Icahn shops $1 billion deal; Stena, other new notes firmer; weather chills market

By Paul Deckelman and Paul A. Harris

New York, Jan. 21 - The high-yield market returned after its three-day holiday weekend on a relatively quiet note, with no new dollar-denominated, fully junk-rated deals seen having priced during Tuesday's session.

However, there was some activity going on behind the scenes, as Icahn Enterprises LP - which priced a giant-sized three-part split-rated deal just two weeks ago - was heard to be back in the market, shopping around a $1 billion offering of eight-year notes. There had been some expectation that the new megadeal would price Tuesday, but it now appears to be Wednesday's business.

Back among the purely junk players, syndicate sources heard that North Atlantic Drilling had hit the road to sell $600 million of five-year bonds, while another energy-sector name, Northern Blizzard Resources, Inc., is also on the road with a $425 million eight-year deal.

The latter company's name seemed symbolic, as a fast-moving winter storm system that threatened to dump as much as a foot of snow on New York and other Northeastern business centers, had a chilling effect on overall Junkbondland activity and other financial market dealings; traders said the prospect of the storm, combined with a sharp fall in nominal temperatures and an even sharper slide in wind-chill readings, caused many market participants heading for the exits early in the session.

Even with curtailed activity, traders saw healthy gains in the new bonds from Stena AB, which had priced on Friday, and they said that the session's other issue - from Liberty Global plc's VTR Chilean cable and telecommunications unit - continued to hold its strong initial aftermarket gains.

Away from the new deals, several different issues of NII Holdings, Inc.'s bonds were seen having gained solidly in fairly heavy trading, in line with a rise in the international wireless provider's shares, helped by the latest in a recent string of corporate announcements, this one involving the rollout of a new cellphone app aimed at customers in the United States as well as its usual Latin American turf.

Statistical measures of market performance were mixed for a fourth straight day.

Icahn $1 billion for Wednesday

No high-yield deals were priced on Tuesday, as players who battled the weather on the East Coast of the United States returned to their desks following the extended Martin Luther King Jr. holiday weekend.

However, the deal calendar ballooned to $5.14 billion.

Icahn Enterprises LP and Icahn Enterprises Finance Corp. plan to price a $1 billion offering of eight-year senior notes (expected ratings Ba3/BBB-) on Wednesday via bookrunner Jefferies.

A conference call with investors was scheduled to take place on Tuesday.

Jefferies LLC has the books for the Rule 144A and Regulation S with registration rights offer.

The New York-based diversified holding company plans to use the proceeds for general corporate purposes.

North Atlantic starts roadshow

North Atlantic Drilling began a roadshow on Tuesday for a $600 million offering of non-callable five-year senior notes.

The roadshow is scheduled to wrap up on Friday.

Goldman Sachs, Credit Suisse and Morgan Stanley are the bookrunners for the debt refinancing deal from the Hamilton, Bermuda-registered offshore drilling company.

Northern Blizzard roadshow

Northern Blizzard Resources is currently roadshowing a $425 million offering of eight-year senior notes (expected ratings B3/B-).

The deal is expected to price on Jan. 27.

J.P. Morgan, TD, CIBC, RBC, Scotia and Wells Fargo are the joint bookrunners for the Canadian energy company's debt refinancing deal.

Play brings three-part deal

The news flow out of Europe was also vigorous.

Warsaw-based mobile telecom Play is roadshowing an €870 million equivalent offering of notes in three tranches, according to a market source.

Play Finance 2 SA is offering €630 million equivalent of five-year senior secured notes in tranches of euro- and Polish zloty-denominated tranches.

Meanwhile Play Finance 1 SA is offering €240 million of 5.5-year senior unsecured notes.

The roadshow wraps up on Friday, and the deal is set to price thereafter.

BofA Merrill Lynch and JPMorgan are the joint physical bookrunners. Credit Suisse is the joint bookrunner.

Proceeds will be used to refinance debt and to fund a distribution to shareholders.

Autodistribution roadshow

France-based auto and truck parts supplier Autodistribution Group is roadshowing a €240 million offering of five-year senior secured notes through Thursday via JPMorgan.

Proceeds will be used to repay debt and to fund the acquisition of ACR Group, a France-based supplier of brake, chassis and engine parts as well as alternators and starters.

Yioula mandates Citigroup

Greece-based glass container manufacturer Yioula Glass mandated Citigroup Global Markets Ltd. to lead meetings with fixed-income investors regarding a proposed €165 million offering of six-year senior secured notes.

A Rule 144A and Regulation S deal, via issuing entity Glasstank BV, is expected to come to market pending management discretion and market conditions.

Proceeds would be used to refinance debt and for general corporate purposes.

Waiting for Icahn

In the secondary market, traders said that participants were watching to see what was happening with the proposed new $1 billion deal from Icahn Enterprises.

"I think IEP is going to be in good shape" for pricing, one said.

While the quickly shopped deal had been expected to come to market on Tuesday, he noted that "a lot of people in New York are already gone," looking to get a jump on the evening commute ahead of the worsening weather, pushing the pricing off until Wednesday.

That deal will come some two weeks after the New York-based diversified holding company did an upsized $3.65 billion three-part split-rated offering, consisting of $1.175 billion of 3½% notes due 2017, which priced at par on Jan. 8 after having been downsized from $1.225 billion; $1.275 billion of 4 7/8% notes due 2019, which priced at par after having been upsized from $1.225 billion; and a $1.2 billion add-on to the issuer's existing 6% senior notes due Aug. 1, 2020, which priced at 102 to yield 5.574% after having been upsized from $1.05 billion.

A trader said that the 3½% notes were at 101½ bid, 101 7/8 offered on Tuesday, while the 4 7/8s were at 101½ bid, 101¾ offered.

Jones bonds fall

Elsewhere, a trader said that the Jones Group Inc.'s 6 7/8% notes due 2019 lost 1 7/8 points to end at 102¾ bid on busy volume of over $11 million.

The slippage coincided with details emerging on the New York-based apparel group's financing for its pending leveraged buyout.

A filing with the Securities and Exchange Commission indicated that Jones, who is being bought by Sycamore Partners in a transaction expected to close in the second quarter, expects to use new senior notes to take out a $525 million senior bridge loan backing the LBO. The financing also includes a $650 million senior secured credit facility.

Friday deals trade well

A trader said that Stena Group's 7% notes due 2024 gained as much as 1 3/8 points on the session to go home at 102 5/8, 103 1/8 offered.

That was well up from the par level at which the Swedish shipping and energy concern had priced its $600 million of notes on Friday after upsizing the deal from $400 million.

Those bonds had initially traded around the 101¼ bid, 101¾ offered level when they were freed for aftermarket dealings.

Friday's other deal - the $1.4 billion of new 6 7/8% senior secured notes due 2024 from VTR Finance BV - had a very firm tone, a trader said, seeing heavy trading in the new bonds up around the 102 5/8 bid, 103 offered level , a gain of more than ½ point.

A second trader pegged the Chilean cable and internet company's bonds at 102½ bid.

NII bonds trade up

Away from the recent new issues, trader said that NII's bonds "seemed a bit better today," quoting the Reston, Va.-based company's 8 7/8% notes due 2019 as having moved up to around the 50 bid level, while its 7 5/8% notes due 2021 gained 1½ points to go out at 46 bid.

A market source at another desk said that the company's NII Capital Corp. bonds were among the biggest gainers and most actively traded junk issues on Tuesday. For instance, he saw its 10% notes due 2016 jump as much as 3 points on the day to go home at 65¾ bid on volume of over $24 million.

He also saw the 7 5/8s gain 1 3/8 points to finish at 45 7/8, with over $13 million of those bonds having changed hands.

And he saw the 8 7/8s up some 2½ points, at 50¼ bid, on volume of over $8 million.

Another source said there was "active institutional buying this morning."

The rise in the bonds replicated a jump in the company's Nasdaq-traded shares, which rose by 14 cents, or 4.66%, to end at $3.12 on volume of some 18.9 million shares, more than three times the norm.

NII's paper got a boost as the company - which sells wireless service in Latin America under the Nextel brand - announced that its PRIP Push-to-Talk app would be available on iPhones in the U.S. It already has a version of the app out that is compatible with the popular Android phones.

It was the third significant announcement in the past 10 days from NII. On Friday, it declared that it has entered into an agreement with Apple Inc. that will allow NII to offer Apple iPhone 5S and 5C to its Nextel customers in Brazil as early as the end of this month.

And last Monday, NII said it had inked a pact with Spanish telecom company Telefonica SA that will allow it to use Telefonica's existing 3G networks in Mexico and Brazil, saving itself the necessity of a costly infrastructure buildout to reach remote customers.

Weather a factor

But overall, traders said that the worsening weather had an impact on curtailing market activities, with one quipping that "it kind of put things in a deep freeze. People came in, and then they bolted out."

Market indicators stay mixed

Statistical junk-market performance indicators were mixed for a fourth consecutive day on Tuesday.

The Markit Series 21 CDX North American High Yield index lost 1/6 point on Tuesday to close at 107¾ bid, 108 offered, after having eased by 3/32 point on Friday.

The KDP High Yield Daily index gained 1 basis point to end at 74.97 after having retreated by 1bp on Friday.

Its yield came in by 2 bps to 5.41% after having been unchanged Friday.

And the widely followed Merrill Lynch High Yield Master II index extended its amazing winning streak to 22 consecutive sessions, dating back to Dec. 19. It was up by 0.04% on Tuesday, following Friday's 0.068% gain.

That lifted its year-to-date return to 1.157% from 1.058% on Friday, its 13th straight new peak level for 2014.

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