New issue calendar busy; Sabine's deal boosts tendered debt; Alpha Natural issues firmer

By Stephanie N. Rotondo and Paul A. Harris

Phoenix, Oct. 1 - Despite it being a holiday for some folks Monday, the new issue calendar in the high-yield bond market was showing little signs of letting up.

"It continues to be the new issue story," a trader said. "Everyone is still searching for yield."

Though several deals were announced during the session, only a couple actually priced, including a $420 million 6½% issue from Sabine Pass LNG LP, a subsidiary of Cheniere Energy Partners LP.

The proceeds will be used to redeem the company's 7¼% notes due 2013, which traded higher in response.

Among other recent deals, Alpha Natural Resources Inc.'s new 9¾% notes due 2018 were on the active side. The company's older existing debt was not as active, but all issues were firmer.

Ally Financial Inc. paper was meantime gaining ground, following in line with the general market.

Overall market readings showed that high-yield bonds were running up right alongside equities Monday.

The CDX North American Series 19 High Yield Index moved up to 99 13/16 bid, par offered, according to a market source. The KDP High Yield Index rose to 74.31, with a 6.01% yield, versus Friday's reading of 74.24, with a 6.04% yield.

One trader said that while it was a "slow Monday," the generally strong feel of the market resulted in few credits being on the downside.

Additionally, the new issue calendar continued to load up for the coming week.

Hertz prices $1.2 billion

A busy primary market saw four issuers bring a combined six tranches of junk-rated notes - all of it drive-through business - for a grand total of $2.72 billion Monday.

The Hertz Corp. priced $1.2 billion of senior notes (B2/B) in two re-sized tranches.

The deal included an upsized $700 million tranche of eight-year notes, which priced at par to yield 5 7/8%. The tranche was upsized from $600 million. The yield printed at the tight end of yield talk that was set in the 6% area.

Hertz also priced a downsized $500 million tranche of 10-year notes at par to yield 6¼%. The tranche was downsized from $600 million. The yield printed at the tight end of the 6¼% to 6½% yield talk.

Barclays was the lead left bookrunner for the acquisition deal. Barclays, Deutsche Bank and Bank of America Merrill Lynch were the joint physical bookrunners.

BMO, BNP, Credit Agricole, Natixis, RBS and Wells Fargo were the joint bookrunners.

Tenet brings two tranches

Tenet Healthcare Corp. priced $800 million of non-callable high yield notes in two tranches.

The deal included a $500 million tranche of secured notes due June 1, 2020 (B1/B+), which priced at par to yield 4¾%. The yield printed at the tight end of the 4¾% to 5% yield talk.

In addition, Tenet priced a $300 million tranche of senior unsecured notes due Feb. 1, 2020 (Caa1/CCC+) at par to yield 6¾%, at the tight end of the 6¾% to 7% yield talk.

Barclays, Bank of America Merrill Lynch, Wells Fargo, Morgan Stanley, Goldman Sachs and Scotia were the underwriters.

The Dallas-based hospital chain plans to use the proceeds to fund tender offer for its 7 3/8% senior notes due 2013 and for general corporate purposes, including repayment of its revolver and for acquisitions.

Cheniere, on top of talk

Sabine Pass LNG, LP, a subsidiary of Cheniere Energy Partners, LP, priced a $420 million issue of eight-year senior secured notes at par to yield 6½%, on top of yield talk.

Credit Suisse and HSBC were the joint bookrunners for the debt-refinancing deal.

Basic Energy upsizes

Basic Energy Services, Inc. priced an upsized $300 million issue of 10-year senior notes (B2/B+) at par to yield 7¾%, also on top of yield talk.

Bank of America Merrill Lynch, Goldman Sachs and Wells Fargo were the joint bookrunners for the deal, which was upsized from $250 million.

The Midland, Texas-based oilfield equipment and services company plans to use the proceeds to fund the tender offer for its 7 1/8% senior notes due 2016 and for general corporate purposes.

Edgen Murray eight-year deal

Edgen Murray Corp. plans to price $575 million of eight-year senior secured notes this week.

Jefferies, Morgan Stanley and Bank of America Merrill Lynch are the joint bookrunners.

The Baton Rouge, La.-based steel company plans to use the proceeds to refinance debt.

SGS roadshow

SGS International Inc. plans to price a $210 million issue of eight-year senior notes (Caa1/CCC+) before the end of the present week.

Deutsche Bank, Credit Suisse, Bank of America Merrill Lynch and Goldman Sachs are the joint bookrunners for the LBO financing.

SPCM €250 million

French specialty chemicals manufacturer SPCM SA began marketing a €250 million offering of 7.75-year senior notes (expected /BB/).

BNP Paribas is the left bookrunner for the debt refinancing. Credit Agricole is the joint bookrunner.

Sabine new issue helps bonds

Sabine Pass LNG's new 6½% notes due 2020 priced late in Monday's session, with $420 million of the bonds being sold.

The proceeds from the offering will be used to tender for the company's existing$550 million of 7¼% notes due 2013.

Those that validly tender their holdings will receive $1,043.55 for each $1,000 of notes tendered. If received by the early deadline of Oct. 15, holders will receive an extra $30 per $1,000 of notes.

The news of the tender helped the bonds reach its call price. A trader deemed the bonds a point higher at 1071/2.

The general tender deadline is Oct. 29.

A boost for Alpha Natural

Alpha Natural Resources' new 9¾% notes due 2018 - a $500 million deal that priced Friday at 98.959 - were on the active side, traders said Monday.

One trader said about $20 million of the new notes changed hands, calling them up a touch at 99 1/8.

Another trader also pegged the new issue around the 99 mark.

The second trader noted that the Bristol, Va.-based coal producer's older debt - like the 6¼% notes due 2021 - were not that active, but were somewhat stronger around 84.

Another market source deemed the issue up slightly at 83¾ bid.

Alpha Natural intends to use proceeds raised in the bond sale to tender for a portion of its 3¼% convertible senior notes due 2015 and to add liquidity.

Ally paper rises

There was no fresh news out on Detroit-based bank Ally Financial, but the overall positive tone of the day helped the company's bonds gain ground.

A trader said the 8% notes due 2031 gained nearly a point to 1171/2. Another market source said the issue was up marginally at 116½ bid.

Even the company's preferreds were up, with the 8.125% series 2 fixed-to-floating rate trust preferreds (NYSE: ALLYPA) moving up 9 cents to $25.20.

ArcelorMittal gains

A trader said ArcelorMittal's 6¼% notes due 2022 gained almost a point on the day, with about $11 million bonds turning over.

He pegged the paper at 98 7/8.

The gains came even as the steelmaker confirmed that it was permanently shuttering its two furnaces in northeastern France.

The company had previously been ordered by the French government to find a buyer for the curtailed plants ahead of a permanent closure. Employees reportedly broke down outside the plant on the news, as about 629 workers could lose their jobs.

PDVSA inches higher

Petroleos de Venezuela SA was mostly higher on the day, despite a report that shows the Venezuelan-based state-owned oil producer doubled its dependency on the country's central bank.

A trader said volume in the high-yield space was "dominated" by PDVSA paper, with about $44 million of the 9¾% notes due 2035 trading, up nearly 2½ points to 85 7/8.

Another $33 million of the 8½% notes due 2017 inched up more than half a point to 91.

The 9% notes due 2021, however, were unchanged at 861/4, on $22 million traded.

Venezuelan newspaper El Universal published an article last week that showed PDVSA's financial aid from state-owned banks doubled to $26.5 billion from $12.5 billion the year before. The article noted that the heavy central bank-dependence came despite Venezuelan oil trading at $100 per barrel.

But revenues from PDVSA are used in large part to prop up the country's social programs, which have created a significant drain on the company's balance sheet.

Elsewhere in the oil arena, ATP Oil & Gas Corp.'s 11 7/8% notes due 2015 were "hovering" in a 19½ to 20 context, according to a trader.

Another trader said there was a "fair amount" of the bonds trading, seeing the debt move up to 19¾ bid, 20 offered from levels around 19 on Friday.

Broad market tidbits

In the rest of the high-yield space, a trader said Ford Motor Co.'s 5% notes due 2018 were steady around 109 5/8.

Nokia Corp.'s 5 3/8% notes due 2019, however, earned nearly a point, closing around 841/4.

Another trader said Momentive Specialty Performance Materials Inc.'s 9% notes due 2021 reversed their recent decline, ending "a little bit better" around 73.

And Eastman Kodak Co.'s 9¾% second-lien notes due 2018 were "maybe a little bit lower" at 63 bid, 64 offered.

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