Wynn brings $1.32 billion drive-by, Crown unit also prices, await Entravision; SLM off on numbers

By Paul Deckelman

New York, July 21 - Following in the footsteps of last week's successful quickly-shopped bond offering from NXP BV, Las Vegas-based casino operator Wynn Resorts, Ltd. decided to try its luck and came to market on Wednesday with a $1 billion-plus drive-by offering of 10-year secured bonds. Demand for the issue was strong enough that it was able to price a little inside of price talk - but in the secondary market, an initial upside push died down.

The existing secured bonds that Wynn plans to take out using the deal proceeds meantime were up between 2 and 3 points on the session, ending around the anticipated takeout level in moderately brisk dealings.

The day's other new deal was a euro-denominated issue of eight-year notes from a unit of Crown Holdings, Inc., which saw no domestic aftermarket activity. However, the dollar-denominated bonds which the Philadelphia-based packaging concern hopes to take out using a portion of the deal proceeds were seen up around a point.

Also in the primary scene, price talk emerged on Entravision Communications Corp.'s planned $385 million offering of seven-year secured notes, which is expected to price on Thursday morning.

And price talk came out on Accuride Corp.'s $300 million tranche of eight-year secured notes; order books were scheduled to close Thursday morning, with pricing seen possible after that.

Among recently priced issues, Interactive Data Corp.'s new eight-year bonds continued to trade at a premium to their par issue level, but little movement was seen in Calpine Corp.'s upsized drive-by offering.

Among issues with no new deal connections SLM Corp.'s bonds retreated, along with its shares, on unfavorable second-quarter numbers.

Wynn's winning hand

The big deal of the day was Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp.'s $1.32 billion offering (expected Ba23/BB+) of 10-year first mortgage bonds, which priced at par to yield 7¾%, on the tight side of previously circulating price talk envisioning a yield of around 7 7/8%.

A syndicate source characterized the new deal as oversubscribed, although he did not have any exact figures. "It went very well, obviously, given that it priced at the tight end" of talk. He added that "given that there was a tender associated with it, it helped the transaction a lot."

The issuers are wholly owned subsidiaries of Wynn Resorts, Ltd. The Las Vegas-based gaming company's Rule 144A/Regulation S offering, sold with registration rights, came to market via bookrunners Deutsche Bank, Bank of America Merrill Lynch, J.P. Morgan, Morgan Stanley, RBS Securities and UBS Investment Bank, pricing just hours after the company's morning announcement.

The issuers plan to use the net proceeds from the bond deal, along with the proceeds of a capital contribution from parent Wynn Resorts, Ltd., to fund a tender offer for all of Wynn Las Vegas LLC's $1.318 billion of outstanding 6 5/8% first mortgage notes due 2014, which the company announced separately but concurrently on Wednesday morning.

Traders saw the new Wynn bonds move up a little in the after-market. One saw the issue on the break at

100¼ bid, 101 offered and then a little later on, at 100 5/8 bid, 101 offered.

But after early gains, the new issue came down from its peak trading level for the day. A second trader subsequently saw the new Wynn bonds get as good as 100¾ bid, but then saw the paper dropping back in a two-sided market to 100¼ bid, 100 5/8 offered.

Another trader pegged the new bonds going out at 100 3/8 bid, 100 7/8 offered.

Outstanding Wynn bonds seen better

However, Wynn's outstanding 6 5/8% 2014 first mortgage notes, which are to be taken out using the new-deal proceeds, were seen having pushed up to around the anticipated takeout level in fairly busy trading, making those Wynn bonds among the most active issues of the day in Junkbondland.

A trader said that the bonds had moved to a 1031/2ish context.

At another desk a market source also saw those bonds around that 103.5 level, give or take a little, which was up about 3 points in absolute terms from where they had gone home on Tuesday, and up around 2 points from their previous round-lot trading level. Leaving out smaller-sized trader, round-lot dealings totaled around $14 million, the source said.

Wynn separately announced its tender for those 2014 bonds on Wednesday morning. Holders who tender their bonds by the consent deadline of 5 p.m. ET on Aug. 3 stand to receive total consideration of $1,034.38 per $1,000 principal amount, which includes a consent payment of $30 per $1,000 principal amount.

Crown comes to market

The day's other pricing involved the European arm of a well-known domestic junk bond issuer, as Crown European Holdings SA brought an upsized €500 million offering (expected Ba2/BB) of eight-year senior notes to market. That paper, carrying a 7 1/8% coupon, priced at par.

The quickly marketed deal by the European arm of packaging powerhouse Crown Holdings, Inc. was upsized from the originally planned €350 million.

The Rule 144A/ Regulation S offering, aimed at European rather than domestic buyers, was brought to market via bookrunners Bank of America Merrill Lynch, Barclays Capital, Deutsche Bank, Citigroup, RBS Securities and BNP Paribas Securities.

Crown plans to use the net proceeds of the deal to retire some or all of its outstanding €150 million of 6¼% first-priority senior secured notes due 2011 and all of its $200 million of 7 5/8% senior notes due 2013 issued by its Crown Americas LLC subsidiary, as well as for fees and expenses associated with the offering and for general corporate purposes.

Unlike Wynn, Crown did not actually announce a definite buyback transaction for either the 2011 or the 2013 bonds it plans to retire. However, the latter bonds, which had finished Tuesday's trading at 103 bid and which had last traded in a round lot just under that level back on July 9, pushed as high as 104 in Wednesday's dealings before ending just under that level, a market source said. Round-lot volume was a relatively robust $11 million.

Crown Americas' 7¾% notes due 2015, which are not slated to be retired with the new-deal proceeds, were also busily traded, with over $13 million trading hands in large-sized transactions. However, those bonds mostly hovered around their recent levels in the 105 neighborhood.

Enter Entravision

High yield syndicate sources heard that Entravision Communications Corp. is expected to price its $385 million offering of seven-year first-lien senior secured notes on Thursday morning. Official price talk on the deal, envisioning a yield of between 9% and 9¼%, emerged during the session, and the order books on the deal were scheduled to have closed at the end of business on Wednesday.

Citigroup, Wells Fargo Securities and UBS are the joint bookrunners on the Rule 144A/Regulation S deal, which is being sold with registration rights.

Entravision, a Santa Monica, Calif.-based Spanish-language media company which owns radio and television stations in many large markets, plans to use the net proceeds from the offering to fully repay outstanding debt under its existing syndicated bank credit facility, as well as for general corporate purposes.

Accuride deal talk issued

Price talk was also heard Wednesday on another upcoming issue - Accuride Corp.'s planned $300 million offering of eight-year first-priority senior secured notes.

Syndicate sources said that the deal is expected to price to yield in the 10¼% to 10½% area, including a discount from par of between 2 and 3 points.

Those sources said the books on the deal would be closing at 11:30 a.m. ET Thursday, with pricing expected sometime after.

That raised the possibility that the Evansville, Ind.-based maker of steel and aluminum wheels and other truck and commercial vehicle components might be moving up the timing of its deal in order to ride the wave of recently favorable primaryside conditions. After the company announced its plans for the offering this past Monday, sources heard that the company had begun a roadshow to market the deal to investors, and said at that time that the deal would likely price sometime during the July 26 week.

Credit Suisse and Deutsche Bank are the joint bookrunners for the Rule 144A and Regulation S deal, which is being sold with registration rights.

Accuride plans to use the proceeds from the new deal, plus approximately $10 million under a new asset-based revolving credit facility and cash on hand, to refinance the company's existing senior credit facility.

New Calpines fizzle out

Among recently priced issues, a trader said Calpine Corp.'s upsized $1 billion of 7 7/8% first-lien senior secured notes due 2020, which had priced on Tuesday at 99.146 to yield 8%, "traded about a point to 1¼ higher early in the day." He saw the Houston-based independent power generator's new deal get as good as a 101 bid, but after that, "they just died" and were left offered at 101 1/8.

Another trader saw the drive-by issue - which had been upsized to mega-deal territory from the originally announced $750 million - at around 100½ bid, 101 1/8, but he said he "did not see much of the bonds," suggesting that "maybe the underwriters were doing a good job keeping it all in-house."

New Interactive Data holds most gains

Tuesday's other new deal - Bedford, Mass.-based financial market data provider Interactive Data Corp.'s $700 million of eight-year notes - continued to hold at higher levels on Wednesday. A trader saw the new bonds at 102½ bid, 103 offered - little changed from the aftermarket seen after that transaction had priced.

Another trader said the bonds had gone out on Tuesday bid at 102 3/4-102 7/8, then traded early Wednesday as high as 103 bid. But then he said "it died" around 102 7/8 as trading volume dwindled.

Those bonds had priced Tuesday at par, and then moved up as accounts scrambled in the aftermarket to make up for the paltry allocations they received from the underwriters.

Market indicators stay mixed

Among established issues having no new-deal connections, a trader saw the CDX North American HY Series 14 Index ease by 1/8 point on Wednesday to end at 96 3/8 bid, 96 7/8 offered, after having gained ½ point on Tuesday.

The KDP High Yield Daily index meantime was up by 15 basis points on Wednesday to 71.82, after having risen by 3 bps Tuesday, while its yield tightened by 6 bps Wednesday to 8.27%, after having come in by 1 bp on Tuesday.

The widely followed Merrill Lynch High Yield Master II index finished Wednesday with a year-to-date return of 7.211%, versus Tuesday's close at 6.903%

Advancing issues led decliners for a lucky 13th consecutive session on Wednesday, by the same seven-to-five margin which had been seen on Tuesday.

Overall activity, represented by dollar-volume levels, declined by 8% on Wednesday, after having jumped 57% on Tuesday from Monday's anemic levels.

A trader characterized Wednesday's secondary market activity as "a boring day," adding that "it sure seems like a vacation day, for some reason."

Another trader said that junk "was firm in the morning, before equities took a dump" and fell during the afternoon on investor worry stoked by Federal Reserve Chairman Ben S. Bernanke's warning that the economy was unusually uncertain." That helped push the bellwether Dow Jones Industrial Average down 109.43 points, or 1.07%, to finish at 10,120.73. Other, broader indexes, such as the S&P 500 and the Nasdaq composite, were down even more on a percentage basis.

But among the junk names, he said, even after the early strength seemed to fade, there was no great downside move to correspond with stocks' slide. "It just didn't do anything," he said, noting that an actively traded issue - CIT Group Inc.'s 7% notes due 2016, which had traded in a 94-94¼ context during the morning, spent the afternoon bouncing between 94 1/8 and 941/4, effectively unchanged on the day, he said.

Sallie Mae slips

Among other specific issues, a trader said that SLM Corp.'s bonds were active at lower level after the Reston, Va.-based education financing company reported disappointing second-quarter numbers.

He saw its 8% notes due 2020 as Sallie Mae's most active issue, going out at the 87-87¼ level, after having traded as well as 89¼ on Tuesday, and around the 88- 88 ¼ area earlier Wednesday, "so they're down a good point or more."

At another desk, a trader said that the company's bonds were only down about 1/8 to ¼ point "on the short stuff" - for instance, its 5.40% notes due 2011. He quoted them on Wednesday at 99¾ bid, 99 7/8 offered, versus a par price on Tuesday, "so they were not really off that much."

On the other hand, he saw the 8% notes down a deuce at 87¼ bid, on "some volume.

"So the short paper held in nicely - but the long paper came in."

Another market source saw the 8s down some 2¼ points on the day at 87¼ bid.

Salle Mae's New York Stock Exchange-traded shares meantime slid $1.32, or 11.32%, to end at $10.34, on volume of 15.8 million shares, nearly three times the norm/

The company's bonds and shares headed south even though on Tuesday, it had posted a quarterly profit that exceeded analysts' estimates, as net interest income doubled. Analysts, however, said that investors were rattled because the company said it would be setting aside about $100 million more than previously expected to meet possible losses from its private-credit portfolio. They also noted that Sallie Mae - faced with the recent loss of a major revenue stream, as the Federal Family Education Loan Program, which supported private student lending with federal subsidies, ended earlier this month - had failed to provide any details on a much-awaited restructuring plan for its operations. The company said only that the restructuring would take place in the coming months.

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