Midday Commentary: Schaeffler, Realogy new deals hold near initial trading levels

By Paul Deckelman

New York, April 24 - High-yield traders said that Tuesday's two main deals were holding on Wednesday morning around the initial aftermarket levels those deals reached late Tuesday after pricing.

One said that Schaeffler AG's 4¾% senior secured notes due 2021 were bid at 1001/2.

The German ball-bearing manufacturer had priced $850 million of those notes at par on Tuesday through its Schaeffler Finance BV unit, along with a tranche of euro-denominated five-year senior secured paper. In initial late-afternoon aftermarket dealings, the bonds had moved up to 100 3/8 bid, 100 7/8 offered.

The trader also said that Realogy Group LLC's 3 3/8% notes due 2016 were trading on Wednesday in a 100¼ to 100½ context, around where the Parsippany, N.J.-based real estate and relocation services provider's upsized $500 million deal had closed on Tuesday. "There were better sellers around," he said.

Another trader quoted the new bonds around 100 3/8 bid, on "no volume to speak of."

Realogy, along with Sunshine Group (Florida) Ltd Corp., had priced the quickly shopped bonds at par late Tuesday after the deal was upsized from an originally announced $450 million.

Among names reporting earnings Wednesday morning, SuperValu Inc.'s 8% notes were at 105½ bid, 106 offered, down ¼ point; Ford Motor Co.'s 6% notes were at 102½ bid, 103¼ offered; and Elan Corp.'s 6¼% notes were pegged at 117.81 bid, 118 offered.

Overall, a trader described the day's early action as "fairly quiet."

The KDP High Yield Daily index firmed to 75.73 at mid-morning, up 3 basis points from Tuesday's close, while its yield came in by 3 bps to 5.39%.

The Markit Series 20 High Yield CDX index was down 3/32 point early Tuesday at 104 19/32 bid, 104 23/32 offered.

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