Calpine, Univision drive-bys price; new Univision firms; Exide, CityCenter, Cogent slate deals

By Paul Deckelman and Paul A. Harris

New York, Jan. 10 - The drive-by parade continued in Junkbondland on Monday, as Calpine Corp. and Univision Communications Inc. each priced opportunistically timed, quickly shopped bond offerings following several quick-to-market pricings last week to open the 2011 season.

Media company Univision's $315 million add-on to an existing tranche of 2021 bonds was heard to have firmed by almost a point following its afternoon pricing. However, power generator Calpine's $1.2 billion of new 12-year notes came to market too late in the day for any trading.

The forward calendar continued to grow with new deal announcements from Exide Technologies, Cogent Communications Group Inc., Columbus McKinnon Corp. and CityCenter Holdings, LLC/CityCenter Finance Corp., the latter deal a $1.1 billion two-part behemoth from the 50-50 Las Vegas development company joint venture between Dubai World and familiar junk issuer MGM Resorts International. MGM's existing bonds were meantime seen better.

Price talk emerged on CommScope Inc.'s $1.5 billion eight-year offering and on UCI International, Inc.'s upsized $350 million of eight-years, both expected to price on Tuesday.

Two other names, which have been on the calendar seemingly forever - Grifols SA, whose prospective $1.1 billion bond deal first hit new dealers' radar screens last summer, and Polymer Group Inc., mentioned as a possible issuer of $530 million of new bonds since early November - were heard by syndicate sources to have finally begun marketing their respective offerings, with pricing for both expected this week.

Spanish gaming company Cirsa Gaming Corp. SA was meanwhile heard shopping a euro-denominated add-on to an existing tranche of bonds.

Calpine $1.2 billion drive by

The second week of 2011 primary market activity got off to an impressive start as two issuers raised a combined $1.52 billion, and the forward calendar saw a hefty build up.

Calpine priced a quick-to-market $1.2 billion issue of 12-year senior secured notes (B1/B+) at par to yield 7 7/8%, at the wide end of the 7¾% area price talk.

Deutsche Bank Securities, Bank of America Merrill Lynch, Barclays Capital, Citigroup, Credit Suisse, Goldman Sachs & Co., J.P. Morgan Securities LLC, Morgan Stanley, RBC Capital Markets and UBS Investment Bank were the joint bookrunners for the debt refinancing.

Univision taps 8½% notes

Also doing a Monday drive-by deal was Univision Communications.

The Los Angeles-based Spanish-language media company priced a $315 million add-on to its 8½% senior notes due 2021 (Caa2/CCC+) at 101.75, resulting is an 8.191% yield-to-worst.

The reoffer price came slightly rich to the 101.50 area price talk.

Deutsche Bank Securities Inc., Bank of America Merrill Lynch, Barclays Capital Inc., Credit Suisse Securities and Wells Fargo Securities were the joint bookrunners for the debt refinancing.

Talking the deals

The Tuesday session figures to see primary market activity on both sides of the Atlantic.

CommScope talked its $1.5 billion offering of eight-year senior notes (B3/B) with an 8½% area yield.

The deal is set to price mid-day on Tuesday via JP Morgan.

Meanwhile, UCI International upsized its bond offering to $350 million from $250 million on Monday.

The company talked the eight-year senior notes (B3/CCC+) with an 8¾% area yield.

UCI shifted the $100 million upsize amount of the notes offer from its bank loan, reducing it to $350 million from $450 million.

Credit Suisse Securities, HSBC and Nomura Capital Markets are the joint bookrunners for the acquisition deal.

And Spain's Cirsa Gaming plans to price a €280 million add-on to its 8¾% senior notes due May 15, 2018 (/B+/) on Tuesday via Deutsche Bank.

The original €400 million issue priced at 97.8926 to yield 9 1/8 on April 28, 2010.

CityCenter plans giant deal

The new issue calendar saw a hefty buildup on Monday.

CityCenter Holdings, LLC and CityCenter Finance Corp. began marketing $1.1 billion of senior secured notes in two tranches.

The offering is comprised of a $500 million tranche of five-year first-lien notes (B2/B). Bank of America Merrill Lynch, Barclays Capital and RBS Securities are the joint bookrunners for this portion of the deal.

CityCenter is also marketing a $600 million tranche of second-lien PIK notes (Caa2/CCC). RBS Securities, Bank of America Merrill Lynch and Barclays Capital are the joint bookrunners for the PIK notes.

Proceeds will be used to repay borrowings on the company's credit facility and to fund an interest escrow account for a new credit facility and the first-lien notes.

The deal is set to price late this week.

CityCenter is a mixed use development on the Las Vegas Strip.

Grifols to sell $1.1 billion

Spain's Grifols plans to price a $1.1 billion offering of seven-year senior notes (B3/B) late in the present week.

Deutsche Bank, Nomura, BBVA, BNP Paribas, HSBC and Morgan Stanley are the underwriters.

Proceeds will be used to help fund the company's acquisition of Talecris Biotherapeutics Holdings Corp.

Exide lines up $675 million

Exide Technologies will start a brief roadshow on Tuesday for its $675 million offering of seven-year senior secured notes (/B/).

The deal is set to price on Thursday.

Deutsche Bank Securities is the left bookrunner for the Rule 144A and Regulation S offer. Wells Fargo and Morgan Stanley are the joint bookrunners.

Proceeds will be used to repay bank debt, to fund a tender offer for the company's 10½% senior notes due 2013, to fund working capital and for general corporate purposes.

Polymer Group starts roadshow

Polymer Group Inc. began a roadshow on Monday for a $530 million offering of eight-year senior notes.

The roadshow wraps up on Thursday and the notes are expected to be priced on Friday.

Citigroup Global Markets Inc. is the left bookrunner for the Rule 144A and Regulation S with registration rights offering. Morgan Stanley & Co. Inc., Barclays Capital Inc. and RBC Capital Markets Corp. are the joint book runners.

Proceeds will be used to help fund the buyout of the company by the Blackstone Group.

Cogent plans seven-year deal

Cogent Communications Group, Inc. began marketing a $150 million offering of seven-year senior secured notes on Monday.

Pricing is set for the middle of the week.

Bank of America Merrill Lynch, Citigroup and Deutsche Bank Securities are the joint bookrunners.

Proceeds will be used for general corporate purposes and/or repurchases of common stock or convertible notes, or to fund a special dividend to stockholders.

Columbus McKinnon to price this week

Finally, Columbus McKinnon plans to price a $150 million offering of eight-year senior subordinated notes later this week.

Credit Suisse, Bank of America Merrill Lynch and J.P. Morgan Securities LLC are joint bookrunners for the debt refinancing deal.

New Univision trades firmly

When Univision's new add-on notes were freed for secondary dealings, a trader pegged those bonds at 102½ bid, up ¾ point from the 101¾ level at which the deal had priced earlier in the afternoon.

A trader at another desk saw a two-sided market at 102½ bid, 103 offered, adding "they did respectably."

Calpine a no-show in trading

Traders said that new Calpine 12-year deal came to market too late for any kind of secondary dealings.

They also saw not much trading in the Houston-based power generating company's existing bonds.

A trader quoted its 7½% notes due 2021 at bid levels around 100 to 1001/4, down a little from 100½ earlier, but added that "it doesn't look like much happened there."

No excitement in Exide

A trader said that "nothing is going on in Exide" despite the news that the Milton, Ga.-based maker of automotive and industrial lead-acid storage batteries is bringing a new deal.

He saw just two small-sized trades in the 10½% notes due 2013 - the issue slated to be taken out with the proceeds from the new issue. The bonds traded at the 101½ bid level.

"They've been kind of flattish since mid-December," he said - a sign that investors had already anticipated that the company would refinance those bonds. "But there was not a lot of activity."

Windstream eases slightly

A trader saw Windstream Corp.'s 7¾% notes due 2020 at 103 1/8 bid, 103 3/8 offered - in from levels as high as 103¾ bid, 104¼ offered seen on Friday.

The Little Rock, Ark.-based telecommunications company brought a $200 million add-on to its $500 million of outstanding 73/4s. The deal priced at 103 to yield 7.233%, and traded as high as 103¾ bid later Friday.

Recent bonds hold their own

At another desk, a trader said that Windstream, and the other new issues which priced last week, such as Charter Communications Inc.'s $1.1 billion of 7% notes due 2019 and AmeriGas Partners, LP's $470 million of 6½% notes due 2021 "were all okay - but there was nothing really exciting about them," as they stayed around their recent trading levels.

St. Louis-based cable operator Charter's deal, which priced last Tuesday at 99.246 to yield 7 1/8%, remained around the 100¼ bid, 100½ context seen on Thursday and Friday.

Valley Forge, Pa.-based propane distributor AmeriGas' paper, which priced at par last Wednesday, was also seen tethered to around a 1001/4-100½ level on Monday.

MGM mostly better

MGM Resorts International's bonds were mostly being quoted at better levels, even as the Las Vegas-based gaming giant announced that its 50%-owned development joint venture, CityCenter will float $1.1 billion of new secured bonds.

A trader said the company's 5 7/8% notes due 2014 "have actually moved up a little bit in the last couple of days." He saw the issue trading with a 94-handle both Friday and Monday, having improved from around a 93-ish level on Thursday.

"They're not running away - but they are a little bit up from last Thursday's levels, nothing too dramatic."

He saw little or no activity in the MGM 6 5/8% notes due 2015, although he did see its 6 7/8% notes due 2016 actually traded down a little at 91 5/8 bid, versus last week's 92.

"Two different issues were going in different directions, so net-net, there was not much change" in the levels.

A market source at another desk saw the MGM 7½% notes due 2016 gain 5/8 point to end the day at 95.

Indicators mostly easier

Away from the new-deal arena, a trader saw the CDX North American Series 15 HY index down by ¼ point for a second consecutive session on Monday to end at 102½ bid, 102¾ offered.

The KDP High Yield Daily index meantime gave up 7 basis points on Monday to end at 74.79, after having risen by 6 bps on Friday. Its yield rose by 3 bps to 7.14%, after having come in by 7 bps on Friday.

The Merrill Lynch High Yield Master II index lost 0.007 on Monday - its first daily downturn in more than two weeks, dating back to mid-December. The index had risen by 0.070 on Friday.

The small loss left the index's year-to-date cumulative return at 0.866%, down from 0.872% on Friday, the peak level for 2011 so far.

Advancing names topped decliners for a 10th straight session on Monday, although their advantage narrowed to just a couple dozen issues out of the more than 1,300 which traded versus the not quite six-to-five edge they had held on Friday.

Overall activity, represented by dollar-volume levels, fell by 38% on Monday, on top of the 27% retreat seen on Friday from the previous day's level.

A trader characterized Monday as "just a boring day," and likened it to the proverbial "watching paint dry."

"The day really started off quiet," he said, adding that "it felt like the first day back after a long holiday. There was not much excitement."

Another trader said that apart from a little activity in the new Univision 8½% notes due 2021, "it's been dead."

SuperValu busy before numbers

A trader saw "a lot of [SuperValu] bonds trading," with the supermarket operator's 8% notes due 2016 trading at bid levels between 94 and 943/4. He noted that the bonds "have been under some pressure for a while." On Monday they fell from Friday's levels around 95-96.

At another desk, a market source noted that activity had been brisk in the bonds, with over $24 million having changed hands in round-lot transactions, and likely several millions beyond that in numerous odd-lot deals. He saw the 8s ending at 94½ bid, down about ½ point, after having gotten as good as par in intraday dealings, although that small trade was considered an outlier.

Yet another source saw the bonds going home down 1 3/8 point on the day at 94¾ bid.

The first trader noted that the company's New York Stock Exchange-traded shares were "only off 7 cents" on the day, or 0.81%, to end at $8.59 on volume of 16.3 million shares, more than twice the norm. "So why are they beating up the bonds so much?"

One possible explanation could be market worries about third-quarter earnings scheduled to be released before the stock market opens on Tuesday. Wall Street is looking for earnings to only come in around 30 to 32 cents per share, down from $109 million, or 51 cents per share, in the year-earlier quarter. Revenues are also expected to take a hit, with analysts on average anticipating about $8.7 billion in sales, versus $9.22 billion in the 2010 quarter.

"Discount chains, upscale grocers, rising food prices and cost-conscious consumers" are all factors in the weakened financial condition of the third-largest U.S. supermarket company behind industry leader Safeway Inc. and Kroger Co., the trader said. "They're hurting all supermarkets."

Despite SuperValu's size - over 2,500 food and food/drug combination stores scattered across most of the lower 48 states - it still faces difficulty from the expansion of retailing giant Wal-Mart Stores into many of its traditional market areas nationwide. "It's probably just the competition," he said, as the main factor in the chain's problems, both from Wal-Mart and other discounters and from SuperValu's larger industry rivals Safeway and Kroger.

He also noted other recent negative news developments, including the chain's decision to close 20 underperforming stores, and the abrupt and unexplained immediate departure of SuperValu's executive vice president, merchandising, Steve Jungmann. "That's probably not helping them."

Rafaella near Friday's level

A trader said that he "didn't really see" anything further going on in the bonds of Rafaella Apparel Group Inc., the New York -based women's apparel maker being acquired by fashion powerhouse Perry Ellis International.

Friday's news of that deal sent Rafaella's small (about $70 million remaining) and normally little-traded 11¼% senior secured notes slated to come due on June 15, zooming up to par from prior levels in the mid-70s.

On Monday, with the major move having already been made, a trader saw "just a few trading, just a touch over par." He'd seen the bonds trading at the start of the year around 76 bid, on just a few odd-lot trades at that time.

However, a second trader said that he saw the bonds creep up to around 100¼ on "some pretty good volume."

But he doubted there would be any further upside.

"They're callable. So par to 100½ is pretty much the market."

It was announced on Friday that Perry Ellis International had agreed to acquire Rafaella for $70 million plus warrants to buy 106,564 shares of stock.

Auto names on the upside

In the autosphere, a trader said that Motors Liquidation Co.'s 8 3/8% benchmark bonds due 2033 gained ¾ point, to finish at 37 bid, 37½ offered. Those bonds of what used to be General Motors Corp. - which changed its name after it reorganized in Chapter 11 in 2009, separating out its profitable automaking operations into a separate new entity called General Motors Co. - have been firmer over the last several sessions after the new carmaker reported better than expected December and 2010 sales figures. Traders see the "old GM" bonds as a proxy for the new company's stock, which benefitted from the sales gain, since Motors Liquidation holds about 10% of the "new GM" shares for eventual distribution to bondholders and unsecured creditors.

GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 meantime were seen up ¼ point at 107¾ point, 108¾ offered.

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