AMC, Sequa, returning Eldorado price $1.5 billion; Six Flags next; inVentiv, Dematic slate deals

By Paul Deckelman and Paul A. Harris

New York, Dec. 10 - High-yield issuers resumed their year-end borrowing binge on Monday, with syndicate sources hearing of a trio of quick-to-market deals totaling more than $1.5 billion pricing during the session.

Cable channels operator AMC Networks Inc. priced $600 million of 10-year notes, which moved up by more than a point when the new bonds were freed for trading.

Eldorado Gold Corp. also did a $600 million deal, in this case an upsized offering of eight-year bonds - essentially the same deal that the precious metals mining concern had taken off the table back on Nov. 16, citing market conditions. This time around, the new deal priced without a problem and firmed solidly in the secondary.

Metal coatings manufacturer Sequa Corp. did a $350 million five-year transaction, which priced at a discount and then moved back above par in the aftermarket.

Traders said that deals that priced on Friday continued to do well on Monday, notably Altice Financing SA/Altice Finco SA, both of whose dollar-denominated tranches were seen jumping more than 4 points after the break.

Tops Holding Corp. and Kenan Advantage Group were trading well above par, while Rex Energy Corp. moved up to around the par level after having priced at a discount.

Talk was heard out on Six Flags Entertainment Corp., TPC Group, Inc., Cleaver-Brooks Inc. and Brookfield Residential Properties, Inc., each of which is expected to price during Tuesday's session.

Several new deals were either formally announced or emerged on market players' radar screens: inVentiv Health, Inc., Michael Foods Holding, Inc., Dematic SA, Ancestry.com Inc. and Harbinger Group Inc.

Secondary market traders said activity was focused around the new deals and, aside from that, mostly on split-rated crossover names. Statistical market performance indicators continued to climb across the board.

AMC Networks' drive-by

A week that is expected to be a big one in the high-yield primary got off to a big start on Monday.

And the active deal calendar swelled.

AMC Networks priced a $600 million issue of 10-year senior notes (B1/BB-) at par to yield 4¾%.

The yield printed at the tight end of the 4¾% to 5% yield talk.

Bank of America Merrill Lynch was the left lead bookrunner.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Barclays, RBS Securities Inc., Morgan Stanley & Co. LLC, Credit Agricole Securities (USA) Inc., Goldman Sachs & Co., UBS Securities LLC, SunTrust Robinson Humphrey Inc., U.S. Bancorp Investments Inc., Guggenheim, Scotia Capital (USA) Inc., BNP Paribas Securities Corp., Deutsche Bank Securities Inc. and RBC Capital Markets LLC were the joint bookrunners.

Proceeds will be used to repay the term loan B facility in full in an amount equal to $587.6 million, with the remaining proceeds of about $400,000 to be used for general corporate purposes.

Eldorado Gold returns

After pulling its deal due to market conditions in mid-November, Eldorado Gold returned to price an upsized $600 million issue of eight-year senior notes (Ba3/BB) at par to yield 6 1/8%, at the tight end of yield talk set in the 6¼% area.

J.P. Morgan Securities LLC, Citigroup Global Markets, HSBC and Bank of America Merrill Lynch were the joint bookrunners for the quick-to-market deal, which was upsized from $500 million.

Proceeds will be used to fund mine development, repay revolver debt and for general corporate purposes.

Sequa five-year deal

Sequa priced a $350 million issue of 7% five-year senior notes (Caa1/CCC+) at 98.5 to yield 7.37%.

The coupon printed on top of coupon talk. The reoffer price came at the rich end of the 98 to 98.50 price talk. The yield came tight to the 7.365% to 7.488% yield talk.

Citigroup Global Markets, HSBC, J.P. Morgan Securities LLC, Goldman Sachs & Co., Morgan Stanley & Co. and RBC Capital Markets were the joint bookrunners for the quick-to-market deal.

The New York-based diversified aerospace and industrial company plans to use the proceeds to refinance debt including its 11¾% notes and the 13½% notes.

KraussMaffei at tight end

In the euro high-yield market, KraussMaffei AG priced a €325 million issue of eight-year senior secured notes (B2/B) at par to yield 8¾%.

The yield printed at the tight end of the 8¾% to 9% yield talk.

Joint bookrunner Credit Suisse will bill and deliver. Barclays and RBC were also joint bookrunners.

Proceeds will be used to help fund the acquisition of KraussMaffei by Onex Corp.

Talking the deals

Dealers issued price talk on offerings, setting the stage for a busy mid-week.

TPC Group talked its $655 million offering of eight-year senior notes (B3/B) to yield 8¾% to 9%.

Merrill Lynch, Jefferies and Morgan Stanley are the joint bookrunners.

Six Flags Entertainment talked its $600 million offering of senior notes due Jan. 15, 2021 (confirmed B3/expected B+) to yield 5¼% to 5½%.

Wells Fargo is the left bookrunner. Merrill Lynch and Barclays are the joint bookrunners.

Brookfield Residential Properties upsized its offering of eight-year senior notes (B2/BB-) to $500 million from $400 million on Monday.

The Calgary, Alta.-based land developer and homebuilder talked the notes to yield 6½% to 6¾%.

Credit Suisse, Citigroup and J.P. Morgan are the joint bookrunners.

Cleaver-Brooks talked its $285 million offering of seven-year senior secured notes (B2/B) with a yield in the 9% area.

RBC is the left bookrunner. UBS and SunTrust are the joint bookrunners.

And Greece's FAGE International SA and FAGE USA Dairy Industry Inc. talked a $250 million add-on to their 9 7/8% senior notes due Feb. 1, 2020 (confirmed B3/existing B) at 100 to 100.5.

The deal is expected to price on Wednesday.

Citigroup is the bookrunner.

Harbinger starts Tuesday

The deal calendar grew with offerings expected to price before the end of the week.

Harbinger Group plans to start a roadshow on Tuesday for its $650 million offering of seven-year senior secured notes (B3/B).

Deutsche Bank, Jefferies and Macquarie are the joint bookrunners.

The New York-based diversified holding company plans to use the proceeds to refinance its existing secured notes and put cash on the balance sheet.

inVentiv five-year deal

inVentiv Health plans to price a $550 million offering of five-year senior secured notes (B2/B) on Wednesday morning.

Citigroup, Merrill Lynch, Credit Suisse, Deutsche Bank, Jefferies and Wells Fargo are the joint bookrunners for the debt refinancing.

Ancestry to price Friday

Ancestry.com plans to price a $300 million offering of eight-year senior notes (Caa1/CCC+) on Friday.

Morgan Stanley, Barclays, Credit Suisse, Deutsche Bank and RBC are the joint bookrunners. HSBC is the co-manager.

Proceeds, along with equity contributions from Permira IV, Spectrum Equity Investors, the Rollover Investors and the Co-Investors, will be used to complete the acquisition of the company and related transactions and to provide cash on hand to be used for general corporate purposes.

Michael Foods toggle deal

Michael Foods Holding, Inc., the parent of Michael Foods Group, Inc., plans to price a $275 million offering of senior PIK toggle notes due 2018 (Caa1/CCC+) on Tuesday.

Goldman Sachs and Merrill Lynch are leading the deal.

Proceeds, together with cash on hand, will be used to pay cash dividends on and/or make other payments on the parent's equity interests.

Dematic eight-year deal

Dematic is marketing a $250 million offering of eight-year senior notes (expected ratings Caa1/CCC+).

J.P. Morgan, Credit Suisse and Barclays are leading the deal.

Proceeds will be used to help fund AEA Investors and Teachers' Private Capital's buyout of the company from Triton.

Day's deals move up

When AMC Networks' new bonds were freed for secondary dealings, a trader saw the paper trading in a context of 101-to-101½ bid.

A second trader saw that issue at 100¼ bid, 101¾ offered, while yet another pegged them at 101¼ bid, 102½ offered, all versus the deal's par issue price.

A trader quoted Sequa's new deal at par bid, 101 offered, although he was "not sure if the offering is still there."

A little later on in the afternoon, though, a second trader did see two-sided markets in that same par-101 area, while noting that the bonds had actually priced at 98.5, thus giving the new issue a decent break.

One of the traders saw Eldorado Gold's new issue bid at 1001/2, though he had not yet seen an offering.

A little later on, a second trader saw the opposite situation. He had seen an offering at 1001/2, but "didn't see any two-sided market in it."

A third trader, though, did see the gold minders bonds going out at 101 3/8 bid, 101 7/8 offered.

High altitude for Altice

Traders saw firmness in the bonds that priced during Friday's session - probably none more so than Altice Group's two dollar-denominated tranches, which were part of a larger deal also involving a euro-denominated piece.

Atice - a French telecommunications company controlled by international investor Patrick Drahi, with wireless and cable TV interests in Israel - sold $450 million of 7 7/8% notes due 2019 and $400 million of 9 7/8% notes due 2020; a trader said that both tranches. After pricing Friday at par, they "were wrapped around 105."

A second trader said that the 2019 bonds had been at 104 bid, 105 offered going home on Friday, but he only saw an offering around 105 in the morning. Later, he quoted them at 104 5/8 bid, 105 1/8 offered. However, he said that he "had not seen a lot of trading in them."

He also saw the 2020 notes trading around 104 5/8 bid as well.

Yet another trader did not see any action in the dollar bonds, but did see a 103¼ bid, 104¼ offered level during the morning on the company's new €400 million of 8% notes due 2019, which had also priced at par on Friday as well.

None of the traders had a ready explanation for hefty aftermarket gains racked up by all three of the Altice tranches.

Proceeds will be used to refinance the company's debt and to finance the acquisition of the remaining 31% stake in Hot Mobile, an Israeli wireless telecom operator, that current 69%-owner Altice does not already own.

Other Friday deals firm

Apart from Altice, other deals that priced on Friday were also mostly seen more than holding their own on Monday.

A trader saw Rex Energy's 8 7/8% notes due 2020 trading at par bid, 100½ offered, although a second trader did quote them at 99¼ bid, par offered, which was not too much changed from the 99.3 level at which the quickly shopped $250 million offering from the State College, Pa.-based independent oil and gas exploration and production company had priced on Friday.

Rex originally shopped its offering around to potential investors last month, but withdrew it on Nov. 27, citing unfavorable market conditions. However, as conditions approved, the deal returned to active consideration on Thursday and priced on Friday.

Another deal that priced below par on Friday, but was said to be doing well on Monday, was Prince Mineral Holding Corp.'s $285 million issue of 11 ½% first-lien senior secured notes due 2019, which priced at 98.828 to yield 11¾%, after having been upsized from its originally planned $260 million amount.

A trader saw the New York-based specialty chemicals producer's bonds on Friday afternoon bid at 1001/2, but with no offer level. However, by Monday, the bonds had moved up to 101¼ bid, 102 5/8 offered, another trader said.

Among the bonds that priced at par on Friday, a trader quoted upstate New York supermarket operator Tops Holding's 8 7/8% senior secured notes due 2017 at a wide 100 5/8 bid, 102 7/8 offered. However, another trader located them at 102 7/8 bid, 103 7/8 offered, which seemed more in line with the 102-to-103 context in which the bonds had been seen on Friday.

The second trader called that a 7/8 of a point gain on the day.

Kenan Advantage Group's 8 3/8% notes due 2018 were seen trading at 102 bid, 102¾ offered on Monday, a gain of half-point on the day from the 101½ bid level at which North Canton, Ohio-based logistics and liquid bulk transportation company's $200 million issue had gone home after pricing earlier at par.

Traders saw no aftermarket activity Monday in Armstrong Energy, Inc.'s 11¾% senior secured notes due 2019. The St. Louis-based coal producer's $200 million had also priced at par.

Indicators keep climbing

Away from the new-deal arena, statistical junk market performance indicators were up across the board for a fifth straight session on Monday.

The Markit Series 19 CDX North American High Yield index rose by a quarter-point on Monday to end at 100¾ bid, 100 7/8 offered, its fifth consecutive gain. The index had risen by 1/8 point on Friday.

The KDP High Yield Daily Index meantime notched its 15th consecutive gain on Monday, rising by 3 basis points to close at 75.06, after having jumped 17 bps on Friday. Its yield came in by 2 bps Monday, to 5.78%, its 15th straight narrowing, after having declined by 6 bps on Friday.

And the widely followed Merrill Lynch High Yield Master II index rose by 0.11% on Monday, its 16th straight gain, on top of the 0.145% rise reported on Friday.

The latest advance lifted its year-to-date return to a new peak level for the year of 14.942%. It was the eighth consecutive new peak, moving up from the previous high of 14.816% recorded on Friday.

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