Upsized Freescale drive-by prices, LIN, Valmont also, ManTech ahead; mine mishap mauls Massey

By Paul Deckelman and Paul A. Harris

New York, April 7 - Freescale Semiconductor, Inc. was heard by high yield syndicate sources Wednesday to have priced a massively upsized drive-by offering of eight-year senior secured notes. When they hit the secondary sphere, those new bonds backed off their early gains to pretty much hang around their par issue price, in active dealings, while the company's existing paper firmed.

Also pricing during the session was LIN Television Corp.'s $200 million of eight-year senior notes, which had been announced on Tuesday afternoon, and another quickly-shopped deal, Valmont Industries, Inc.'s split-rated issue of 10-year notes. The former bonds were seen up just modestly in the aftermarket, while the latter gained about a point.

Price talk emerged on ManTech International Corp.'s eight-year note deal, which is expected to come to market after the order books finally close on Thursday morning. Integra Telecom Holdings Inc. announced plans for a $500 million offering of secured notes, while Global Geophysical Services, Inc. was heard to be hitting the road starting Thursday to market a $200 million note issue.

There was extremely brisk trading in Ford Motor Credit Co. LLC's new five-year mega-deal, which had priced on Tuesday, with the bonds seen up around ½ point. But parent Ford Motor Co.'s existing paper traded down. Ford domestic arch-rival General Motors Corp.'s bonds also skidded lower, after GM reported a more than $4 billion loss since emerging from bankruptcy last summer.

Elsewhere in the secondary realm, Massey Energy Co.'s bonds were lower in active trading, as news about Monday's disastrous explosion at a Massey coal mine in West Virginia continued to dominate news headlines.

Late Wednesday, word that sponsors KKR and Bain Capital would take HCA Inc. public in a $3 billion IPO, had HCA's bonds trading higher, according to a high-yield mutual fund manager.

Meanwhile the primary market remained active, as two issuers, each bringing a single tranche of junk, raised $1.58 billion.

Freescale massively upsized

Freescale Semiconductor priced a massively upsized $1.38 billion issue of eight-year senior secured notes at par to yield 9¼%, in a Wednesday drive-by deal.

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

Credit Suisse ran the books for the deal, which was upsized from $750 million.

Proceeds will be used to refinance the company's existing term loans.

The deal played to $4 billion of orders, according to a buy-side source who added that the new Freescale 9¼% notes due in 2018 were trading at 100 1/8 bid, 100½ offered, having eased from a 101 context.

LIN prices at tight end

Elsewhere Wednesday LIN Television priced a $200 million issue of eight-year senior notes (Ba3/B+) at par to yield 8 3/8%.

The yield printed at the tight end of the 8½% area price talk.

J.P. Morgan Securities Inc. was the lead left bookrunner. Deutsche Bank Securities Inc. was the joint bookrunner.

Valmont upsizes split-rated deal

From the crossover sector, Valmont Industries priced an upsized, split-rated $300 million issue of 10-year senior unsecured notes (Ba1/BBB-) at 99.998 to yield 6 5/8%.

The yield printed at the tight end of the 6¾% area price talk. The amount was increased from $250 million.

Credit Suisse and Bank of America Merrill Lynch were joint bookrunners for the quick-to-market deal.

Proceeds will be used to fund the proposed acquisition of Delta plc. If the acquisition is not completed, proceeds will be used for general corporate purposes, including debt repayment.

The new Valmont 6 5/8% bonds due 2020 broke to 100 bid, 101 offered, according to a hedge fund manager.

Mantech talks eight-year notes

Apart from the deals that priced on Wednesday, ManTech International talked its $200 million offering of eight-year senior unsecured notes to price at par, yielding 7¼% to 7 3/8%.

The order books closed Wednesday for all accounts outside of Boston. Books close for Boston accounts at 9 a.m. ET on Thursday.

The deal is set to price after that.

Bank of America Merrill Lynch and J.P. Morgan Securities Inc. are the joint bookrunners.

Integra to bring $500 million Friday

Meanwhile, Integra Telecom Holdings disclosed plans to price a $500 million offering of six-year senior secured first-lien notes (B2/B-) on Friday.

JP Morgan is the left lead bookrunner. Deutsche Bank Securities, Goldman Sachs & Co., Jefferies & Co. and Morgan Stanley are joint bookrunners.

Proceeds will be used to repay the Portland, Ore.-based telecommunications company's senior secured credit facility.

Full roadshow for Global Geophysical

Global Geophysical Services will start a full roadshow on Thursday for its $200 million offering of seven-year senior notes (/B/).

An investor call is set for 11 a.m. ET on Monday.

The roadshow wraps up on April 21.

Barclays Capital, Bank of America Merrill Lynch and Credit Suisse are joint bookrunners.

Proceeds will be used to refinance the Missouri City, Tex.-based seismic data services provider's credit facility and for general corporate purposes.

The bond deal comes to market concurrent with an initial public offering of the company's stock.

Country Garden plans benchmark

Finally, Chinese property developer Country Garden Holdings Co. Ltd. will roadshow a benchmark offering of dollar-denominated seven-year senior notes (Ba3/BB-) in Asia and Europe beginning on Friday.

The roadshow wraps up during the middle part of the April 12 week.

Goldman Sachs & Co. and JP Morgan are joint bookrunners.

Proceeds will be used to refinance the Hong Kong-based company's outstanding convertibles.

New Freescale bonds come off highs

When the new Freescale Semiconductor 9¼% senior secured first-lien notes due 2018 were freed for secondary dealings, a trader saw the bonds get as good as 101 bid, versus the par price at which the Austin, Tex.-based computer chip manufacturer's huge new issue had priced earlier in the session.

However, he saw the bonds retreating from that peak to around 100½ bid, 100 7/8 offered and still later, to about the par bid level.

A second trader agreed that the issue "came in off the top a little bit," seeing the bonds closing around 100 3/8 bid, while a third pegged them at 100¼ bid, 100½ offered.

A trader said that the new Freescales were "flying all over," and added that they were "more active than some of the other [new issues], for some reason."

The trader meantime saw the company's existing paper better on the expected improvement to the balance sheet resulting from the use of the upsized new issue's proceeds to repay shorter-maturing credit facility debt. He quoted the 8 7/8% notes due 2014 a point better at 96¼ bid, while its 10 1/8% notes due 2016 gained 1¼ points to the 90 level. Another market source also had the 8 7/8s at 961/4, but called that a gain of a little less than a full point.

LIN firms slightly

A trader said that LIN Television's 8 3/8% notes due 2018 moved up to 100½ bid, 101½ offered, after the new bonds had priced at par.

Other traders had not seen any traces of the Providence, R.I.-based television station owner and digital media company's new bonds, which priced fairly late in the session.

Split-rated Valmont trades up

A trader said that Valmont Industries Inc.'s 6 5/8% notes due 2020 pushed up to 100¾ bid, 101 3/8 offered, from the 99.998 level at which the Omaha-based metal light pole, tower structure and mechanized irrigation systems manufacturer's new bonds had priced.

Another trader said that earlier in the day, the bonds had pushed as high as a 101-101¼ bid level, but then "they kinda died out." He still saw them going home up by at least a point on the session at 101 1/8 bid, 101 3/8 offered.

Furious flurry in Ford Credit

A trader saw the new Ford Motor Credit 7% notes due 2015, which had priced at 99.478 on Tuesday to yield 7 1/8%, as having moved up slightly to around 100 1/8 bid, 100 3/8 offered, on over $100 million of trading in the $1.75 billion deal.

Another trader acknowledged at least a "fair amount" of the new Ford Credit bonds, with "a lot" of activity between par and 100¼ offered. He saw the bonds move up from 99¾ bid, 99 7/8 offered "first thing this morning" to levels around par bid, 100¼ offered going out.

Among existing Ford Credit paper, a market source quoted its 9 7/8% notes due 2011 as having pushed above the 107 mark, a gain of about ¾ point on the day. Its 7% notes due 2013 gained nearly a point to just under 104 bid and its 8 1/8% notes due 2020 -- $500 million of which priced at par on Jan. 14 as an add-on to an earlier issue - were up 1¼ points on the session to around the 105 mark, although the company's 7 3/8% notes due 2011 were seen down by that same amount to around 102½ bid.

MaganaChip is hot...

A trader quoted MagnaChip Semiconductor SA/MaganaChip Semiconductor Finance Corp.'s 10½% notes due 2018 as high as 102¼ bid, 102¾ offered - well up from the 98.674 level at which the South Korean computer-chip manufacturer's $250 million issue had priced on Tuesday to yield 10¾%.

However, another trader said he did not see any sign of the bonds Wednesday.

...but Meritage is not

A trader said that Scottsdale, Ariz.-based homebuilder Meritage Homes Corp.'s new 7.15% notes due 2020 hovering around 97½ in morning trading Wednesday, not far from the 97.567 level at which the $200 million drive-by issue had priced on Tuesday to yield 7½%.

He said that the bonds had gotten as good as bid levels around 98 on Tuesday, "so they were a little lower today."

A trader said that he "did not see any other [new issues] jumping out."

Market indicators little changed

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index off by ¼ point on the session Wednesday, pegging it at 98¾ bid, 99¼ offered. The index had been essentially unchanged on Tuesday.

The KDP High Yield Daily Index meantime held steady on Wednesday at 72.11, after having edged up by 1 basis point on Tuesday, while its yield narrowed by 1 bp to end at 7.81%, after having been unchanged Wednesday.

Advancing issues held a led over decliners Wednesday of about seven to six.

Overall market activity, represented by dollar-volume levels, was down 14% on Wednesday from levels seen the previous session.

A trader said that the day "still had a spring break kind of feeling to it," with some participants still absent owing to having taken vacation time this week to coincide with the spring recess periods in many school districts. Stunning and unseasonably warm weather in much of the Northeast also contributed to some bond market denizens deciding to play hooky as the day wore on - the mercury sizzled up to 90 at mid-afternoon in Manhattan, making Wall Street warmer on an early-April day than, say, Southern California.

A second trader, however, characterized Wednesday's session as "a busy day today," although virtually all of the action was in new or recently priced bonds like Freescale and Ford Credit.

"It's just incredible all of the stuff that's been going on out there [in the primary]," yet another trader declared.

Among existing issues, a trader saw Ford Credit's corporate parent, Ford Motor Co.'s 7.45% bonds due 2031 off by 2 points at 92½ bid, 93½ offered.

GM gyrates lower after numbers

A trader saw "pretty good-sized trading" in Ford domestic arch-rival General Motors' benchmark 8 3/8% bonds due 2033. He saw the bonds trade down into a 35¾ bid, versus recent levels around 37-38.

GM, another trader said, was "pretty active," with the bonds "anywhere between" 35-36, following the numbers, down from as high as 38 bid earlier. "They faded as the day went on," he said, finishing below Tuesday's levels in a 36-37 context. He saw the bonds get as low as 35 "a couple of times" Wednesday, before finally settling around 35 ¼ bid.

At another desk, a trader pegged the bonds down a point at 35½ bid, 36½ offered.

The benchmarks traded off after the Detroit-based top U.S. carmaker released its numbers for the 2009 year following its emergence from bankruptcy last summer.

In releasing what it termed its "fresh-start" accounting for the period between July 10 and Dec. 31, the company reported revenue of $57.5 billion and a net loss of $4.3 billion. The loss includes a $2.6 billion pre-tax impact related to the settlement loss of its UAW retiree medical plan, as well as a $1.3 billion foreign currency re-measurement loss.

Additionally, GM said it had generated $1 billion in cash from operating activities.

"We are building the foundation that will allow us to return to public ownership," said Chris Liddell, GM's vice chairman and chief financial officer, in the earnings release. "Completing fresh-start accounting is an important step in that process."

GM reportedly is planning an initial public offering sometime in the future. However, management acknowledged that it was not ready to do so.

"As the results for 2009 show there is still significant work to be done," Liddell said. "However, I continue to believe we have a chance of achieving profitability in 2010. We are also dedicated to delivering on our commitments to our stakeholders."

Liddell noted that GM remained committed to repaying the outstanding balance of the bailout funds it received from the Canadian and U.S. governments "by June 2010 at the latest."

Also in the autosphere, Visteon Corp.'s 7% notes due 2014 broke though the psychologically significant par level, gaining about 2 points on the day to finish at 101.

Massey down after disaster

Massey Energy's 6 7/8% notes due 2013 were seen by a trader having fallen to 98½ bid, 99½ offered - by way of contrast, he said that the Richmond, Va.-based coal producer's bonds had traded as high as 103 bid, 103½ offered at the end of last week.

In the interim, of course, occurred what is being called the worst American mining disaster since at least the mid-1980s, as some 25 miners were killed and four others were missing and feared dead as well, following Monday afternoon's explosion at the company's Upper Big Branch coal mine in Raleigh County, W.Va.

The accident has raised new questions about the company's safety practices, with critics noting that Massey has been repeatedly cited for problems with the system that vents methane and for allowing combustible dust to build up. They further noted that on the very day of the blast, the federal Mine Safety and Health Administration had cited the mine with two more safety violations - one of them involving inadequate maps of escape routes. Company executives have meantime denied allegations from mining union spokesmen and other critics that the company was cutting corners on safety to maximize profits.

The trader noted that in this case, the old business maxim that "any publicity is good publicity" goes completely out the window, since "when you have trapped, dying people, that's not a good selling point" for a company.

Another trader saw the Massey issue "wasn't the biggest trader today - but they traded a fair amount." He saw the bonds going out at 99 - up a little from earlier levels around 98½ bid, 98¾ offered, but still down from pre-accident levels Monday as high as 1021/2.

"It's been a little volatile, anywhere between 99 3/8 and 1003/4," he said, off as much as 2½ points from pre-news levels.

A market source saw the bonds trading Wednesday as low as 96 bid, although pointing out that was a relatively small odd-lot piece; in round-lot terms, the bonds got down to 98½ and ended at 99 - pretty much unchanged on the day but still well down from where they were before Monday's catastrophe.

Blockbuster better on studio DVD deals

Elsewhere, Blockbuster Inc.'s 9% senior subordinated notes due 2012 jumped nearly 3 points to finish just under the 24 level.

The rise coincided with a jump of nearly a nickel, or 19.52%, in the Dallas-based movie rental company's badly battered penny-stock shares, which finished at 30 cents apiece, on nearly four times normal volume of 26.8 million.

Those gains followed the late-Tuesday announcement that Blockbuster had reached agreements with two more major studios -- 20th Century Fox and Sony Pictures - that will allow it to rent DVDs on the same day they go on sale, similar to a previously announced deal with Warner Home Video. Blockbuster will also receive enhanced payment terms in exchange for a first lien on assets of its Blockbuster Canada Co. subsidiary.

The beleaguered company further said that it "will continue to rationalize its U.S. store portfolio and aggressively manage working capital," and additionally said that it "has implemented a plan that cuts operating costs by $200 million this year to preserve cash and further improve liquidity."

Blockbuster said it is also in discussions with advisors for its bondholders related to debt recapitalization.

-Stephanie N. Rotondo contributed to this report

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