, sharply on Thursday and a little more moderately Friday, at the prospect that the federal government will give it financial help as GMAC takes over as the main lender for the bankrupt Chrysler LLC.

On the downside, DirecTV Group, Inc.'s bonds were not seen having benefitted from the news that controlling shareholder Liberty Media Corp. will combine the nation's largest satellite TV broadcasting company with some assets currently held by Liberty and spin the combined company off.

Cash bonds closed ½ to ¾ point higher on Monday, according to a high-yield syndicate source.

The primary awakes

The new issue market saw a flurry of activity on Monday.

Psychiatric Solutions, Inc. priced a $120 million issue of mirror notes, which is the smallest deal to clear the primary in nearly a year, according to a market source.

Meanwhile a further quartet of issuers showed up with six tranches of notes that are expected to price by Thursday's close.

Psychiatric Solutions sells small deal

Psychiatric Solutions priced a $120 million issue of notes that mirror its existing 7¾% senior subordinated notes due July 15, 2015 (B3/B-) at 88.75 on Monday.

The non-fungible mirror notes priced at 88.75, on top of price talk. The resulting yield is 10.244%

The deal was multiple-times oversubscribed, in part because it played to strong demand for health care paper, according to an informed source.

The mirror notes priced at a 50 basis points discount to Psychiatric Solutions' outstanding bonds, the source added.

Banc of America Securities, Barclays Capital, Citigroup and JP Morgan were joint bookrunners for the quick-to-market deal.

Proceeds will be used to repay revolver debt.

The original $220 million issue priced at par on June 30, 2005. A $250 million add-on priced at 102.75 to yield 7.184% on May 24, 2007.

The Psychiatric Solutions deal is the smallest deal to clear the primary market since June 18, 2008, when Susser Holdings LLC priced a $30 million add-on to its 10 5/8% notes due December 2013, a market source said.

Teck talks trio of tranches

Canada's Teck Resources Ltd. set price talk on Monday for a quick-to-market three-part offer of senior secured notes.

Although the size of the deal remains to be determined, the total amount of issuance is expected to be benchmark-sized.

The Rule 144A with registration rights deal is comprised of:

• Five-year non-callable notes talked at the 11% area;

• Seven-year notes, non-callable for four years, with price talk in the 11 3/8% area; and

• 10-year notes, non-callable for five years, with price talk in the 11¾% area.

The order book is scheduled to close at 10 a.m. ET on Tuesday. Pricing is expected at mid-day Tuesday.

JP Morgan, Banc of America Securities LLC and Citigroup are joint bookrunners.

Mid-double B credit ratings are expected.

Proceeds will be used to repay the bridge credit facility.

Silgan for Tuesday

Meanwhile Silgan Holdings Inc. will host an investor call at 9 a.m. ET on Tuesday for its $200 million offering of seven-year senior notes (Ba3).

The deal is expected to price Tuesday afternoon.

Banc of America Securities, Deutsche Bank Securities and Morgan Stanley are joint bookrunners.

Proceeds will be used to repay installments of the company's existing term debt.

Brief roadshows

Elsewhere Nalco Holding Co. launched a $300 million offering of eight-year senior unsecured notes on Monday.

The order book is expected to close Tuesday afternoon, with pricing set for Wednesday.

Deutsche Bank Securities, Banc of America Securities and HSBC are joint bookrunners.

Nalco is concurrently in the market with a $500 million bank loan.

Proceeds will be used to repay bank debt.

And Inverness Medical Innovations, Inc. began a roadshow for its $200 million offering of seven-year senior subordinated notes (B3/B-).

The roadshow wraps up on Wednesday, and the deal is expected to price on Thursday.

UBS Investment Bank is the left lead for the general corporate purposes deal from the Waltham, Mass.-based developer of medical diagnostic devices. Goldman Sachs & Co. and Banc of America Securities LLC are joint bookrunners.

Psychiatric Solutions gains in trading

When the new Psychiatric Solutions bonds were freed for secondary dealings, a trader said that they "did OK" on the break, quoting them at 90¼ bid, 91¼ offered, well up from 88.75 at the pricing.

Another trader saw the bonds going out at 90¼ bid, 91¼ offered.

"People were crazy for them," a market source quipped.

Another trader said that he had not seen the new bonds - but noted that the existing tranche of notes had been trading at around 91½ bid, up from 91 on Friday.

Supervalu, Ingles keep gaining

Among recently priced issues, Eden Prairie, Minn.-based national supermarket giant Supervalu's 8% notes due 2016 were seen by a trader continuing to firm from the initial aftermarket levels seen on Friday. The company's $1 billion of bonds - upsized from the originally planned $500 million - had priced Thursday at 97 to yield 8.58%, but which had moved up to around the 98 bid, 98½ offered mark on Friday. The trader saw them going out on Monday having firmed further to 98¾ bid, 99 offered.

Another trader saw the bonds at 98¾ bid, 99¼ offered, with $20 million changing hands.

Meanwhile, Black Mountain, N.C.-based regional grocery chain Ingles Markets' new issue of 8 7/8% notes due 2017 also managed to build on their initial gains. The $575 million tranche - upsized from $500 million originally - had priced at 96.548 on Thursday to yield 9½%, and then had moved up to around the 98 mark on Friday.

A trader saw them Monday at 98½ bid, 99 offered, while a second pegged them at 98 5/8 bid, 98 7/8 offered in over-the-counter dealings.

Ryland, Starwood continue struggles

A trader said that Calabasas, Calif.-based homebuilder Ryland Group's new 8.40% notes due 2017 "continued to struggle around their new issue price." Those $230 million of bonds, upsized slightly from the initially planned $225 million, priced Thursday at 98.006 to yield 8¾%; in Friday's dealings, they were seen having slipped to a little below their issue price at 97½ bid, 98 offered. On Monday, a trader said, the bonds had gotten back up to 98 bid, 98¼ offered, while another, quoting them at 98, called that unchanged from Friday.

One of the traders saw Starwood Hotels' new $500 million issue of 7 7/8% notes due 2014, which priced at 96.285 on Thursday to yield 8¾%, also continuing to trade below their issue price. He saw the bonds at 95¼ bid, 95¾ offered.

At another desk, a trader saw the White Plains, N.Y.-based international lodging giant's notes having crept back up to a round-lot level of 96 bid - up perhaps a point from 95 bid, 95½ offered on Friday, but still well below their issue price.

Market indicators keep gaining

A trader saw the CDX Series 12 High Yield index - which had eased by 3/8 point on Friday - up a full point Monday to 79½ bid, 80 offered.

Meanwhile, the KDP High Yield Daily Index, which had gained 39 basis points on Friday, advanced another 33 bps on Monday to 59.13, while its yield tightened by 9 bps to 11.69%.

Advancing issues for a fourth straight session easily led decliners, expanding their bulge to a better than two-to-one margin.

Overall market activity, measured by dollar-volume totals, rose by 4% from Friday's levels.

A trader said that "once again, there was a positive tone" evident in Junkbondland. "There certainly were more buyers than sellers, people more comfortable with the risk."

As evidence of the better tone, he noted the fact that frequent market barometer Community Health Services Inc.'s 8 7/8% notes due 2015 had advanced to 99 1/8 bid from Friday's levels at 983/4. Some $9 million of the Franklin, Tenn.-based hospital operator's bonds changed hands.

Among other frequently quoted bellwether issues, Greenwood Village, Colo.-based financial transaction processor First Data Corp.'s 9 7/8% notes due 2015 traded $19 million - but were unchanged at 68¼ bid.

Philadelphia-based food-service operator and uniform provider Aramark Corp.'s 8½% notes due 2015 gained ¾ point to end at 963/4, though on only $2 million traded.

Sprint springs ahead

One of the biggest movers was Sprint Nextel, with a trader punning that the telecom provider "sprinted across the finish line" with solid gains on most of its bonds following better than expected first-quarter numbers. Some of the Sprint paper was "up by multiple points."

He saw its 6% notes due 2016 gain 2 points on the day to end at 85 bid, on volume of $22 million, while its 7 3/8% notes due 2015 had "quite a pop" up to 77 bid, from 72¾ on Friday, with $20 million traded. "There are all big issues, with lots of holders."

The company's 6 7/8% notes due 2013 jumped to 82 bid from 771/2, on $16 million traded, while the Sprint Capital Corp. 8¾% bonds due 2032 rose to 81 bid from 76½ previously, on $17 million of turnover.

Sprint Capital's 7 5/8% notes due 2011 rose 1½ points to 98 bid, on mid-afternoon volume of over $12 million.

Sprint's New York Stock Exchange-traded shares meantime gained 33 cents on the day, or 7.07%, to end at an even $5, on volume of 96.9 million shares traded, over twice the norm.

The Sprint bonds and shares moved up after the company reported first-quarter numbers that were not quite as bad as had been expected. While the net loss widened to $594 million, or 21 cents per share, versus a loss of $505 million, or 18 cents per share, a year ago, excluding one-time charges, Sprint said its profit came to 3 cents per share, a much better level than the 4 cents ex-items loss that Wall Street was expecting.

While Sprint continued to hemorrhage valuable postpaid customers, who have regular monthly contracts and are a steady and desirable source of revenue, it largely made up for that loss with unexpectedly strong gains among pre-paid subscribers, particularly for its Boost Mobile service, which began offering unlimited calling, texting and data services for $50 a month during the quarter. Sprint managed to add 764,000 prepaid customers on its iDEN walkie-talkie-like network, a much stronger gain than expected, and 394,000 wholesale and affiliate subscribers.

Company executives said on the conference call that followed the release of the numbers that while reducing churn, or customer turnover, among the more valuable postpaid subscribers was a priority, they said that Sprint was poised to continue to pick up prepaid subscribers, given the shaky economy that has made pre-paid phone service a more viable option for consumers. They projected likely smaller annual subscriber losses this year than the than the 4.6 million lost in 2008.

DirecTV a dud despite Liberty news

Also in the communications constellation, DirecTV Group's bonds were seen having gotten "no lift at all," a trader said, from the news that controlling shareholder Liberty Media will combine some of its assets with the El Segundo, Calif.- based top U.S. satellite TV company and will then spin the combined company off.

A trader saw DirecTV's 8 3/8% notes due 2013 at 101 bid, down from 102 on Friday, while its 6 3/8% notes due 2015 lost ¾ point to end at 93¾ bid. Its 7 5/8% notes due 2016 dropped to 97½ from 98¾ previously.

At another desk, a market source pegged the 6 3/8s down as much as 3 points on the day at the 93 level.

The deal announced by Liberty Media will give DirecTV assets that would enhance the offerings of its satellite TV operations. It will receive regional sports networks in Seattle, Denver and Pittsburgh, plus a 65% stake in the Game Show Network and FUN Technologies, a provider of online sports games and information.

Liberty Media's chairman and controlling stockholder, billionaire mogul John Malone, will have a 24% voting stake in the new company about half the size of the 48% Liberty now holds. Malone will retain his current position as chairman of DirecTV.

GMAC, Ford bonds continue to firm

A trader saw Ford Motor Co.'s bonds continuing their recent climb, with the 7.45% paper due 2031 up another point at 52 bid, 54 offered.

The bonds of the Number-Two domestic carmaker have been climbing smartly for the last two weeks on investor perceptions that Ford will manage to survive the current automotive downturn as an intact company not needing a federal bailout, unlike rivals General Motors Corp. and Chrysler LLC.

However, another trader saw the bonds fall to a level of 52½ bid from a round-lot level of 55 on Friday, although he said there were less than $1 million of the bonds traded.

He did, on the other hand, see Ford Motor Credit Co.'s 7 3/8% notes coming due on Oct. 28 firm to 97 bid, or a 14% yield to maturity, up ½ point, on $7 million traded.

But at another desk, a market source marked the credit arm's bonds down as mixed on the day. While the 7 7/8% notes due 2010 pushed up by more than 4 points on the day to end at 93.5 bid, its 7% notes due 2013 dropped 3 points to close at 74, while its 12% notes due 2015 were down more than 2 points to the 86 level.

A trader meantime saw GM's benchmark 8 3/8% bonds due 2033 fall by a point on the day to 8 bid, on $6 million traded, although he saw its 7.20% bonds due 2011 actually gain a point to end at 9½ bid, though on only $2 million traded.

Another trader said the GM benchmarks were down ¼ point to finish at 7¾ bid, 8¾ offered, while GM's 8¼% bonds due 2023 retreated by 1½ points to close just under 7 bid.

One of the traders also saw GMAC's bonds mixed, after the big run-up late last week on the news that the federal government will aid the 49% GM owned auto-finance unit so that it can assume the role of lender to bankrupt Chrysler's dealers and car buyers.

He saw GMAC's 8% bonds due 2031 firm to 641/2, a 2 point gain from 62½ on Thursday, and up another 1¼ point from Thursday's finish at 611/4. Some $5 million of the bonds changed hands.

But he saw GMAC's 7¾% notes due 2010 go home at 92 bid, down from 94½ on Friday, with $9 million changing hands.

Another market source saw the GMAC 7¾% notes due 2010 dip 3 points on the day to 91 bid.

Residential Capital LLC, a wholly owned GMAC subsidiary, rose for a second straight session Monday in line with its parent's mostly firmer levels. ResCap's 8 7/8% notes due 2015 were 2 points better at 44 bid.

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