High-yield market muted due to holiday; Navistar downgraded, bonds little changed; Sprint firms

By Stephanie N. Rotondo and Paul A. Harris

Phoenix, Sept. 17 - Rosh Hashanah, the Jewish New Year, began on Monday, meaning there was a "lighter crowd" during the day's trading session, a trader said.

The trader also noted that the muted high-yield arena might have also been taking a breather after the run-up seen late last week.

For the day, he called the market sideways.

"It's pretty much unchanged," said another trader.

A third market source added that there were no new issues priced.

Navistar International Inc.'s debt was "probably lower," a trader said, though there was a lack of significant volume in the name. The trader was surprised, given that Fitch Ratings downgraded the struggling vehicle manufacturer.

Meanwhile, traders gave mixed reports on Sprint Nextel Corp. On Monday, Time Warner Cable said it was selling of its stake in Clearwire Corp., of which Sprint owns a majority stake.

Also mixed on the day was Caesars Entertainment Corp., though there was no fresh news to act a catalyst.

Market indexes end sideways

A trader said that the market was "sideways" on Monday, which was echoed in the day's KDP High Yield index reading.

The index closed unchanged at 75.16, with a 5.75% yield.

The CDX North American High Yield index meantime ended the day 101 15/16 bid, 102 1/8 offered, down a quarter-point, according to a market source.

General Cable starts roadshow

General Cable Corp. began a roadshow on Monday for its $550 million offering of 10-year senior notes (expected ratings B1/B+), according to a market source.

An investor call is set for 12:30 p.m. ET on Tuesday.

The deal is expected to price late in the present week.

J.P. Morgan, Deutsche Bank, Wells Fargo, Credit Agricole and Goldman Sachs are the joint bookrunners for the debt refinancing deal.

Algeco Scotsman deal

Algeco Scotsman plans to price €1.675 billion of notes in two tranches during the Sept. 24 week, according to an informed source.

The deal includes a €1 billion tranche of seven-year senior secured notes, which comes with three years of call protection, and €675 million of eight-year senior unsecured notes, which come with four years of call protection.

Deutsche Bank is leading a syndicate of underwriters, which also includes Barclays.

Proceeds will be used to repay debt and to fund the acquisition of Ausco Modular.

Par Pharma sets talk

Par Pharmaceutical Cos. Inc. talked its $490 million offering of senior notes (Caa1/B-/) with a yield in the 7½% area.

The deal, which is being led by Goldman Sachs, is expected to price on Tuesday.

Navistar downgraded

Navistar International's debt was "probably lower," but not all that active, a trader said, despite a downgrade from Fitch.

"There was not one trade on the downgrade," the trader remarked. "That's kind of weird."

He said the 8¼% notes due 2021 likely fell to 96½ bid, 97½ offered, down from 97½ bid, 98 offered previously.

Another trader said the debt was wrapped around the 97 mark.

Fitch, citing heightened liquidity risk and negative manufacturing free cash flow, cut its rating on the Lisle, Ill.-based vehicle manufacturer to CCC from B-.

The outlook is negative.

Sprint on the rise

Traders gave mixed reports on Sprint Nextel's debt on Monday, though the bonds were still generally on the firm side.

One trader called the 6% notes due 2016 down a point at 104 3/8, while the 7% notes due 2020 slipped just a touch to 1061/2.

Another market source, however, called the 6% notes up marginally at 1053/4.

Time Warner Cable announced that it was selling off its stake in Clearwire. As noted, Sprint is a majority stakeholder in the company. TWC purchased 46.4 million shares in 2008 for $550 million. However, that stake is worth closer to $73 million at current prices.

Overland Park, Kan.-based Sprint has been holding up Clearwire as it struggles to upgrade its network. Clearwire, for its part, has been looking into partnerships and asset sales to raise cash.

Caesars mostly higher

A trader said Caesars Entertainment's 10% notes due 2018 were about a point weaker on the day, trading around 701/2.

Other issues within the structure, however, were up about a point or more across the board.

The 11¼% notes due 2017 earned over a point to close at 110. The 10¾% notes due 2016 finished around 821/2, up 1½ points, and the 12¾% notes due 2018 ended around 791/4.

There was no fresh news out on the Las Vegas-based casino operator.

Broad market mixed

In the rest of the high-yield space, a trader saw Vulcan Materials Inc.'s 6½% notes due 2016 losing a point to 1091/2.

The trader also called Arch Coal Inc.'s 7¼% notes due 2021 a point weaker at 91.

Another trader said that Eastman Kodak Co.'s debt was lower but quiet. The 9¾% second-line notes due 2018 were at 63½ bid, 64½ offered and the 7¼% notes due 2013 wrapped around 12.

On the upside was Exide Technologies Inc.'s 8 5/8% notes due 2018, which a trader deemed "up a couple points" around 89.

He also saw Momentive Performance Materials Inc.'s 11½% notes due 2016 rising to 64, while another trader said Gap Inc.'s 5.95% notes due 2021 were up over 2 points at 112 3/8.

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