Ford Credit sells $1.75 billion, existing bonds slip; Valeant prices; GM dips; Six Flags up

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., April 6 - The secondary high yield market continued to lag some in volume on Tuesday, but a reemergence of new issues - particularly a drive by $1.75 billion sale from Ford Motor Credit Co. LLC - helped to generate some activity.

Ford's new issue traded up slightly upon its entrance to the marketplace. But as investors sold off other Ford issues to get into the new one, there was some general weakness in the automaker's debt.

Also in the autos, General Motors Corp.'s bonds fell, which one source attributed to profit taking. The company is scheduled to release its fourth-quarter results on Wednesday.

Six Flags Inc. filed its third plan of reorganization on Tuesday. In reaction, the amusement park operator's debt traded higher.

Cash bonds and the index ended the Tuesday session unchanged, according to a high-yield syndicate source who marked the CDX 14 at 99 bid.

Ford Credit brings $1.75 billion

Drive-by activity ramped up during Tuesday's primary market session.

Ford Motor Credit Co. LLC priced a $1.75 billion issue of 7% five-year senior notes (B1/B-/B+) at 99.478 to yield 7 1/8%.

The yield printed on top of price talk.

Barclays Capital, Citigroup, JP Morgan and RBS Securities were joint bookrunners for the quick-to-market deal.

Valeant upsizes

Also in drive-by action, Valeant Pharmaceuticals International priced an upsized $400 million issue of five-year senior unsecured notes (Ba3/BB-) at par to yield 7 5/8%.

The yield printed at the tight end of the 7¾% area price talk.

Goldman Sachs & Co., Jefferies & Co. and JP Morgan were joint bookrunners.

Meritage prices $200 million

Also driving through the Tuesday primary was Meritage Homes Corp.

The Arizona-based homebuilder priced a $200 million issue 7.15% 10-year senior unsecured notes (B1/B+/BB-) at 97.567 to yield 7½%.

Citigroup and JP Morgan ran the books for the debt refinancing.

MagnaChip at the tight end

MagnaChip Semiconductor SA and MagnaChip Semiconductor Finance Co. priced a $250 million issue of 10½% eight-year senior notes (B2/B+) at 98.674 to yield 10¾%, in a deal that ran a full roadshow.

The yield printed at the tight end of the 10¾% to 11% price talk.

The notes also underwent covenant changes.

Goldman Sachs& Co. was the left bookrunner. Barclays Capital, Inc., Deutsche Bank Securities, Inc. and Morgan Stanley & Co. Inc. were joint bookrunners.

Senior Housing sells split-rated bonds

Meanwhile, in a Tuesday split-rated deal, Senior Housing Properties Trust sold an upsized $200 million issue of 6¾% 10-year senior unsecured notes (Ba1/BBB-) at 98.926 to yield 6.9%, towards the tight end of the 7% yield price talk.

The deal size was originally $150 million.

UBS Investment Bank, Bank of America Merrill Lynch, Jefferies & Co. and Wells Fargo Securities ran the books.

LIN Television for Wednesday

Lin Television Corp. will host an 11 a.m. ET conference call on Wednesday for a $200 million offering of eight-year senior notes (Ba3//).

The deal is expected to price on Wednesday afternoon.

JP Morgan is the lead-left bookrunner for the bank debt refinancing. Deutsche Bank Securities Inc. is the joint bookrunner.

Merge Healthcare to bring $200 million

Merge Healthcare Inc. will host an 11 a.m. ET conference call on Thursday for a $200 million offering of five-year first-lien senior secured notes.

The deal is expected to price during the April 12 week.

Morgan Stanley has the books for the acquisition-related deal from the Milwaukee-based medical software developer.

Market indexes firm

Market sources saw the secondary market ending "unchanged to firm," in the words of one trader.

The KDP High Yield Index ended at 72.11, with a 7.82% yield. On Monday, the index reading was 72.10, with a 7.82% yield.

"I think the calendar is just starting to heat up," a trader said.

Ford slips on new issue

The $1.75 billion sale by Ford Motor Credit, the finance division of Ford Motor Co., resulted in some softening in the company's existing debt.

One trader speculated that the weakness was simply investors jockeying for position.

The trader said the new issue - a 7% five-year note priced at 99.478, with a yield of 7 1/8% - was "trading right where it came" to "marginally better" at 99½ bid, 99¾ offered.

"They probably would have liked to see it end up somewhat better," the trader said.

The trader also noted that Ford's other issues were on the active side, with about $40 million to $50 million of the 7¼% notes due 2011 trading at 103 bid, 103½ offered. He placed the 6½% notes due 2018 around 95 and the 8½% notes due 2020 around the 105 mark. The benchmark 7.45% notes due 2031 meantime closed at 94½ bid, 95½ offered and the 12% notes due 2015 closed around 120, with about "$20-odd million" changing hands.

At another desk, a trader called the 7.45% notes up ½ point to 94½ bid, 95½ offered. The trader also quoted the new issue at 99½ bid, par offered.

GM dips

General Motors paper drifted down as the Detroit-based automaker prepared to release its fourth-quarter results.

One trader said the benchmark 8 3/8% notes due 2033 were "weaker ahead of numbers," quoting them at 36½ bid, 37 offered.

"It's probably some people taking profits," he said of the weakness. The bonds had previously been on a slow, but steady, upward climb.

Another trader deemed the notes down ½ point at 36¾ bid, 37¾ offered.

GM will hold a conference call to discuss the results at 10 a.m. ET.

Also in the autosphere, a trader called Visteon Corp.'s 8¼% notes due 2010 "better" at 99 bid, par offered.

Six Flags gets a boost

Six Flags' debt ended the day "better," a trader said, as the company filed its third amended reorganization plan.

The trader placed the 9 5/8% notes due 2014 "around 35." Another saw the issue trading at 36 bid, a gain of 4 points on the day.

The filing of the amended plan formalized an agreement inked last month with junior bondholders. Under the terms of the plan, the bondholder group - which is backed by Stark Investments - will receive control of the New York-based amusement park operator upon its mergence from Chapter 11 protections.

The plan calls for the issuance of new debt and an equity infusion from the Stark-led bondholders in order to pay off secured lenders and bondholders who were part of the previous Avenue Capital Group-led plan.

In other Six Flags news, the company has reportedly approached investors of Cedar Fair Entertainment Co. - which operates the Knotts Berry Farm parks - regarding a potential merger. The investors, however, claim such discussions are premature.

Cedar Fair also announced that it would reject a takeover bid from Apollo Management, as the proposal undervalued the company.

Broad market steady to better

In the rest of the market, Blockbuster Inc.'s 9% notes due 2012 were "a little better," according to a trader, ending around 21.

Another trader said an "unusual amount" of MGM Mirage's 6 5/8% notes due 2015 traded at 83¼ bid, 83½ offered. He deemed that level "probably unchanged" to up slightly.

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