New deals still flood in; CHC, Windstream, Freescale priced; Rite Aid dips before earnings

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., Sept. 22 - New issues continued to dominate the high-yield arena on Wednesday, but secondary names were seen making a comeback - at least trading-wise.

But even as the bulk of the new issues continued to do well - Whiting Petroleum Corp. was unchanged, but active and GenOn Escrow Corp. regained some ground - others were not faring as well. Windstream Corp. priced its new deal at par on Wednesday, but a trader said the bonds were "struggling" to gain momentum.

Freescale Semiconductor, Inc. also priced a new issue. The deal was upsized shortly before hitting the market to $750 million from $500 million. The entrance of the new paper also helped the company's older pieces of paper head higher.

Away from the glut of new issues, Rite Aid Corp. was one of the day's more active credits, as the company prepared to file its quarterly report. However, the debt was seen trading down, though a trader said the market expected to see "decent" numbers.

Though it comes as no surprise, Blockbuster Inc. is reported to be readying a bankruptcy filing "within minutes," as one trader put it. The company is expected to file by the end of the week, causing the bonds to drop another couple of points.

CHC prices $1.1 billion

Seven issuers raised $3.434 billion and €300 million with a combined seven tranches of junk, on Wednesday.

CHC Helicopter SA priced a $1.1 billion issue of 9¼% 10-year senior secured notes (B1/B+) at 98.399 to yield 9½%.

The yield printed at the wide end of the 9¼% to 9½% price talk.

Morgan Stanley, HSBC, RBC Capital Markets and UBS Investment Bank were the joint bookrunners.

Proceeds will be used to repay all outstanding debt under the company's existing senior credit facilities and to pay breakage fees on interest rate swaps.

Freescale massively upsized

Freescale Semiconductor priced a massively upsized $750 million issue of 10-year senior unsecured notes (Caa2/CCC) at par to yield 10¾%.

The yield printed on top of the price talk.

Citigroup ran the books for the quick-to-market deal which was upsized from $500 million.

The Austin, Texas-based semiconductor company will used the proceeds to repurchase a like amount of its existing senior unsecured notes due 2014.

In fact, one of the big drivers of Wednesday's Freescale deal involved buy-siders who were being taken out of the 2014 paper, and were rolling into the new 2020 notes.

NBTY up 4 on break

Elsewhere, Alphabet Merger Sub, Inc., to be merged with and into NBTY, Inc., priced a $650 million issue of eight-year senior notes (B3/B) at par to yield 9%.

The yield printed at the tight end of the 9% to 9¼% price talk.

Bank of America Merrill Lynch, Barclays Capital Inc. and Credit Suisse were the joint bookrunners.

Proceeds, together with new bank debt and equity contributions from the Carlyle Group, will be used to help fund the leveraged buyout of the company by Carlyle and repay existing debt.

The deal shot up 4 points on the break, a trader said.

Windstream brings drive-by

Windstream priced a $500 million issue of 10-year senior notes (Ba3/B+) at par to yield 7¾%.

The yield printed on top of the price talk.

Bank of America Merrill Lynch, Barclays Capital, Citigroup, JP Morgan, RBS Securities and Wells Fargo Securities were the joint bookrunners.

The Little Rock, Ark.-based provider of telephone and internet services will use the proceeds, together with cash on hand, to fund the acquisition of Q-Comm, an Overland Park, Kan.-based fiber transport and local exchange carrier.

Exopack taps 11¼% notes

Exopack Holding Corp. priced a $100 million add-on to its 11¼% senior notes due Feb. 1, 2014 at 101.656 to yield 10.639%.

There was no official price talk.

Goldman Sachs & Co. ran the books for the quick-to-market debt refinancing deal.

The company, which is headquartered in Spartansburg, S.C., priced the original $220 million issue in January 2006.

Rhodia, Picard price blowout deals

The European primary market saw activity on Wednesday.

France's Rhodia SA priced a $400 million issue of 10-year senior notes (B1/BB) at par to yield 6 7/8%, at the tight end of the 7% area price talk.

Credit Suisse and Credit Agricole CIB were the joint bookrunners for the debt refinancing deal.

Elsewhere, Picard Bondco SA, a financing unit of France's Picard Group SA, priced a €300 million issue of eight-year senior notes (B3/B-/B-) at par to yield 9%.

The yield printed at the tight end of the 9% to 9¼% price talk.

Credit Suisse, Citigroup, Morgan Stanley and Credit Agricole CIB were the joint bookrunners for the acquisition financing.

Both of the French deals were blowouts, according to a syndicate banker.

Hapag-Lloyd to sell $500 million

From elsewhere in Europe, German container shipping firm Hapag-Lloyd AG began marketing a $500 million equivalent offering of high-yield senior notes on Wednesday.

The European roadshow, which runs this week, will include stops in London, Frankfurt and Paris.

A roadshow will get underway in the United States next week.

The offering will be made in dollars and euros, and will be structured into a five-year tranche with three years of call protection and a seven-year tranche with four years of call protection.

Deutsche Bank, Citigroup, Credit Suisse, Goldman Sachs, JPMorgan and UniCredit are managing the debt refinancing deal.

Affinion marketing $325 million

Affinion Group Holdings, Inc. is in the market with a $325 million offering of five-year senior notes (expected ratings Caa1/B-).

The deal will be presented on an investor roadshow which is expected to run into the middle part of the week ahead.

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

Proceeds, together with cash distributions from Affinion Group, Inc., to repay Holdings' senior unsecured term loan and for general corporate purposes.

TPC starts roadshow

Elsewhere TPC Group LLC began a roadshow on Wednesday for a $325 million offering of seven-year senior secured notes (B1//).

The roadshow travels the U.S. West Coast this week, and moves to the East Coast during the week ahead.

Deutsche Bank Securities and JP Morgan are the joint bookrunners.

The Houston-based petrochemical company will use the proceeds to repay all of its outstanding term loan debt and to fund a distribution to parent TPC Group Inc. for general corporate purposes, which may include dividends, stock repurchases or other returns of capital to its stockholders.

Brief roadshow for Titan

Finally, Titan International, Inc. began a brief roadshow on Wednesday for a $175 million offering of seven-year senior secured notes (B1/B).

The deal is expected to price on Friday or Monday.

Goldman Sachs & Co. has the books.

Proceeds will be used to finance a tender for the company's 8% senior unsecured notes due 2012, with any remaining proceeds for general corporate purposes, including financing potential future acquisitions and repayment of other existing obligations.

Market indicators end softer

Market indicators ended the session lower on the day, according to market sources.

The KDP High Yield Daily index fell 2 basis points to 72.89 from 72.91 previously. However its yield held steady at 7.80%.

The CDX North American HY Series 14 index meantime slipped 3/8 of a point to 98¼ bid, 98½ offered.

Most new issues firming...

There continued to be "lots and lots of new issues" flooding the marketplace, a trader said.

"It's definitely been fun," he enthused.

Most of the recent new deals continued to do moderately well. Whiting Petroleum's new 6½% senior subordinated notes due 2018, for example, continued to be an active trader. One trader said the bonds closed unchanged on the day at 101 bid, 101½ offered.

The bonds were priced at par.

Also, GenOn Escrow's recent $1.225 billion two-part offering - which included $675 million of 9½% notes due 2018 and $550 million of 9 7/8% notes due 2020 - moved back up after falling upon entering the market.

A trader said the new bonds had fallen to levels around 95½ on Tuesday. Come Wednesday, he saw them trading closer to the original issue prices, between 97 and 98.

Others not so much

Other deals, however, were having trouble gaining momentum.

Windstream's new $500 million issue of 7¾% senior notes due Oct. 15, 2020 hit the market at par on Wednesday. A trader said the issue was "the second deal to struggle bit," seeing the notes holding around its pricing level.

The Little Rock, Ark.-based communications company intends to use proceeds from the offering to finance its previously announced acquisition of Q-Comm Corp.

Fitch Ratings gave the new issue a BB+ rating, while Standard & Poor's gave the paper a B+ with a recovery rating of 5.

Freescale deal priced

Freescale Semiconductor's new deal was announced Wednesday and soon upsized to $750 million from $500 million.

The 10-year notes were priced at par with a 10¾% yield.

It is expected that the Austin, Texas-based chipmaker will use the proceeds to buy back 2014 maturities. Moody's Investors Service issued a Caa2 rating on the new debt.

The anticipation of the new issue resulted in solid gains for the company's older paper and specifically in the 8 7/8% notes due 2014.

One trader called the issue up 3 points at par 1/4. Another trader echoed that number, adding that a "big hunk" of the bonds changed hands during the trading day.

The second trader also saw about "$15-odd million" of the 10 1/8% notes due 2016 at 891/2, up 1½ points, and the 9 1/8% notes due 2014 at par.

Rite Aid dips pre-earnings

Rite Aid's debt fell "a point across the board," according to one trader.

He said the decline in the Camp Hill, Pa.-based drugstore chain's paper was "interesting" as there was "some expectation of decent numbers" on Thursday.

The most active issue was the company's 7½% notes due 2017, he said. The notes fell over a point to end around 92, with some "$20-odd million" changing hands.

The 10 3/8% notes due 2016 meantime lost "a solid point" to close around 1041/2, while the 8 5/8% notes due 2015 dropped "almost 2 points" to 861/4.

Another source saw the 8 5/8% notes at 86¼ bid, down 1¾ points.

Rite Aid will release its second-quarter results before the market opens on Thursday and analysts polled by Thomson Reuters expect to see a loss of 17 cents per share on $6.19 billion in revenue.

In the second quarter of fiscal 2009, Rite Aid posted a loss of $120.4 million, or 14 cents per share, on revenues of $6.3 billion.

Blockbuster to file soon

Word that a bankruptcy filing was imminent sent Blockbuster's bonds down, traders reported.

At one shop, the 9% notes due 2012 were seen at 4½ bid, 5½ offered, down "another 1½ to 2 points." The 11¾% notes due 2014 were "a little lower too, like a point or two," at 51 bid, 53 offered.

Another trader saw the 9% notes around 51/2, which he said was down 1½ points on the day and about 3 points softer on the week. However, he pegged the 11¾% notes much lower at 48 bid, 49 offered. He said that level was 5 points weaker than those seen on Monday.

The Dallas-based movie rental chain had previously warned of a potential bankruptcy filing as talks with creditors failed to bring about an out-of-court restructuring.

The company missed a coupon payment in July on its 11¾% notes and then on the 9% notes on Sept. 1. Blockbuster is currently operating under a forbearance agreement, which expires on Sept. 30, next Thursday.

Broad market mostly lower

Among other actively trading issues were Harrah's Entertainment Inc.'s 10% notes due 2018.

A trader said the bonds fell a point to close at 79.

In the autosphere, Ford Motor Co.'s 7½% notes due 2012 were "down small" around 106, while the 8 1/8% notes due 2020 slipped a deuce to 1143/4.

At another desk, Ford's benchmark 7.45% notes due 2031were seen declining a point to par bid, 101 offered.

That trader also saw General Motors Corp.'s 8 3/8% notes due 2033 dipping almost ½ point to 32½ bid, 33½ offered.

Meanwhile, Bon-Ton Stores Inc.'s 10¼% notes due 2014 were "pretty busy," a trader said, and higher around 97.

NewPage Corp.'s 10% notes due 2012 inched up to levels around 52, the trader also said

In the financial space, Nuveen Investments Inc.'s 10½% notes due 2015 finished "kind of unchanged" at 991/2.

And, CIT Group Inc.'s 7% notes due 2016 dropped over a point, ending at 98¼ bid.

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