Crown Castle, three other drive-bys price $445 million in U.S.; Ineos brings €160 million

By Paul A. Harris

St. Louis, Nov. 17 - Nearly all the action in Monday's junk bond market took place in the new issue arena, according to sources. Five deals - four of them drive-bys - priced for a total of $445 million and €160 million.

Meanwhile in the aftermarket sources agreed on one thing: all the action was in the primary.

"Everybody was sleeping," one trader told Prospect News late in the session

"There is cash out there but there is nothing happening in the secondary," the source added. "People are sitting around looking at stocks hoping that in light of stocks coming off the secondary would get shaken a little bit so that there would be a little more value out there.

"But so far there is no give-back, even in the secondary."

That said, sources did report seeing an improvement in the existing paper of Revlon.

However Prospect News heard no dissenting voices with regard to where the action was on Monday: the primary market. And the preponderance of it was business that was markets over the telephone, as opposed to on the road.

Houston wireless tower operator Crown Castle International Corp. showed up early with $300 million of 10-year paper, via JP Morgan, that was talked at 7½%-7¾%. By session's end the senior notes (Ba3 expected/CCC) had priced at a significant discount of 96.603 to yield of 8%.

In the U.S. market, Monday, the remaining three deals were add-ons.

Thornburg Mortgage, Inc. a residential mortgage lender, priced an upsized $55 million add-on to its 8% senior notes due May 15, 2013 (Ba1/BB-) at 104.5 resulting in a 7.208% yield to worst. The deal was increased from $50 million. The bookrunner was Credit Suisse First Boston.

The original upsized $200 million offering priced at par on May 8, so the company did substantially better in the Monday transaction.

Miami, Fla. real estate investment, finance and management company LNR Property Corp. priced another $50 million add-on to its 7¼% senior subordinated notes due Oct. 15, 2013 (Ba3/B+) at 100.5, resulting in a 7.166% yield, with Deutsche Bank Securities running the books.

The original upsized $300 million issue priced at par on Oct. 15, so LNR Property also fared somewhat better. It brought a further $50 million on Oct. 23, also at par.

And Concentra Operating Corp. priced a $30 million add-on to its 9½% senior subordinated notes due Aug. 15, 2010 (B3/B-) at 106.5, resulting in an 8.057% yield to worst. Credit Suisse First Boston and Citigroup were joint bookrunners on the deal from the Addison, Tex. health care services company.

The original $150 million priced at par on Aug. 5, 2003, so Concentra will pay less interest on the new notes.

Meanwhile in Europe Ineos Vinyls Finance plc - a subsidiary of EVC International NV - priced €160 million of eight-year senior notes due (B3/B-) at par to yield 9 1/8%. Deutsche Bank Securities and UBS Investment Bank were the underwriters for the deal from the manufacturer of PVC polymers, compounds and films, which is headquartered in Eijsden, Netherlands.

The forward calendar continued to fill during the opening session of the Nov. 17 week, with roadshows underway or pending on $950 million of new business.

Equistar Chemicals, LP expects to price a $200 million add-on to its 10 5/8% senior notes due May 1, 2011 (B2/BB-) on Tuesday, according to a syndicate source. An investor conference call is scheduled for Tuesday morning.

JP Morgan, Citigroup and Banc of America Securities are joint bookrunners on the offer from the Houston-based joint venture between Lyondell Chemical Co. and Millennium Chemicals Inc. The original $450 million priced April 16.

The roadshow kicked off Monday for Nortek Holdings's offering of $350 million of eight-year senior discount notes, which are expected to price on Wednesday.

Deutsche Bank Securities is the bookrunner on the offering from the parent of Providence, R.I.-based Nortek, Inc., a manufacturer and distributor of building, remodeling and indoor environmental control products for the residential and commercial markets.

MediaNews Group, Inc. will begin a two-day roadshow on Tuesday for $300 million of 10-year senior subordinated notes, also expected to price Wednesday. Deutsche Bank Securities and Banc of America Securities are joint bookrunners on the deal from the Denver-based parent of Garden State Newspapers.

And the roadshow starts Tuesday for Chevy Chase Bank's $175 million of 10-year subordinated debentures (Ba3/BB-). Pricing on the Washington, D.C. bank's deal, via bookrunner Friedman Billings Ramsey and co-manager Legg Mason, is expected on Nov. 24.

Although no firm dates have been set, informed sources told Prospect News that Bombardier Recreational Products, a Montreal based maker of jet skis and other recreational equipment, would be bringing $200 million of 10-year senior subordinated notes in a deal that is expected to launch in early December via Merrill Lynch & Co.

Even less has been revealed about a deal coming from United Agri Products North America, to help fund Apollo Management LP's $600 million acquisition of the company from ConAgra Foods Inc. in a management-led buyout. A bond deal of unspecified size, in conjunction with a $500 million five-year asset-based revolver, are heard to be components of the financing. UBS Investment Bank is heard to be the bookrunner on the bond deal.

Finally on Monday Poster Financial Group's eight-year notes (B2/B) were upsized to $155 million from $140 million and price talk of 8¾%-9% was heard on the deal. It is expected to price midday Tuesday via Lehman Brothers.

Meanwhile in the secondary market very little consensus developed from conversations on Monday with traders and other sources.

News that ArvinMeritor had raised its hostile bid for rival automotive parts firm Dana Corp. to $2.7 billion seemed to generate little or no action on the existing paper of Dana.

"I don't think it's going to happen," one trader conjectured, adding that the Dana's 6½% paper due 2009, as well as the 6½% due 2008 was unchanged.

Another source selected Dana's 6 ½% notes due 2009, and spotted them at 99 bid, 100 offered, also unchanged.

However another source saw Dana Corp.'s paper "up two points today," and reported the 9% notes at 112 bid, 113 offered, the 8 3/8% notes at 104.5-105 bid, the 61/2s of 2009 at 99 bid, 100 offered, the 10 1/8% notes at 112 bid, 113 offered, the 6at ½% due 2008 at 99 bid, "trading pretty close to the 6½% notes of 2009."

Another source of unity among secondary sources, Monday, involved the advancing fortunes of the existing notes of Revlon Inc. News Friday that owner Ronald Perelman's MacAndrews & Forbes Holdings Inc. agreed to provide up to $125 million in loans to the cash-strapped cosmetics company continued to lift the company's paper.

"That has caught a bit of a bid on the Perelman news from Friday," a trader commented. "They were a point better today," the source added, spotting the 8 5/8% notes due 2008 at 52 bid, 54 offered; "the secured" 12% notes of 2005 "as good as 100 bid, which is up a couple of points from before the news."

Also the trader had the Revlon 9% paper of 2006 and the 8 1/8% of 2006 - both senior pieces - at 69 bid, 71 offered.

Another secondary source, who reported not seeing any trading in the paper on Monday, had the 8 5/8% notes at 55 bid, 56 offered, and the 12% notes at 99.5 bid, 100.5 offered.

One other confluence of secondary market color, on Monday, involved the bonds of bankrupt telecom giant World Com, which on Friday had filed with the Securities and Exchange Commission documents specifying that it would delay releasing its 10-Q financial report for the latest quarter, attributing that delay to an ongoing review of its finances.

"World Com is a little softer today," one trader said, adding that "all of the existing debt is down about a point."

Another trader had WorldCom's corporate paper "off, around 35.5 bid, 36 offered. That's in about half a point," the trader added.

Still another had "the World Com benchmarks (the 7½% of 2011, the 6.40% of 2005, the 8¼% due 2031)" 35.625 bid, 37.625 offered, "off half a point."

Prospect News heard divergent news, however, on the paper of San Jose, Calif. power generator Calpine Corp.

One source had Calpine's 8½% paper due 2011 at 73 bid, 74 offered and the 8½% notes due 2008 at 73.5 bid, 74.5 offered, "maybe up slightly."

Another had the Calpine 8 5/8% notes due 2010 down to 72.50 from 73.25.

Still another trader who claimed to have seen them had the power company's paper unchanged.

One thing that all secondary market sources agreed upon Monday was that the aftermarket was in a state of "hibernation."

"The market is quiet and a touch softer," said one. "Retail was non-existent today. There's no participation at all.

Another trader said "Things were not weaker today, but trading was so slow that it's hard to get spots on stuff."

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