Post-holiday session finds market stable, subdued; Visant slides as merger blocked; AMD rises

By Stephanie N. Rotondo

Phoenix, April 21 - The high-yield bond market was fairly unchanged after the long post-holiday weekend.

However, given that it was "Easter Monday," as one trader put it, some desks were still empty, resulting in muted volume.

The trader noted that most of Europe was also closed for the day and that the Boston Marathon was going on.

Visant Holdings Corp. was "one of the more volatile names," a trader said, as the Federal Trade Commission advised blocking a merger of Jostens Inc. with American Achievement Group Holding Corp.

The bonds fell 7 to 8 points in response.

Meanwhile, Advanced Micro Devices' debt was swinging toward the upside as investors reacted to the company's "upbeat" earnings late last week, a trader said.

In junkier credits, NII Holdings Inc.'s bonds "continue to creep up," a trader said, seeing the 10% notes due 2016 and the 7 5/8% notes due 2021 gaining half a point to 38 and 28, respectively.

Genco Shipping & Trading Ltd. announced it had filed for bankruptcy Monday due to weak charter rates. But a trader said there was "no real activity" in the company's 5% convertible notes due 2015.

He pegged the notes in a 96 to 98 context in odd-lot trading. Another market source placed the issue in a 95 to 96 range, which compared to 94-95 previously.

The stock (NYSE: GNK) was unchanged at $1.70.

And, a trader said Momentive Performance Materials Inc. continued to be talked about as investors try to figure out what will occur under bankruptcy proceedings.

"They're still talked about, but there isn't a lot of trading," the trader said, seeing the 9% notes due 2021 holding around 75.

Numericable massively upsizes

No deals priced on Monday.

With the European markets closed because of Easter Monday, the primary market news flow was muted.

However there was still ample news from Europe.

Numericable Group AG massively upsized its six-part dual-tranche offering of first-lien notes (Ba3/B+) to €8.04 billion equivalent from €6.04 billion equivalent and set price talk on the deal.

A €500 million tranche and an upsized $1.8 billion tranche of five-year notes are talked to yield in the 5% area. The dollar-denominated tranche is upsized from $920 million. The five-year notes become callable after two years at par plus 75% of the coupon.

Both tranches of eight-year notes are upsized. The euro-denominated tranche is upsized to €1.6 billion from €1 billion and is talked to yield 5½% to 5¾%. The dollar-denominated tranche is upsized to $4.2 billion from $2 billion and talked to yield 6% to 6¼%.

The long bonds are 10-year notes that come with five years of call protection. They are coming in a downsized €915 million tranche and a $2 billion tranche, both talked to yield 3/8% behind the respective euro- and dollar-denominated eight-year notes.

Books close Tuesday, and the deal is set to price on Wednesday.

Global coordinator JPMorgan will bill and deliver. Deutsche Bank and Goldman Sachs are also global coordinators.

For the euro-denominated notes, Barclays, BNP Paribas, Credit Agricole CIB, Credit Suisse, Morgan Stanley, ING, Banca IMI and Natixis are the bookrunners.

For the dollar-denominated notes, Barclays, BNP Paribas, Credit Agricole CIB, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. and ING are the bookrunners.

Proceeds will be used to fund the purchase of SFR.

In conjunction with the upsizing of the bond deal, the concurrent term loan package is reduced to €2.84 billion from €5.6 billion, the source said.

Numericable is a cable operator. SFR is a mobile phone company.

Altice talks tranches, yields

Altice SA set tranche sizes and yield talk for its €4.15 billion equivalent offering of eight-year senior notes (B3/B), a market source said on Monday.

A $3.15 billion tranche is talked to yield in the 8% area.

A €1.9 billion tranche is talked to yield in the 7½% area.

The deal is believed to be playing to demand in the range of €12 billion to €14 billion, a trader said.

Late Monday the dollar-denominated tranche was still being discussed in the 8% context, as talked, the trader said, but added that it could easily come tighter.

Meanwhile conversations on the euro-denominated tranche were pushing toward 7 3/8%, the trader said, noting that at 7 3/8% it appears to be coming at the tight end of yield talk in the 7½% area.

Interestingly, the emerging markets desk will trade the Altice deal, in this trader's firm, owing to the fact that the company has interests in Israel and the Dominican Republic.

Books close on Tuesday, and the notes are expected to price on Wednesday.

Goldman Sachs is the left joint global coordinator. Deutsche Bank and JPMorgan are also joint global coordinators.

The syndicate of underwriters also includes Barclays, BNP Paribas, Credit Agricole CIB, Credit Suisse, Morgan Stanley, ING and Natixis.

The Rule 144A and Regulation S notes come with three years of call protection.

The Luxembourg-based cable and telecommunications company plans to use the proceeds to help fund the acquisition of Numericable and to repay debt.

Hearthside Food roadshow

Hearthside Food Solutions plans to start a roadshow on Tuesday for a $270 million offering of eight-year senior notes (Caa1/CCC+), according to a market source.

The roadshow is set to wrap up on Thursday.

Goldman Sachs, Barclays, Deutsche Bank Securities Inc., Fifth Third and KeyBanc Capital Markets are the joint bookrunners. SMBC Nikko is the co-manager.

The Rule 144A and Regulation S notes come with three years of call protection.

Proceeds will be used to help fund the buyout Hearthside Foods, a Downers Grove, Ill., bakery and contract food manufacturer, by Goldman Sachs and Vestar Capital Partners from Wind Point Partners.

Market steady post-holiday

Market indicators were little changed as the long holiday weekend came to an end, even as traders lamented a lack of activity.

The KDP High Yield index was steady at 74.99, with a 5.2% yield. The CDX North American High Yield index was meantime off a touch at 107 bid, 107 1/8 offered, according to a source.

Visant hit as merger stalls

Visant Holdings' 10% notes due 2017 took a hit after the FTC recommended a merger between Jostens - owned by Visant - and American Achievement be blocked.

One trader called the issue down 7 to 8 points at 93 bid, 94 offered. Another market source placed the notes in a 93 to 95 context, versus 100 7/8 to 101 previously.

A third source saw the bonds dropping 7-plus points to 931/2.

The $486 million merger was originally announced in November and had been expected to close in July, assuming all regulatory hoops were jumped through. But the FTC on Thursday said it was seeking a court order to block the merger, alleging that it would have hurt the class ring-buyers market.

"A combination of two of the three leading manufacturers would have led to higher prices and lower quality for the students and their parents who purchase these rings," Debora Feinstein, bureau of competition director, said in a news release.

Due to the FTC's ruling, the parties of the merger agreement have agreed to terminate the offer.

No termination fee will be paid.

AMD rises

Advanced Micro Devices saw its bonds gaining ground as investors reacted to the company's late Thursday earnings release.

One market source said the 7¾% notes due 2020 inched up a point to 104 bid. Another trader said the debt was "definitely quoted higher," though he didn't see much in the way of trading.

He called the 7½% notes due 2022 up "about 2 points" around 103.

A third source deemed the 7½% notes 2½ points better at 102 7/8.

On Thursday, the chipmaker reported a smaller first-quarter loss of $20 million, or 3 cents per share. That compared to a loss of $146 million, or 19 cents per share, the year before.

Excluding one-time items, the company would have turned a 2-cents-per-share profit.

Revenue increased 28% to $1.4 billion.

Analysts polled by FactSet were expecting the quarter to turn out even in terms of profit on revenues of $1.34 billion.

The Sunnyvale, Calif.-based company also provided guidance for the current quarter, predicting $1.44 billion in revenue - well above the $1.35 billion analysts are forecasting.

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