Downsized Regency prices, NewMarket also; Primedia up on asset sale; funds see $266 million inflow

By Paul Deckelman and Paul A. Harris

New York, Dec. 7 - Regency Energy Partners LP priced a downsized offering of seven-year notes Thursday, which then moved up slightly in aftermarket trading. Also pricing was NewMarket Corp.'s 10-year notes deal, which also edged higher when it was freed for secondary dealings. Georgia-Pacific Corp. was heard by primary market sources to be getting ready to sell a $1 billion offering of eight- and 10-year senior guaranteed notes next week, while another mega-deal, this one a euro-denominated four-part offering from Greek telecommunications company TIM Hellas, was seen getting ready to hit the road early next week for marketing to potential investors.

Price talk was meantime heard on upcoming deals for Geokinetics Inc. and Buffalo Thunder Development Authority.

Among the established issues, Primedia Inc.'s bonds improved on the news that the New York-based magazine publisher had agreed to sell a package of 17 outdoor-oriented titles for $170 million, with proceeds from the deal expected to go to balance-sheet improvements.

From the distressed-debt markets came word that Winn-Dixie Stores Inc.'s bonds had pushed up to above-par territory, in line with hefty gains in the restructuring Jacksonville, Fla.-based supermarket operator's new when-issued stock. Just a month ago, those bonds had been languishing around 75 bid.

Another distressed name seen as a big mover was Delphi Corp., whose bonds rose solidly for a second consecutive session, pushed up by the news that the bankrupt Troy, Mich.-based automotive components supplier had inked contracts for a robust $3.3 billion of steering and halfshaft sales during the first half of the year - and fully expects to record even more sales by year's end.

The broad high yield market felt firm on Thursday to a sell-side source who spoke to Prospect News well after the session closed.

Funds back in the black

And as activity wound down for the day, market participants familiar with the weekly high yield mutual fund flow numbers compiled by AMG Data Services of Arcata, Calif., told Prospect News that in the week ended Wednesday, $266.6 million more came into the funds than left them.

That broke a two-week losing streak during which net outflows from the funds had totaled some $274 million, including a $248.8 million bleed during the week ended Wednesday, November 29, according to a Prospect News analysis of the AMG figures.

That analysis shows that even though a negative trend has been effect so far this year, including the previous two weeks, over the past roughly five months inflows have held sway, totaling about $786 million, with 13 such infusions seen in the last 23 weeks.

The latest inflow, among funds that report to AMG on a weekly basis, reduces the year-to-date net redemptions to negative $2.908 billion.

Meanwhile the funds that report on a monthly basis have seen $745 million of inflows for the most recent period, extending their year-to-date net inflows to $4.967 billion.

Hence the year-to-date aggregate flows, which factor both the weekly reporters' outflows and the monthly reporters' inflows, stood at slightly less than $2.060 billion at the Wednesday close.

Two new deals

Two tranches from two issuers were priced in the primary market, generating $700 million of proceeds. One came on the tight end of price talk while the other priced on the wide end of talk.

Meanwhile the late 2006 march of billion dollar (and billion euro) deals continued as Georgia-Pacific announced plans to price $1.0 billion next week while TIM Hellas Communications said it plans to do €1.4 billion the week after.

Regency completes $550 million deal

Regency Energy Partners LP in conjunction with Regency Energy Finance Corp. priced a downsized $550 million issue of seven-year senior unsecured notes (B2/B) at par to yield 8 3/8%, at the wide end of the 8¼% to 8 3/8% price talk.

UBS Investment Bank, Lehman Brothers and Wachovia Securities were joint bookrunners for the debt refinancing deal from the Dallas-based midstream energy partnership.

NewMarket tight to talk

Meanwhile NewMarket Corp. priced a $150 million issue of 10-year senior notes (B1/BB) at par to yield 7 1/8%, on the tight end of the 7¼% area price talk.

Credit Suisse was bookrunner for the chemical firm's debt refinancing.

Georgia-Pacific rolls out a billion

Throughout the week sources had been telling Prospect News that Georgia-Pacific would do $1.0 billion of bonds. And on Thursday the deal appeared more or less as those sources had scripted it.

The Atlanta paper and building products company will roadshow its senior guaranteed notes on Monday and Tuesday, and will hold an investor call on Monday.

The offering is comprised of tranches maturing in January 2015, non-callable for four years, and January 2017, non-callable for five-years. Tranche sizes remain to be determined.

Banc of America Securities, Citigroup and Deutsche Bank Securities are joint bookrunners for the debt refinancing deal, with Banc of America Securities as left lead.

TIM Hellas' €1.4 billion

A roadshow is scheduled to get underway on Tuesday for a €1.4 billion four-part notes offering from TIM Hellas Communications.

The Athens, Greece-based telecommunications company plans to sell €1.1 billion in tranches of fixed- and floating-rate notes due January 2015.

In addition TIM Hellas plans to sell €200 million of PIK notes due July 2015.

The company also plans to bring a €100 million add-on to its three-month Euribor plus 350 basis points senior secured floating-rate notes due Oct. 15, 2012. The original €925 million priced at par Sept. 30 2005. Subsequently in January 2006 Hellas priced a €200 million add-on, after which the total size of the issue was €1.125 billion.

The four-tranche deal is expected to price during the week of Dec. 18 via Deutsche Bank Securities, JP Morgan, Lehman Brothers and Morgan Stanley, with proceeds slated to refinance debt and fund a dividend.

Talking the deals

Two issuers are expected to complete transactions by the Friday close.

China Fishery Group Ltd. has talked its $200 million offering of seven-year senior notes (B1) at a yield in the 9 3/8% area.

HSBC has the books.

Elsewhere Buffalo Thunder Development Authority, a special-purpose vehicle of the Pueblo tribe of Pojoaque, N.M., talked its $245 million offering of eight-year senior secured notes (B2/B) at 9½% to 9¾% on Thursday.

Merrill Lynch is the bookrunner.

And looking ahead to next week, Geokinetics Inc. talked its $100 million offering of second-priority senior secured floating-rate notes (B3/CCC+) at three-month Libor plus 650 basis points area on Thursday.

RBC Capital Markets is the bookrunner.

Regency, NewMarket deals edge up

When the new Regency Energy 8 3/8% notes due 2013 were freed for secondary dealings, they didn't get very far, a trader said, closing at 100.25 bid, 100.75 offered, up a little from their par issue price earlier in the session.

Another trader saw a similar weak trajectory for the new 7 1/8% notes due 2016 issued by NewMarket, which also priced at par, and then got no better than 100.25 bid, 100.5 offered in the aftermarket.

Ford converts up, bonds down

Junk market activity was also impacted by another pricing - this one Ford Motor Co.'s mammoth $4.5 billion issue of 4¼% convertible notes due 2036. The auto giant's giant new deal came at par and then "traded at a [10]4-handle for most of the day," a trader said, "before it sank back to close at 103.75 at the end of the day."

While the new convertible bonds sizzled, Ford's existing junk debt pretty much fizzled, traders said, with one seeing its flagship 7.45% notes due 2031 down a point at 78 bid, 79 offered.

Another saw those bonds essentially unchanged at 78.5 bid, 78.5 offered. Ford's 7½% notes due 2026 were 1¼ point lower, while its Ford Motor Credit Co.'s 7% notes due 2013 were ½ point lower on the day at 96.25. The financing arm's 9.30% notes due 2030 lost a point to 89.25.

Primedia gains on asset sale

Primedia's bonds were seen up around 2 points on the session, encouraged by the asset-sale news.

A trader - while acknowledging that there had not been that much activity in the name - did see the company's 8% notes due 2013 open at 94 bid, 94.25 offered, and then "move up a couple" of points after the news hit to close at 96.25 bid.

Primedia's 8 7/8% notes due 2011, which had closed at 98.75 bid, 99.25 offered on Wednesday, opened a little higher, at 99.5 bid, and ultimately pushed up to 100.75 bid, 101 offered.

The company said that it was is selling its hunting, fishing and outdoor titles, including such publications as Guns & Ammo and Game & Fish, to private equity firm InterMedia Partners LP for $170 million in cash. Besides the 17 publications, the company is also selling related web sites, TV and radio programming and events.

Primedia said that the sale would be "an incremental and positive step toward our goal of improving our balance sheet and reducing our financial leverage."

It was the latest of a number of sales by Primaedia of titles which it deemed to be non-core assets ripe for monetization via their sale. In recent years, Primedia has sold off a number of its other titles, such as New York, Chicago, American Baby and Modern Bride.

DirecTV little moved on Liberty news

Elsewhere in media-land, a trader said that DirectTV Group Inc. was "in the news, with Liberty Media and all of that stuff, but they really, unfortunately didn't go anywhere on that news."

He saw the company's 6 3/8% notes due 2015 down ½ point to 96.5 bid, 97.5 offered.

News reports said that News Corp. had agreed to the framework of a deal with Liberty Media under which Rupert Murdoch's TV and publishing empire would swap its 39% interest in DirecTV - the El Segundo, Calif.-based satellite broadcasting industry leader - to Liberty, which would in turn repatriate its 19% voting stake in News Corp., strengthening billionaire mogul Murdoch's control of his company.

Winn-Dixie a winner

Winn Dixie Stores bonds apparently have no ceiling, with the recently robust bonds gaining another 2 points Thursday to a "mind-numbing level" of 102 bid, 102.5 offered, as one bond trader put it.

"You can't slow these things down," another said, in seeing the continual rise on the bonds, which were trading around the 75 level just one month ago. "Who would have ever guessed that they would run up?"

Fueling the price rise on the bonds is the rise in Winn-Dixie shares, which gained over 4% to $15.99 on Thursday, as bondholders will get public stock in the grocery chain's post-bankruptcy distribution, which is expected by year-end.

Delphi doesn't disappoint

In the automotive realm, Delphi was continuing to cruise on news the day before of $3.3 billion of new business contracts for its steering shaft unit, which the company has earmarked for divestiture.

Bondholders were "very excited" about the news, traders said, as the revenue stream of the unit is a fair gauge of what it would bring in a sale.

Delphi's 6.55% notes due 2006 rose to 110 bid, 111 offered from 106 bid, 107 offered while a similar gain was seen in the 6½% notes due 2009 and 2013, which were pegged at 109.25 bid, 110.25 offered.

The 7 1/8% notes due 2029 were the biggest gainer, moving up to 111.25 bid, 112.25 offered from 104 bid, 105 offered - astonishing levels for the bonds of a company in the throes of Chapter 11 with no clear emergence date in sight.

Remy keeps rolling

Elsewhere among auto names that have so far escaped the bankruptcy route, Remy International Inc.'s bonds were better and whether it was due to outright buying or short covering was unknown but one holder of the issue foresees a devastating short squeeze coming for those shorting the bonds - a position he described as huge - if the company forestalls a bankruptcy filing with an asset sale.

Traffic in the Anderson, Ind.-based automotive electronics manufacturer's bonds remains heavy amid the ongoing two-pronged debate about whether it will file bankruptcy and, if an asset sale is made regardless of a filing, what debt issues might be taken out.

Remy's floaters and the 8 5/8% notes due 2007 gained Thursday - with the floaters adding a half-point or so at 95.5 bid, 96 offered and the 8 5/8s up 1.5 point to end at 86.5 bid, 87 offered - but an important caveat is the hefty short positions in those bonds.

Both are said to have big short positions among holders, many of which are betting that even if the company uses proceeds from an asset sale to pay down one of those issues, the company will eventually file bankruptcy.

"We think that even if they make an asset sale, they will file bankruptcy later on down the road," said one trader.

"I mean, the company is not in good condition and one asset sale is not going to save it. But if they were to pay off the 8 5/8s instead of the floaters that would be very bad for the floaters."

Tennenbaum Capital Partners, LLC recently establishing a big position in Remy bonds has driven all the Remy paper higher in the past week or so, and traders said Thursday there continues to be buying interest in Remy bonds. But one holder surmised there could be a dramatic surge if short covering sets in.

"A significant, no huge, amount of the bonds are shorted, betting against Tennenbaum" and the other handful of holders with a big stake, remarked a buysider.

"The guys shorting the bonds are betting on an imminent [bankruptcy] filing. There is not an imminent filing. But we are coming to a place where something is about to happen."

He estimated those shorting the bonds are paying as much as 30 points on their position.

"It will be a disaster for the shorts if there is an asset sale with the proceeds to take out the December 2007 bonds," he said.

Remy hired Rothschild Inc. in Nov. 10 to lead a refinancing effort, which, instead of appeasing bondholders, rather accelerated market chatter that the company is on the verge of bankruptcy.

Movie Gallery keeps moving up

In another refinancing story, the Movie Gallery Inc. bonds also continued to gain ground as refinancing chatter leans toward reworking the bank debt over a debt for equity swap out, along with some lingering speculation of a merger with competitor Blockbuster Inc. and/or online movie retailer Netflix Inc. The 11% notes due 2012 added another point to 78.25 bid, 79.25 offered, after a 3-point gain Wednesday.

"There's still a buyer for the Movie bonds," said one trader. "I thought we might see some heavy profit taking but that wasn't the case. There is still plenty of room for this one."

Another trader said that generally, speaking, "everything in the market was up today. There's no liquidity. It's [ticking] me off, and everyone else. It's tough."

He went on to explain that "everyone is very grabby," in buying up paper in the secondary. "It's the end of the year, and they're trying to put some money to work, I don't know why. It seems like they're trying to do something ahead of the correction - but I could be wrong."

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