Virgin Media, Norwegian Cruise Lines price deals; Triumph, Landry's Restaurants slate offerings

By Paul Deckelman and Paul A. Harris

New York, Nov. 4 - Virgin Media Inc. successfully priced a solidly upsized, two-part, dual-currency offering of 10-year bonds on Wednesday, high yield syndicate sources said. When the New York-based provider of U.K. television services' bonds finally emerged in the aftermarket, a trader said, they initially firmed - but then gave back some of those gains.

That was also the story with Norwegian Cruise Lines, whose new 11¾% senior secured notes due 2016 likewise priced, moved up - but then also surrendered much of their early advance.

The traders saw lackluster dealings in some of the other recently priced issues, including Tuesday's new deals from Cott Beverages Inc., Netflix Inc. and Colt Defense LLC.

Meanwhile, new deals were announced by Landry's Restaurants Inc. and Triumph Group, Inc.

Apart from the new-deal world, traders said that Junkbondland was largely quiet and featureless - one called it "a strange day."

There was a sharp fall-off in activity in CIT Group Inc. paper, which had been one of the most actively traded names over the previous few days, in the immediate aftermath of the company's Chapter 11 filing.

However, there was some brisk trading in DirectTV Holdings LLC, ahead of the Thursday's scheduled release of third-quarter earnings results by its corporate parent, El Segundo, Calif.-based satellite TV broadcaster DirecTV Group Inc.

Junk failed to get the lift that U.S. equities enjoyed through the first part of Wednesday's market session, a syndicate banker in New York said shortly after the close.

However, as equities slumped towards session lows during Wednesday afternoon heading into the close, the bid for high yield faded as well, the source added.

All in all, high yield has not felt good all week, the syndicate official commented, adding that the volatility in the stock market registered an impact in junk as well.

What's more, there are some anecdotal indications that the run of weekly inflows seen by the high-yield mutual funds - 10 straight positive inflows - might come to an end when AMG Data Services reports its weekly funds flows numbers on Thursday.

That being said, a high-yield mutual fund manager who watches flows on a day-to-day basis was looking for an outflow last week. However when the AMG number appeared for the week to Oct. 29 it was positive $207 million.

Virgin Media massively upsizes

Virgin Media Finance plc priced $600 million and £350 million of 10-year senior unsecured notes (B2/B) on Wednesday.

The 8 3/8% dollar-denominated notes priced at 98.364 to yield 8 5/8%, at the tight end of the 8¾% area price talk.

The 8 7/8% sterling-denominated notes priced at 98.401 to yield 9 1/8%, at the tight end of the 9¼% area price talk.

The overall amount of issuance was upsized from an originally planned amount of £500 million equivalent, in two tranches.

Deutsche Bank Securities Inc., BNP Paribas Securities Corp., Calyon Securities, Goldman Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities Inc., RBS Securities Inc. and UBS Investment Bank were joint bookrunners for the debt refinancing.

Both tranches went well, a source close to the deal said.

Although the advertised size was indeed £500 million, the company was in the market to get as much done as it could, sources said.

Hence the upsizing may not be as dramatic as it would seem on the surface.

Norwegian Cruise past talk

Meanwhile Norwegian Cruise Lines priced a $450 million issue of 11¾% seven-year senior secured notes (B3/B+) at 98.834 to yield 12%.

The yield printed 87.5 basis points beyond the wide end of the 11% area yield talk. The issue price came towards the rich end of the 2 to 3 points of discount talk.

Deutsche Bank Securities Inc., Barclays Capital Inc., Citigroup Global Markets Inc. and J.P. Morgan Securities Inc. were joint bookrunners.

The Miami cruise ship line will use the proceeds to retire bank debt and discharge its existing 10 5/8% senior notes.

The NCL deal was a tough one, according to sources, who said that in the end there was a raft of covenant changes, in addition to the greater than anticipated yield.

The buyside is not crazy about the sector, which has taken something of a hit from the H1N1 flu epidemic, remarked one banker not in the NCL deal.

The calendar

The midweek session did produce some news regarding the active forward calendar.

Triumph Group plans to price a $175 million offering of eight-year senior subordinated notes early next week.

Bank of America Merrill Lynch and JP Morgan are joint bookrunners..

Proceeds will be used for general corporate purposes, which may include debt reduction including repayment of the company's revolver without any permanent reductions.

Elsewhere, undersea cable network services provider, Columbus International, Inc., which operates in the Caribbean and Latin America, will begin a roadshow on Thursday for its $450 million offering of five-year senior secured notes (B2/B).

The roadshow wraps up on Nov. 12, and the Rule 144A for life bullet deal is expected to price after that.

Syndicate bankers in the U.S. had varying opinions as to whether Columbus International is a high-yield play or an emerging markets deal.

Citigroup, Standard Bank and RBC Capital markets are joint bookrunners.

One sell-side source pointed out that Standard Bank, which has a substantial footprint in emerging markets deals, seldom appears on the syndicates for U.S. high-yield deals.

Virgin Media trades up

A trader said that he had seen "a lot of numbers in the morning" on Virgin Media's new dollar-denominated 8 3/8% notes due 2019, $600 million of which 98.364.

The new bonds "got to be as good as par, around lunchtime, but then they backed off quite a bit a bit," retreating to 99 bid, 99½ offered.

"I guess things kind of bounced around a little."

Norwegian Cruise heads up, come down

A trader said that Norwegian Cruise Lines' new $450 million of 11¾% senior secured notes "ran up to 99¾ bid, 100¼ offered right out of the box," after having priced earlier in the session at 98.834.

However, he said that the bonds later "came back down from their highs" of the day to end at 98¾ bid, 99 offered.

"It seemed like we were following the equity market," which saw big gains early on, but which gave back much of those gains around the time of the Federal Reserve's announcement to end only modestly higher.

"We started out strong - but then came back in," he said.

Tuesday deals little seen

Traders saw no real sign of activity in the deals which priced on Tuesday; for instance, one said that said that the Netflix 8½% notes due 2017, which priced at par Tuesday and which then cruised to 101¾ bid, 102 offered in subsequent activity, were "a little lower than last night" at 101½ bid, 102½ offered. He saw "a lot of volume."

New Reynolds bonds lock down

A trader said that Reynolds Group's new 7¾% senior secured notes due 2016 were trading at 993/4, "plus lock."

He said that "the buyer and seller were locked into the same price" for the Richmond, Va.-based packaging concern's new $1.125 billion of the bonds, which priced at 98.695 last Thursday, to yield 8% - but no one was interested. When you start seeing locked markets and no one is coming in to either hit or lift the offering - it was just one of those days."

Market indicators turn around

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up ¾ point on Wednesday at 92¼ bid, 92¾ offered, after having eased by ¼ point on Tuesday.

Meanwhile, the KDP High Yield Daily Index rose by 13 basis points on Wednesday to end at 69.27, after having fallen by 18 bps in Tuesday's dealings. Its yield narrowed by 4 bps to 8.73%, reversing the trend seen on Tuesday, when it rose by 5 bps.

In the broader market, advancing issues held their lead over decliners for a fifth consecutive session on Wednesday, strengthening their lead to a margin of some four-to-three.

Overall market activity, as measured by dollar-volume levels, zoomed 43% from Tuesday's pace.

Despite the volume pickup, a trader said that Wednesday was "just one of these strange days where a lot of people were kind of rehashing the same old stuff, and you got the kind of sense that everyone was sitting around, waiting for the Fed, to see what the language was."

The Federal Reserve's policy-setting panel, the Federal Open Market Committee, concluded its two-day meeting in Washington on Wednesday and to the surprise of nobody the central bank declared that while economic activity has "continued to pick up" and the housing market has strengthened, "economic activity is likely to remain weak for a time" - prompting the Committee to vote to keep the target range for its bank lending rate at historic lows between zero to 0.25%, and made no major changes to a program to help drive down mortgage rates.

"There was nothing new and exciting going on today," the trader continued. "It was just a mish-mosh of all types of different names that had some activity, but there were no big events, aside from everyone waiting 'OK, what's the Fed going to say."

"Stuff traded," he concluded, "but there just was nothing to write home about."

DirecTV busiest name

An exception could be made for DirecTV, its 6 3/8% notes due 2015 the most active on the day, with the Trace bond-tracking service showing nearly $68 million of the satellite TV broadcaster's bonds having changed hands.

The trader pegged the bonds between 102 7/8 and 103 3/8, which he said was up about 3/8 point on the day.

DirecTV's 7 5/8% notes due 2016 were also pretty busy, with a market sources seeing over $31 million having changed hands at mid-afternoon. The bonds were quoted having firmed about ¼ point at 1083/4.

Another trader, who saw those bonds around the same level, characterized DirecTV as a "quasi-high grade credit that trades more than just an ordinary high yield name."

The company is scheduled to release third-quarter earnings results on Thursday.

CIT quiets down

A trader said that CIT Group Inc. "looks like it's faded" as a story following the brisk activity of the last few sessions, post its Chapter 11 filing.

He said that the troubled New York-based commercial lending company's 5.65% notes due 2017 were "right around" the 69 bid level, "up a little" from prior levels around 68 and before that, 67, "so they moved up a little," though on only modest volume.

Another trader said that he was "not seeing CIT in the Top 40 of volume," even though over the previous few sessions, "it had been kind of dominant in volume" as investors tried to position themselves in the wake of the bankruptcy filing.

He said the most active CIT issue, the 6.10% bonds due 2067, was about the 25th most actively traded credit, with about $14 million traded, remaining well down in the single digits in a 7½% to 8¾% context.

He meantime saw its 5.65% notes due 2017 about 56th on the Most Actives list, with $7 million traded. The bonds moved "anywhere between" 68¾ and 69, he said.

USF bonds volume dwindles

A trader said that U.S. Freightways Corp.'s 8½% notes due 2010 "traded into a 71 bid a couple of times," with only $3 million changing hands - down from $17 million on Tuesday and $16 million on Monday, when the Overland Park, Kan.-based nationwide trucking company announced its plans to exchange equity for its straight and convertible bonds.

He said that the bonds were in a 71-72 context, when it traded into the 71 bid, "and that was kind of all she wrote."

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