Dobson, Packaging Corp. slate deals; Charter bounces after Friday gyrations but new Calpines slide

By Paul Deckelman and Paul A. Harris

New York, July 14 - Dobson Communications Corp. and Packaging Corp. of America announced plans Monday for sizable new bond issues - $900 million for Dobson and $550 million for Packaging Corp. - while several other deals were heard getting ready to begin roadshowing to potential investors.

In secondary dealings, Charter Communications Holding LLC notes - which had first firmed smartly in Friday's dealings after the company announced plans to sell $1.7 billion of new bonds and tender for outstanding debt, only to surrender most of its gains later on, were back on the upside Monday.

But despite the substantial news from Dobson and Packagin Corp., it was European companies that drove much of Monday's news in the high-yield primary market.

Eircom Ltd., the formerly-state owned Irish telecom, rang in with €1 billion equivalent while French bottle-maker BSN Glasspack uncorked a much smaller deal.

Meanwhile news emerged Monday on several other offerings that have been working their ways along the investor roadshows.

"Healthy," was a word of choice among two different sell-side officials who spoke Monday with Prospect News.

"There is a lot of cash out there that needs to be put to work," said one source, "so I believe the market remains healthy.

"Right now I think people are going to be focused on bringing deals that they intend to get done before Labor Day, which means we could continue to see the calendar build through the second week of August."

During Monday's session in the primary market much of the news emanated from the east side of the Atlantic.

The roadshow begins Tuesday for Eircom's €1 billion equivalent of notes due 2013 in dollar and euro tranches.

Deutsche Bank Securities will be lead bookrunner on the deal, which is expected to price on July 28.

Also heard to currently be in the eurobond market is BSN Glasspack. The French bottler will begin roadshowing its offering of €160 million of six-year non-call-three senior subordinated second lien notes on Tuesday via Citigroup and BNP Paribas. It will be issued through BSN Glasspack Obligation and is expected to price during the week of July 21.

In the U.S. market news of two split-rated offerings was heard Monday.

Packaging Corp. is expected to price $550 million of five and 10-year senior notes (Ba1/BBB-) during the present week. The Lake Forest, Ill. box-maker's deal, via Morgan Stanley and Citigroup, is being worked off the high grade desk, with significant interest anticipated among the junk accounts, according to an informed source.

Also St. Petersburg, Fla.-based Jabil Circuit, Inc. was heard Monday to be coming with $300 million of seven-year senior notes (Baa3/BB+).

The deal, via Banc One Capital Markets, Citigroup and JP Morgan, will also be worked off the investment-grade desk and is expected to price during the present week.

One source told Prospect News on Monday that at present the level of high yield interest in Jabil's deal, if any, is uncertain.

Timing emerged Monday on another offering from a Lake Forest, Ill. issuer that was spied in the vicinity of the junk bond market late last week.

The roadshow began Monday for agrichemical firm IMC Global's $310 million of 10-year senior notes (B1/B+), which are expected to price Friday via Goldman Sachs and JP Morgan.

And in a Monday press release Dobson Communications Corp. and American Cellular Corp., in which Dobson holds a 50% indirect interest, announced they would use $900 million of new senior notes as part of the financing to restructure $1.6 billion of American Cellular's debt. No bookrunning names or timing were imparted.

Price talk was heard Monday on three deals in the U.S. market, all three of which are expected to price Tuesday.

Price talk of 10%-10¼% emerged Monday on Columbus McKinnon Corp.'s sale of $100 million seven-year non-call-four senior notes (B3/B-), expected to price Tuesday afternoon via Credit Suisse First Boston.

Talk of 8¼%-8½% was heard on TransDigm Inc.'s $300 million of eight-year senior subordinated notes (B3/B-), also expected to price on Tuesday and also via Credit Suisse First Boston.

And finally price talk of 11% area was heard Monday on United States Can Co.'s sale of $125 million of second priority seven-year non-call-four senior secured notes (B3/CCC+), expected to price Tuesday via Citigroup.

Among recently priced new-deal offerings now swimming in secondary market waters, the new Calpine Corp. bonds - which had priced on Thursday at par but which had eased to bid levels slightly north of 99 on the break and had stayed there - continued to retreat on Monday.

The San Jose, Calif.-based independent power producer's new 8½% notes due 2010, 8¾% notes due 2013 and floating-rate notes due 2007 - all of them second-priority senior secured instruments - "were under pressure today," a trader said, although he had no idea why.

He quoted both fixed-coupon tranches as having fallen from 99.375 bid, 99.625 offered on Friday to 99 bid, 99.5 at the opening on Monday, and then having slid from there to as low as 96.5 bid, 97.5 offered by Monday's close, "quite a drop-off - but I don't know what's with them."

He also saw the company's established on-the-run senior unsecured notes off half a point to a point across the board, even as the company's New York Stock Exchange-traded shares gained slightly (up seven cents, or 0.94%, to $7.49), with no fresh news seen on the company.

Another trader likewise saw the new fixed-coupon Calpine bonds opening easier at 98.75 bid, 99.25 offered and pushing down to 97 bid, 97.5 offered, while the floaters opened at 99.25 bid, 99.75 offered and backpedaled to 98.75 bid, 99.25 offered.

Among the established issues, Calpine's 8 5/8% notes due 2010 were seen at another desk as having eroded to 78.5 bid - a two-and-a-half point loss on the day.

Elsewhere, Charter's bonds "were all over the map today," one of the traders said, noting that the St. Louis-based cable operator's benchmark 8 5/8% notes due 2009 - which had shot up as high as 80.5 bid early Friday on the news of the pending junk bond sale, only to give back most of its gains to end up about a point on the day Friday at 77.75 bid.78.75 offered - were back on the rise Monday, firming to 79.5 bid, 80 offered, not too far below it's peak level on Friday.

He saw Charter's zero-coupon/9.92% discount notes due 2011, which had gotten as high as 75 bid Friday before tumbling off the high to end at 72.5 bid,73.5 offered - as having once again risen on Monday, to 74.5 bid, 75.5 offered.

At another desk, Charter's 8 5/8s were quoted as good as 80.5 bid, 81.5 offered; its 8¼% notes firmed two points on the session Monday to 84 bid,86 offered; and its zero-coupon/11¾% subordinated notes improved to 57 bid.58 offered from Friday's 54.5 bid,56.5 offered.

Staying in the communications area for a moment, a trader there said that "all the wireless names got hit" as a result of "deal pressure" following Dobson's announcement that it would bring $900 million of new paper to market, although he did not see any specific quotes for American Cellular's 9½% notes, which are to be exchanged for a package of cash and stock as part of the restructuring the Dobson deal will help to fund.

He quoted Western Wireless Corp.'s new 9¼% notes due 2013, which had priced at par on Friday and had then improved to 101 bid, 102 offered going home, as having eased to par bid, 100.5 offered Monday.

On the other hand, he added, "a lot of telecom paper was trading around and there was pretty good demand" as buyers seemed to be looking for longer-dated stuff, in names such as AT&T Wireless and Lucent Corp., particularly the latter's 6.45% bonds due 2029, which he saw firmer at 69.25 bid, 70.25 offered. Lucent's 5¼% notes due 2008 were meantime at 95.25 bid, 96.25 offered, while its 7¼% notes due 2006 were at 93.5 bid,94.5 offered.

A trader saw the chemical names initially weaker, attributing it to fears of supply overhang arising from IMC Global's planned $310 million offering.

But he saw the sector firm on the news that International Specialty Products was offering to buy 10 million shares of Hercules Inc., doubling its holding in the other chemical company to 18%, a move Hercules opposes.

He didn't see any movement in the Hercules bonds - several traders noted that the chemicals maker was not one that they regularly followed - but saw Lyondell Chemical's 10½% notes due 2013 up about a point on the session from opening levels at 99 bid, while Equistar was also a point better, and the sector was "better across the board."

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