Bumble Bee, upsized American Axle, Wind deals price, new debt trades up; funds gain $324 million

By Paul Deckelman and Paul A. Harris

New York, Dec. 10 - High yield primary-side players were a bunch of very busy bees Thursday, as some $2.12 billion and €325 million priced in half a dozen separate transactions - so it was certainly appropriate that one of those deals was for iconic tuna fish producer Bumble Bee Foods LLC/Connors Bros. Cloverleaf Seafoods Co./Bumble Bee Capital Corp., which priced a $200 million issue of senior secured notes, which were seen by traders having moved up more than a point in the aftermarket.

But while the San Diego-based seafood processor may have been the most recognizable name bringing a bond offering, its transaction was by no means the biggest deal of the day. That singular honor went to Italian telecommunications operator Wind Acquisition Holdings Finance SA, which brought in a two-part dollar- and euro-denominated offering of 7.5-year senior PIK notes, sharply upsized to €748 million equivalent from the €500 million equivalent initially shopped around.

Also upsizing, though considerably less radically, was American Axle & Manufacturing Inc., with a $425 million offering of seven-year senior secured notes, which firmed solidly when it moved over to the secondary side. Dollar Financial Corp. likewise upsized its offering of seven-year notes to $600 million in a late-session pricing.

Rounding out the day's pricings, Primus Telecommunications Holding Inc. came with an unusually structured $130 million deal consisting of units comprised of a mixture of senior secured notes issued by the parent company and its Canadian affiliate. Late in the day, computer hardware and software distributor Intcomex tapped the market for $120 million of secured notes, which priced at a heavy discount to par.

While those deals were coming to market, participants heard price talk emerge on the offerings for Georgia Gulf Corp., DuPont Fabros Technology, LP, Goodman Global Group, Inc., and a pair of European issuers, France's Rexel SA and Britain's Infinis Ltd. All are scheduled to price during what is expected to be a hectic session on Friday. Talk also emerged on Canadian oilfield services provider Calfrac Well Services Ltd., whose $100 million tranche of mirror notes to an existing issue was being marketed to would-be investors via a short roadshow, in anticipation of possibly pricing Friday or, otherwise, early next week.

Medical device maker Boston Scientific Corp. priced a $2 billion split-rated (Ba1/BBB-/BB+) offering in three tranches, but that deal was seen to be mostly of interest to high-grade investors rather than junk bonders.

Away from the primary parade, there was heavy activity in the CIT Group Inc.'s paper - also newly issued, as part of the company's restructuring - as the New York-based commercial lender emerged from Chapter 11.

Junk funds up by $324 million

As trading was finishing up for the session, market participants familiar with the high yield mutual fund-flow statistics generated by AMG Data Services of Arcata, Calif. - a key barometer of overall market liquidity trends - said that in the week ended Wednesday $324 million more came into the weekly-reporting funds than left them.

The latest week's inflow was the 16th consecutive advance, and followed the $184.5 million cash inflow seen in the previous week, ended Wednesday, Dec. 2. During that stretch, dating back to mid-August, inflows have totaled some $5.397 billion, according to a Prospect News analysis of the AMG figures.

It was also the 23rd week in the last 24 in which inflows were seen, dating back to mid-June. Some $7.826 billion of net inflows have been seen during that stretch, according to the Prospect News analysis - a run interrupted only by a lonely $89.9 million outflow recorded in the week ended Aug. 19.

With the end of 2009 now just scant weeks away, inflows, including the latest weekly gain, have been seen in 44 weeks out of the 49 since the start of the year, according to the analysis, against just five outflows - the Aug. 19 retreat, a $110 million outflow in the week ended June 24, and three weeks of outflows in late February and early March, totaling $969 million. The inflows, on the other hand, include an incredible 14-week run of consecutive gains, dating from mid-March through mid-June, during which time the funds grew by a record $9.1 billion.

Counting the latest week's number, the year-to-date net inflow for the weekly-reporting funds rose to $19.41 billion, according to the analysis - a new peak level for the year so far, eclipsing the old mark of $18.086 billion recorded the previous week. Funds which report on a monthly basis, rather than weekly meantime saw an $84.394 million inflow in the regular week, bringing their year-to-date inflow up to $12.128 billion. Consolidating the data from the weekly and the monthly reporters, aggregate inflows for the year so far total some $31.538 billion, a market source said.

Such sustained inflows have helped the junk market come roaring back from last year's staggering 25%-plus loss and sharply reduced primary activity totals. Total returns so far this year totaled an eye-popping 54.431% as of Wednesday's close, according to the authoritative Merrill Lynch High Yield Master II index, a new peak level for 2009, handily beating virtually every other major investment asset class.

Meanwhile, the $147.996 billion of new dollar-denominated high yield debt issued in the U.S. market so far this year, as of Wednesday's close -- $119.524 billion of it from domestic issuers - is running some 104.74% ahead of the feeble pace of last year's overall primary tally, according to statistics compiled by Prospect News. Domestic-borrower new issuance is 100.22% ahead of its year-ago levels. Industrialized country global issuance in all currencies of $160.791 billion equivalent is 149.83% ahead of last year's pace.

EPFR sees inflows resume

Another fund-tracking service, Cambridge, Mass.-based EPFR Global, which uses a different methodology, calculated a $359 million inflow on the week, reversing the trend seen the previous week, ended Dec. 2, when it had reported a $232 million outflow, which broke a three-week string of inflows, although that was only the second weekly outflow seen since late June.

That inflow brought the year-to-date cumulative total back up to some $22.07 billion from the $21.7 billion seen the previous week, EPFR said, boosting that total to both a new 2009 peak - eclipsing the old mark of $21.94 billion, seen in the week ended Nov. 25 - and, EPFR's analysts said, establishing "a record setting year for inflows."

While the EPFR junk figures most weeks point essentially in the same direction as AMG's - the previous week and the week ended Nov. 4 being the notable rare exceptions - the precise weekly and year-to-date numbers almost always differ somewhat due to EPFR's inclusion of some non-U.S. funds in its universe. Any and all cumulative fund-flow totals, whether for AMG or EPFR, can include unannounced revisions and adjustments to figures from prior weeks.

The flow of money into and out of the junk bond funds is seen as a generally reliable market barometer of overall high yield market liquidity trends - although they comprise less of the total monies floating around the high yield universe.

Dollar Financial massively upsized

In the primary, National Money Mart Co. (Dollar Financial Corp.) priced a massively upsized $600 million issue of 10 3/8% seven-year senior notes at 99.398 to yield 10½% on Thursday.

The yield printed on top of the yield talk. The issue price came rich to the 1 to 2 points of discount talk.

Credit Suisse and Wells Fargo Securities were joint bookrunners.

Proceeds will be used to fund the acquisition of Military Financial Services, LLC, to prepay $100 million of term loan debt and for general expenses, possibly including repaying a portion of the convertible notes.

Wind also massively upsized

Also completing a massively upsized transaction on Thursday was Wind Acquisition Holdings Finance S.A.

The Italian telecommunications company priced a massively upsized €748 million equivalent amount of 12¼% senior notes due July 15, 2017 (B3/B-) at 98.325 to yield 12½%.

The deal was talked with a 12½% area all-in yield, to price at a discount.

It was increased from €500 million equivalent.

The tranche sizes were $625 million and €325 million.

Morgan Stanley, Banca IMI, Calyon Securities, Citigroup, JPMorgan and Natixis Bleichroeder were joint bookrunners for the deal.

Proceeds will be used to fund a cash distribution to Weather Group.

American Axle upsized

Elsewhere, American Axle & Manufacturing, Inc. priced an upsized $425 million issue of 9¼% seven-year senior secured notes (B2/B-) at 98.715 to yield 9½%.

The yield printed at the tight end of the 9½% to 9¾% yield talk. The issue price was slightly cheap to the approximately 1 point of discount talk.

J.P. Morgan Securities Inc. and Bank of America Merrill Lynch were joint bookrunners for the debt refinancing deal.

Bumble Bee prices at tight end

Bumble Bee Foods, LLC priced a $220 million issue of 7¾% six-year senior secured notes (B2/B+) at 98.823 to yield 8%.

The yield came at the tight end of the 8% to 8¼% yield talk. The price came at the cheap side of the approximately 1 point of discount talk.

Wells Fargo Securities, LLC and Jefferies & Co. Inc. ran the books for the debt refinancing.

Primus price $130 million

Primus Telecommunications Holding, Inc. priced a $130 million offering of 13% seven-year senior secured notes units at 98.51 to yield 13.333%.

The yield printed wide of the 13% area yield talk. The issue price came in line with the approximately 1.5 points of discount talk.

Each of the 130,000 units was comprised of $653.85 of Primus Telecommunications Holding, Inc. notes (Caa1/B) and $346.15 of Primus Telecommunications Canada, Inc. notes (B3/B).

Jefferies & Co. and UBS Investment Bank were joint bookrunners for the debt refinancing.

Intcomex yields 14 7/8%

Finally, Intcomex, Inc. priced a $120 million issue of 13 ¼% five-year senior secured notes (B3/B-) at 94.43 to yield 14 7/8%.

Bank of America Merrill Lynch ran the books for the debt refinancing and general corporate purposes deal from the Miami-based aggregator of IT products serving Latin American and Caribbean markets.

A busy Friday

Meanwhile the stage was set for a busy Friday session

DuPont Fabros Technology, LP set price talk for its $550 million offering of eight-year senior notes at 8¾%, plus or minus 12.5 basis points.

Jefferies & Co. Inc., Barclays Capital Inc. and Macquarie Capital are leading the deal.

Goodman Global Group, Inc. set price talk for its $320 million proceeds offering of five-year senior discount notes, on Thursday, according to an informed source.

The notes are talked with a 12½% area yield to maturity, an 11½% accrual rate (initial accreted value of 57.2), and to price at 54.30 to 54.90 (equivalent to 95 to 96 of the accreted value).

J.P. Morgan Securities Inc. has the books for the dividend funding transaction.

Calfrac Holdings LP set yield talk for its $100 million offering of 7¾% senior unsecured mirror notes due Feb. 15, 2015 (B2/B+) at 9% to 9¼%.

RBC Capital Markets is the lead bookrunner for the bank debt refinancing. Bank of America Merrill Lynch is the joint bookrunner.

Rexel talked its €500 million offering of seven-year senior notes (//BB-) at 8¼% area.

Calyon Securities, RBS Securities and Bank of America Merrill Lynch are global coordinators and bookrunners for the debt refinancing deal from the Paris-based manufacturer of low voltage electrical products.

Meanwhile UK-based Infinis plc talked its £275 million offering of senior notes due December 2014 (B1/B+) at the 9¼% area.

Deutsche Bank Securities and JP Morgan are joint bookrunners.

'Hot and heavy'

In the secondary market, a trader called the day's activity "unbelievable. It's so hard to keep track of everything that's going on."

The new issues, he proclaimed were "coming hot and heavy."

Another trader agreed that "there was just a flurry of activity - it seemed like every 15 to 20 minutes, a new issue was breaking."

American Axle advances in aftermarket

Probably the best performer of the day among the new issues was Detroit-based automotive components manufacturer American Axle's 9¼% senior secured notes due 2017. The company had priced its $425 million issue - upsized from the originally announced $400 million - at 98.715 to yield 9½%, and a trader saw the new paper rise to par bid on the break and then push further, to 100 7/8 bid, 101 1/8 offered, "right out of the box."

However, he said, "later in the day, that offering was gone, and they were left at 101 bid."

The trader saw the new American Axle bonds continuing to drift lower as the day wore on, quoting them at one point as having dipped as low as 100 1/8 bid, 100 3/8 offered, "about a point lower than they were just an hour or two ago."

But a trader at another desk, questioned subsequently, said he had seen the bonds "above 101, and then they were down around 101." He saw the bonds going home at 101¼ bid, 101 5/8 offered, observing that "people like those secured bonds."

Wind blows a little higher

A trader said that Wind Acquisition Holdings' dollar-denominated 12¼% senior PIK notes due 2017 rose to 99¼ bid "right off the bat," and said the bonds traded at that level "a few times," before they were left at 99 bid, 99½ offered.

The $625 million issue priced earlier in the day at 98.325 to yield 12½%.

A second trader saw a trade in the bonds at 99¼ bid, but said that "there wasn't really a follow-through."

Primus quoted higher

A trader saw Primus Telecom's new 13% units bid as high as 101, adding "but I haven't seen the other side."

The Washington-area phone service provider priced its $130 million deal at 98.51.

Bumble Bee generates some buzz

The new Bumble Bee 7¾% senior secured notes due 2015 were seen by a trader to have moved up to par bid, 100¾ offered, up more than a point from the 98.823 level at which those bonds had priced earlier in the session.

Later on, he said, they tightened up a bit, to a late-afternoon level of par bid, 100½ offered.

Another trader saw the bonds going out at par bid, par 3/8 offered.

Pinnacle comes off its peak

From out of that same sector, a trader saw Pinnacle Foods Finance LLC's new 9¼% senior notes due 2015 "drifting in a little bit" Thursday from the strong levels which those bonds held on Wednesday, when they got as good as around 102 bid in initial trading, well up from par, where the Cherry Hill, N.J.-based branded packaged foods company's $300 million add-on issue had priced to yield 9¼%.

On Thursday, he said, the bonds had backed off those early gains and were heard offered at 101.

NII not much changed

A trader said NII Capital Corp.'s 8 7/8% notes due 2019 "got to be as tight" as 991/4.

A second trader saw the Reston, Va.-based Latin American wireless service provider's new deal at 99 bid, 99 5/8 offered, but said that "there might have been [only] one trade in them."

The company had priced its $500 million bond on Wednesday at 99.187 to yield 9%.

Ford Credit clings to gains

Among other recently priced deals, Ford Motor Credit Co.'s 8 1/8% notes due 2010 were seen by a trader on Thursday to have "hit a peak" around 98¾ bid, before coming off that position to finish at 981/2.

The bonds, he said, remained above the 98.304 level at which the Dearborn, Mich.-based auto loan financing arm of Number-Two domestic carmaker Ford Motor Co. had priced its $1 billion offering on Monday. After that pricing, the bonds headed lower and were seen on Monday and Tuesday to be struggling to barely maintain an offered level above issue.

However, the bonds had managed to firm above their issue price on Wednesday and was holding those gains on Thursday.

Market indicators move higher

Back among statistical measures of market performance not related to the new-deal market, a market source saw the CDX Series 13 index up 3/8 point on Thursday at 95½ bid, 96 offered, after having been unchanged over the previous two sessions.

But the KDP High Yield Daily Index meanwhile rose by 6 bps on Thursday to 70.40, after having gained 10 bps on Wednesday. Its yield widened by 1 bp to 8.36%, after having come in by that same amount the previous session.

In the broader market, advancing issues again led decliners for an eighth straight session on Thursday, by a seven-to-five margin.

Overall market activity, as measured by dollar-volume, jumped 36% from Wednesday's pace.

A trader said that "the clear focus" for most of the market was the new-issue activity, with everything else pretty much shoved to the back burner.

CIT volume soars as company emerges

That having been said, another trader called Thursday "CIT Day," in honor of the New York-based commercial lender's formal emergence from Chapter 11. "Hundreds and hundreds of millions [of dollars of bonds] traded, all across their capital structure," he declared.

Among the company's five issues of new series A 7% coupon bonds, the ones coming due in May 2013 were at 94 bid, 95 offered; the 2014 bonds were at 91 bid, 92 offered; the 2015 bonds were at 89 bid, 90 offered; the 2016 bonds were at 87 bid, 88 offered; and the bonds maturing in May 2017 were at 86 bid, 87 offered.

He said that all five issues of CIT's new series B 10¼% coupon bonds, with the same maturities as the 7% paper, "were at a premium," trading between par and 102 or between 101 and 103, with the shortest maturity, the May 2013, at the highest price and the May 2017 at the lowest price, "so they trade in a tighter range" than the 7% issues.

All of the new bonds from both series, however, "were up points on the day" on "a lot of volume."

The trader also said that CIT's old bonds, like its 5.60% notes due 2011 or its 5.65% notes due 2017, would be quoted at 75-76, which he said was unchanged from their recent levels, if they are trading, but he added that "if they're still out there, it doesn't really matter. I don't know how much longer they can trade" before they go away as part of the just-completed restructuring. "I'm not even looking at those anymore."

YRC keeps on truckin'

A trader said that said YRC Worldwide Inc.'s 8½% notes due 2010 had moved up to a 64-64½ context, which he called up about 5 points on the day, with "a lot of them traded," in apparent continued reaction to the Overland, Park., Kan.-based trucking line operator's Wednesday announcement that it would extend its pending debt-for-equity exchange offer until 11:59 p.m. next Tuesday, in hopes of getting enough bondholder support for the transaction to put it over the required 95% minimum threshold level. As of Wednesday, some 72% of the holders of the 8½% bonds and several convertible issues due in 2023 had tendered their bonds to the company.

The trader reiterated that "they had real good volume."

Embattled Dubai unit's bonds trade flat

A trader said that Dubai development company Nakheel PJSC's paper remained "pretty busy," seeing its 3.172% notes slated to come due on Dec. 14 push up to 54 bid, 57 offered from, Wednesday's 45 bid, 47 offered, the bond's biggest gain in nine months. Meanwhile, its 2¾% notes due 2011 rose to a 39-44 context from Wednesday's levels around 35-38. The company's floating-rate notes due 2010 were at 30-33, also higher than recent levels.

However, it was not good news that was pushing those bonds up from their recent lows; the trader noted that the bonds were now all trading flat, or without their accrued interest, a situation which frequently results in a rise in the nominal price of a bond which has defaulted or which is expected to default.

On the news front, there were no reported new developments in Dubai's efforts to negotiate a six-month debt-payment "standstill" on behalf of the emirate's state-run Dubai World development arm and the latter's subsidiaries such as Nakheel. Unless an agreement is reached, the latter will either have to pay off the $3.52 billion of 3.172% bonds on Monday, or default on them.

Pilgrim plan OK ignored

Traders saw little or no activity in the bonds of Pilgrim's Pride Corp. on Thursday, despite the news that the U.S. Bankruptcy Court for the Northern District of Texas had okayed the company's plan of reorganization - setting the stage for the Pittsburg, Tex.-based poultry producer to emerge from bankruptcy at the end of the year, mostly owned by international meatpacking giant JBS SA.

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