B&G Foods, Sabra bring deals; Concho, Memorial Production do add-ons; calendar keeps building

By Paul Deckelman and Paul A. Harris

New York, May 20 - The high-yield primary sphere remained active on Monday as the junk bond market headed into the run-up before next week's Memorial Day holiday break. Issuers were seen piling on in an effort to get their deals done before the holiday and the start of the traditional summer slowdown.

Four quick-to-market dollar-denominated, fully junk-rated transactions from domestic or industrialized-country issuers priced during the session, totaling nearly $1.9 billion of new paper, while at least a half-dozen other new deals totaling more than $2.7 billion were formally announced or just popped up on participants' radar screens.

The day's biggest deal was an upsized $850 million add-on to existing bonds that energy operator Concho Resources Inc. brought to market. That same sector also produced another add-on of $100 million from Memorial Production Partners LP.

B&G Foods, Inc., a maker of many brands of packaged foods well known to supermarket shoppers, filled up with own shopping cart with $700 million of fresh cash from its issue of eight-year notes. Health care-oriented real estate investment trust Sabra Health Care Limited Partnership came to market with a $200 million 10-year issue.

Traders said that the new B&G Foods bonds moved up by more than a point when they were freed for aftermarket dealings, while Memorial Production's add-on firmed modestly. The Concho and Sabra deals appeared too late in the session for any real secondary activity.

The traders saw strong gains for Friday's new deal from Murray Energy Corp., while Pacific Drilling SA's offering was up modestly from its par issue price.

Away from the deals which have actually priced, syndicate sources heard new deals announced and being shopped by the likes of Elan Corp. plc, Springleaf Finance Corp., Century Aluminum Co., Midstates Petroleum Co. Inc., Provident Funding Associates, LP and Vantage Oncology Inc., as well as several euro- or sterling-denominated deals from British issuers.

Apart from the primary activity, which is only expected to get heavier over the next several days, traders said that secondary market activity was muted. Statistical market performance indicators were mostly mixed on the day.

Concho massively upsizes

The primary market continued to generate heavy news volume, both in Europe and the United States, as the May 20 week got under way.

In Monday's dollar-denominated market, four issuers brought single-tranche deals to raise a combined total of $1.88 billion.

All of it came quick to market.

Concho Resources priced a massively upsized $850 million add-on to its 5½% senior notes due April 1, 2023 (existing ratings B1/BB+) at 103.75 to yield 4.884%.

The deal was upsized from $500 million.

The reoffer price came in the middle of the 103.5 to 104 price talk.

BofA Merrill Lynch, Barclays, Citigroup, J.P. Morgan and Wells Fargo were the joint bookrunners for the debt refinancing deal.

B&G prints at 4 5/8%

In other action, B&G Foods priced a $700 million issue of eight-year senior notes (B1/B+) at par to yield 4 5/8%.

The yield printed on top of yield talk.

Credit Suisse, Barclays, RBC, BofA Merrill Lynch and Deutsche Bank were the joint bookrunners.

Proceeds will be used to refinance the company's 7 5/8% senior notes due 2018, to repay the term loan B and revolver and for general corporate purposes.

Sabra at the tight end

Sabra Health Care and Sabra Capital Corp. priced a $200 million issue of 10-year senior notes (B1/BB-) at par to yield 5 3/8%, at the tight end of yield talk in the 5½% area.

BofA Merrill Lynch, Barclays, RBC and Wells Fargo were the joint bookrunners.

Proceeds will be used to redeem up to $113.75 million of 8 1/8% senior notes due 2018, with the remainder for general corporate purposes.

Memorial Production notes

Memorial Production Partners priced a $100 million add-on to their 7 5/8% senior notes due May 1, 2021 at 102 to yield 7.202%.

No price talk circulated the market, according to a trader who expressed the belief that the bonds were spoken for before the deal was announced on Monday morning.

Wells Fargo ran the books.

The Houston-based energy partnership plans to use the proceeds to pay down its revolver and for general partnership purposes.

Midstates starts roadshow

The deal calendar saw a $3 billion build-out on Monday.

All of the deals announced are expected to price before the end of the week.

Midstates Petroleum Co., Inc. and Midstates Petroleum Co. LLC began a roadshow on Monday for their $700 million offering of eight-year senior notes.

Morgan Stanley, SunTrust, BofA Merrill Lynch, RBC, SG, Citigroup, Goldman Sachs, Natixis and RBS are the joint bookrunners.

The Houston-based independent exploration and production company plans to use the proceeds to fund the purchase of its acquisition of producing properties, as well as developed and undeveloped acreage in the Anadarko Basin in Texas and Oklahoma, from Panther Energy LLC and its partners Red Willow Mid-Continent LLC and LINN Energy Holdings LLC.

Provident's $500 million

Provident Funding Associates and PFG Finance Corp. began a roadshow on Monday for a $500 million offering of eight-year senior notes.

BofA Merrill Lynch, Citigroup and Jefferies are the joint bookrunners.

Proceeds will be used to repurchase all of the company's 10 5/8% senior secured note due 2017 and for general corporate purposes.

Century Aluminum eight-years

Century Aluminum began a roadshow on Monday for its $250 million offering of eight-year senior secured notes.

Credit Suisse and Wells Fargo are the joint bookrunners.

The Monterey, Calif.-based producer of primary aluminum products plans to use the proceeds to refinance its 8% senior secured notes due 2014.

Springleaf starts roadshow

Springleaf Finance started a roadshow on Monday for its $250 million offering of non-callable seven-year senior notes (existing ratings Caa1/CCC+).

BofA Merrill Lynch, Citigroup and Credit Suisse are the joint bookrunners for the general corporate purposes deal.

Vantage Oncology four-years

Vantage Oncology plans to price a $250 million offer of four-year senior secured notes this week.

Jefferies is the left bookrunner. SunTrust and BMO are the joint bookrunners.

The Manhattan Beach, Calif.-based owner and operator of radiation oncology centers plans to use the proceeds to refinance bank debt.

Springs Window sets talk

Meanwhile, news surfaced on a deal that has been running an investor roadshow.

Springs Window Fashions talked its $470 million offering of eight-year senior secured notes (expected ratings B2/B/) to price with a yield in the 6½% area.

The deal is set to price on Tuesday.

J.P. Morgan and BofA Merrill Lynch are the joint bookrunners.

Elan dollar deal

The European high-yield produced a high volume of news on Monday as well.

Ireland's Elan Corp. began a roadshow in the United States on Monday for its $800 million offering of eight-year senior notes (expected ratings Ba3/BB-).

The roadshow wraps up on Wednesday.

Morgan Stanley is the bookrunner.

Proceeds will be used for general corporate purposes, including acquisitions, share purchases and capital expenditures.

Equiniti fixed/floating

England-based financial services provider Equiniti plans to price £440 million of 5.5-year notes in two tranches before the end of the week.

JPMorgan, Lloyds and Citigroup are the leads.

The deal is structured in tranches of fixed-rate notes, which come with two years of call protection, and floating-rate notes, which come with one year of call protection.

Proceeds will be used to repay bank debt.

IDH three-part deal

England's Integrated Dental Holdings (IDH) plans to price £400 million of senior secured notes in three tranches before the end of the week.

Target sizes for the tranches have been set.

The dental services provider plans to sell £200 million of 5.5-year first-lien fixed-rate notes (B2//), non-callable for two years, and £125 million of 5.5-year first-lien floating-rate notes (B2//), non-callable for one year.

In addition, IDH plans to sell £75 million of six-year senior secured second-lien fixed-rate notes (Caa1//), non-callable for three years.

Credit Suisse, JPMorgan, ING, Lloyds, Mizuho, SG and UBS are managing the sale.

Proceeds will be used to refinance debt.

Thomas Cook €525 million

In a euro-denominated offer, England's Thomas Cook Group began a roadshow on Monday for its €525 million offering of seven-year senior notes.

Barclays, BNP, Credit Suisse, DNB, Jefferies, Lloyds, Royal Bank of Scotland and SG are managing the sale.

Proceeds will be used to refinance bank debt.

Avanza dual tranche offer

Spanish transportation services provider Avanza Spain SAU plans to price €490 million of high-yield notes during the middle part of the present week.

A secured tranche features €315 million of five-year senior secured notes (B1//), non-callable for two years, being offered by special purpose vehicle Financing unit AG Spring Finance Ltd.

AG Spring Finance II Ltd. is offering €175 million of six-year senior unsecured notes (B2//), non-callable for three years.

Goldman Sachs, JPMorgan, UniCredit are the leads.

Proceeds will be used to refinance bank debt.

B&G Foods firms

In the secondary market, a trader saw the new B&G Foods 4 5/8% notes due 2021 bid at 101, but with no offered levels seen.

A second trader a little later on pegged the Parsippany, N.J.-based brand-name foods producer's quickly shopped deal at 101¼ bid, 101 3/8 offered.

That was up from the par level at which the maker of such familiar products as Cream of Wheat, Polaner jams and jellies, Ortega Spanish foods and Accent seasonings had priced its issue earlier in the session.

Memorial Production moves

A trader said that Memorial Production Partners LP's add-on to its 7 5/8% notes due 2021 had improved slightly to 102¾ bid, 103¾ offered.

That was up from the 102 level at which the tack-on transaction had priced earlier in the session.

The new Concho Resources add-on to its 5½% notes due 2023 and Sabra Health Care's 5 3/8% notes due 2023 arrived too late in the day for there to be any kind of meaningful aftermarket activity.

Murray Energy excels

Among the deals that came to market last week, a trader said that Murray Energy's new 8 5/8% senior secured second-lien notes "just flew."

He quoted the St. Clairsville, Ohio-based coal company's bonds at 103½ bid, 104¼ offered. That was well up from the par level at which the $350 million offering had priced on Friday, after having been downsized from $400 million originally.

Pacific Drilling eases

Friday's 5 3/8% senior secured notes from Pacific Drilling were seen by two separate traders going home on Monday at 100 3/8 bid, 100 5/8 offered.

That was off from levels as high as 101 5/8 to 101 1/8 on Friday, after the Luxembourg-based ultra-deep-water energy drilling contractor priced its $750 million transaction at par.

Sugarhouse holds most gains

Among Thursday's deals, a trader saw Sugarhouse HSP Gaming Prop. Mezz LP's 6 3/8% senior secured second-lien notes due 2021 having lost 1/8 of a point on Monday, going out at 101½ bid, 102½ offered.

That wiped out a similar-sized gain notched on Friday.

However, the bonds remained well above the par level at which the Philadelphia-based gaming operator had priced its $235 million of those notes. The paper had firmed to 101½ bid, 102 offered, right around present levels, in their initial aftermarket dealings.

First Data steady after fall

A trader said that First Data Corp.'s 11¾% senior subordinated notes due 2021were trading in a 100 1/8 to 100 3/8 bid range and then traded into a 100¼ bid.

That was well down from the initial aftermarket levels of around 101½ seen when the bonds began trading on Thursday.

The Atlanta-based electronic transaction processing company's $750 million issue, upsized from an originally announced $500 million, had priced at par late Wednesday but did not trade at that time.

By later Thursday, however, the early gains had faded and the bonds were seen still going to around the par bid level.

Quiet secondary

A trader said overall, "I didn't see too much going on" in the secondary market.

"It was kind of flat, maybe it was up a bit, but then towards the end we faded toward the negative side. But there really wasn't much trading going on, even on the new-issue front."

He said the major story was that the forward calendar continues "ramping up," with issuers announcing and bringing their new deals at mid-week, hoping to cram them in before the Memorial Day holiday break at the end of the week.

He said that Tuesday and Wednesday are likely to be quite busy, since "I'm sure that on Thursday, the market is going to be like a ghost town, and people will be making an early close Friday - no matter what they are officially supposed to do."

Market indicators mixed

Overall, statistical junk performance indicators were seen mixed for a second consecutive session on Monday.

The Markit Series 20 CDX North American High Yield index lost 5/32 of a point on Monday to end at 106 31/32 bid, 107 1/32 offered, after having risen by 3/8 of a point on Friday.

The KDP High Yield Daily index edged up by 1 basis point for a second consecutive session on Monday, to end at 76.45. Its yield was unchanged, at 5.03%, after having risen by 1 bp on Friday.

The widely followed Merrill Lynch High Yield Master II index gained 0.106% on Monday, after having eased by 0.001% on Friday.

That raised its year-to-date return to 5.452% from 5.34% on Friday. However, it remained below its peak level for the year of 5.835%, set on May 9.

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