JW Aluminum prices as calendar building continues; new Sprint Nextel bonds trade actively

By Paul Deckelman and Paul A. Harris

New York, Nov. 13 - The high-yield new-deal market got back to work on Tuesday following the Veterans Day holiday break with a $200 million issue of five-year notes from JW Aluminum Co. This marked the sole offering of purely junk-rated, dollar-denominated paper from a domestic or developed-country borrower seen to have priced by the close.

But primaryside players were keeping busy nonetheless, as a number of deals were heard being shopped around for likely pricing this week. These included prospective issues from familiar issuers Arch Coal, Inc., which is planning $350 million of seven-year senior notes, probably as early as Wednesday, and AK Steel Corp. with its own $350 million offering of six-year senior secured notes, also on Wednesday. Price talk has already emerged on the Arch deal.

Syndicate sources heard that Sealed Air Corp. is expected to bring an $850 million issue of eight-year and 10-year notes as Thursday's business.

Eldorado Gold Corp. and Walter Energy Inc. each expect to price a $500 million offering of eight-year senior notes by the end of the week.

Rex Energy Corp. is also readying a $250 million offering of eight-year senior notes for likely pricing this week.

Among recently priced deals, Sprint Nextel Corp.'s giant 10-year deal from last week saw brisk aftermarket activity as the new issues dominated the secondary arena. The new deals from Land O' Lakes Inc. and CyrusOne LP continue to trade well above their respective par issue prices.

Forward calendar grows

The active forward calendar doubled in size, and market sources gave two reasons.

First, the timeline to get a deal done ahead of the four-day Thanksgiving holiday weekend, which gets under way on Nov. 22, is a short one, they say, adding that possibly the last sure day to price a deal will be Nov. 19.

Also, with the equity markets in the United States having sold off since the presidential election, sooner seems better than later in terms of deal execution, according to debt capital markets bankers. They added that although junk prices in the secondary market have generally held in, the new issue premium is creeping higher.

Arch Coal talks $350 million

Most, if not all, of the business on the active forward calendar is expected to clear before Friday's close.

Two of Tuesday's announcements involved deals that are expected to price on Wednesday.

One of those is Arch Coal's $350 million offering of senior notes due June 15, 2019 (existing ratings B3/B-), which is talked to yield 10½% to 10¾%, including an original issue discount of 4 to 5 points.

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

AK Steel secured notes

The other deal, which was announced on Tuesday as Wednesday's business, was the AK Steel $350 million offering of six-year senior secured notes.

Merrill Lynch, Deutsche Bank, Citigroup, Wells Fargo, Goldman Sachs and UBS are the joint bookrunners for the debt refinancing and general corporate purposes deal.

Sealed Air bullet tranches

Sealed Air plans to start a brief roadshow on Wednesday in New York City for an $850 million two-part offering of non-callable senior notes (existing ratings B1/BB-).

The deal is set to price on Thursday.

A tranche of eight-year notes is being led by joint bookrunners Merill Lynch, Citigroup, Credit Agricole Morgan Stanley and RBS.

A tranche 10-year notes is being led by joint bookrunners. Merrill Lynch, Citigroup, BNP, J.P. Morgan and Rabobank.

Proceeds will be used to repay bond debt.

Rex Energy via Wells Fargo

Rex Energy is prepping a $250 million offering of eight-year senior notes (expected B3/confirmed B-), which is expected to price before the end of the week.

Wells Fargo is the left bookrunner for the debt refinancing and general corporate purposes deal. KeyBanc, SunTrust and RBC are the joint bookrunners.

Eldorado Gold $500 million

Eldorado Gold expects to price a $500 million offering of eight-year senior notes (Ba3/BB) on Friday.

J.P. Morgan, Citigroup, HSBC and Merrill Lynch are the joint bookrunners.

The Vancouver, B.C.-based gold producer plans to use proceeds from the offering to fund mine development, to repay the company's revolving credit facility and for general corporate purposes.

Walter Energy starts roadshow

Walter Energy plans to price $500 million eight-year senior notes on Friday following a roadshow that began on Tuesday.

Morgan Stanley, Barclays, Merrill Lynch, Citigroup and Credit Agricole are the bookrunners.

Proceeds will be used to repay debt under the term loan A, term loan B and the company's revolver and for general corporate purposes.

Thompson Creek secured deal

Thompson Creek Metals Co. Inc. started a roadshow on Tuesday in New York for its $350 million offering of senior secured first-priority notes due February 2018.

Deutsche Bank has the books.

The diversified North American mining company plans to use the proceeds to replace and terminate its existing revolver, as well as to fully fund the remainder of capital expenditures at the Mt. Milligan copper and gold mine and for general corporate purpose.

GrafTech eyes Friday pricing

GrafTech International Ltd. started a roadshow on Tuesday for a $300 million offering of eight-year senior notes (expected ratings Ba2/BB+).

The deal is expected to price on Friday.

J.P. Morgan, Merrill Lynch, BNP, RBS and Wells Fargo are the joint bookrunners for the debt refinancing.

JW Aluminum unseen

Although it priced fairly early in the day - around noon ET on Tuesday - traders did not see any aftermarket activity in JW Aluminum's new $200 million of high-coupon five-year notes

Sprint bonds trade actively

A trader opined that there was "not a heck of a lot of action" in Junkbondland on Tuesday "besides the new Sprints kind of bouncing around" at bid levels between 99½ and 993/4.

The Overland Park, Kans.-based No. 3 U.S. wireless provider's quickly shopped $2.28 billion offering of 6% notes due 2022 priced at par during Thursday's session.

On Tuesday, the trader said, the new bonds clearly were the most active issue, with some $30 million having changed hands.

A second trader saw the Sprints trading a little off from Friday's levels, pegging the bonds at 99½ bid in the morning and seeing them in a 991/4-to-99¾ offered context for "most of the day."

Recent deals trade around

Among recently priced offerings other than the wireless operator's behemoth of an offering, a trader saw the CyrusOne LP 6 3/8% notes due 2022 continuing to hold the gains they notched since pricing at par a week ago.

He saw them in a 1021/2-to-102¾ range, describing Monday's activity in the bonds as "kind of quiet," with "probably better buyers."

The data-center operator - a unit of Ohio-based telecommunications company Cincinnati Bell Inc. - priced its $525 million issue last Tuesday, after having upsized the deal from the originally announced $500 million. It priced the bonds along with its CyrusOne Finance Corp. subsidiary.

Among other new issues holding their own amid a generally softer high yield market, the trader saw Celanese US Holdings LLC's 4 5/8% notes due 2022 trading at 101¼ bid, 101¾ offered.

The Dallas-based global technology and specialty materials company priced $500 million of the bonds last Wednesday at par.

Land O'Lakes' new 6% notes due 2022 were being quoted as high as 102¼ bid on Tuesday. The Arden Hills, Minn.-based branded food and agriculture supply cooperative priced $3000 million of the bonds at par, after having upsized from an originally planned $250 million.

A trader said that Terex Corp.'s 6% notes due 2021 "seem to be holding up," locating the bonds at 100 5/8 bid, 100 7/8 offered, which he said was "about where the bonds were last week."

A second trader also saw the notes in that 100 5/8-to-100 7/8 area.

The Westport, Conn.-based diversified manufacturer priced a restructured $850 million senior notes transaction at par on Thursday. It was originally supposed to do just $530 million of those bonds, along with a similar €250 million tranche from the company's Terex International Financial Services Co. unit.

However, the euro tranche was dropped and the dollar-bond issue was upsized accordingly.

Traders said that dealings in the new issues remained the focus in the high-yield secondary on Tuesday, with no real standouts among established bond issues.

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