Beazer Homes slates Tuesday deal as primary pauses; Synovus, Sorenson get socked

By Paul Deckelman and Paul A. Harris

New York, May 3 - On a day in which no new junk bonds priced - the first time in literally weeks that has happened - Beazer Homes USA Inc. announced plans on Monday for a $300 million offering of eight-year notes, with high yield syndicate sources hearing that the Atlanta-based builder will likely price the new deal on Tuesday to restart the recently red-hot primary pricing pace.

Tuesday is also the day that Beazer's neighbor, Americold Warehouse Investment Portfolio LLC -- the two companies are actually a little more than a mile down the road from one another - is expected to price a $300 million offering of 10-year secured notes.

Order books are meanwhile expected to close on Tuesday, with pricing possible after that, for Lantheus Medical Imaging, Inc.'s $225 million offering of seven-year notes, the price talk on which emerged on Monday.

Kratos Defense & Security Solutions, Inc. and MCE Finance Ltd. - the latter a unit of Macau casino operator Melco Crown Entertainment Ltd. - were heard by the primary sources to be starting roadshows Tuesday for their respective deals, while two other overseas firms - Brazilian construction company Odebrecht and Mexican manufacturer Elementia SA - will hit the road on Wednesday to market their deals.

Omnicare Inc. meantime announced plans for a $300 million subordinated deal to fund a concurrently announced tender offer, with timing on the bond deal still up in the air.

In the primary market, Synovus Financial Corp.'s bonds slid after the company cancelled its previously announced offer to exchange newly issued shares for the notes.

And Sorenson Communications' bonds swooned badly on reports that reimbursement schedules for providers of telecommunications relay services for the hearing- and speech-disabled could be sharply reduced under a proposal submitted to the government.

No deals - for one session

No high-yield issues priced during the first session of May 2010.

However the May 3 session figures to be an anomaly, as issuers are scurrying to bring deals - especially debt refinancing deals - into the market before Memorial Day, market sources say.

"If everybody's pipeline looks like ours, May will be the biggest month of the year," one debt capital markets banker told Prospect News following Monday's close.

Some prospective issuers will likely get their deals into the light in time to price before Memorial Day on May 31 while others who wish to do so ultimately will still be sitting in the waiting room as the high-yield summer begins following the Memorial Day holiday, the source reasoned.

"There is only so much room, so it's going to depend upon who is quick, and who can get analysts to focus on their deals," the banker said.

Should events prove this sell-side source correct, the busiest month of the year would come on the heels of two record-setting months in the new issue market, sources say.

March saw more than $36.6 billion proceeds, according to Prospect News data, while the month just ended saw nearly $34.7 billion.

Both months set new all-time monthly records for high-yield issuance, market sources say.

At Monday's close, year-to-date issuance stood at over $103.3 billion proceeds.

Unless something happens to seriously derail the primary market, 2010 is almost certainly headed for the record book, a sell-sider said late Monday.

Beazer plans $300 million

Looking ahead to the Tuesday session, Beazer Homes USA, Inc. plans to price a $300 million offering of eight-year senior unsecured notes.

Credit Suisse and Citigroup are joint bookrunners for the public offering.

The Atlanta-based homebuilder will use the proceeds to repurchase its 8 3/8% senior notes due 2012 and its 4 5/8% senior convertible notes due 2024; the convertibles are putable in 2011.

Lantheus sets talk

Meanwhile, Lantheus Medical Imaging, Inc. talked its $225 million offering of seven-year senior notes (B2//) to yield 9½% to 9¾%.

That deal, which is being led by Jefferies & Co., is also set to price on Tuesday.

Kratos roadshow starts Tuesday

Elsewhere, Kratos Defense & Security Solutions, Inc. will begin a roadshow on Tuesday for a $200 million offering of seven-year senior secured notes (expected ratings B2/B+).

Again, Jefferies & Co. has the books.

The co-managers, B. Riley & Co., Imperial Capital, KeyBanc Capital Markets and Noble Financial Group, feature two names, Riley and Noble, novel to high-yield underwriting.

Proceeds from the Kratos deal will be used to complete the pending acquisition of Gichner Holdings, Inc. for $133 million, as well as to refinance existing debt and for general corporate purposes.

MCE marketing $600 million

Meanwhile, MCE Finance Ltd. began a global roadshow on Monday for its $600 million offering of eight-year senior notes (B1/B+).

The deal is set to price during the May 10 week.

Deutsche Bank Securities, Bank of America Merrill Lynch, RBS Investment Bank, ANZ Investment Bank, Barclays Capital, Citigroup, Commerz, Credit Agricole, NAB Securities and UBS Investment Bank are joint bookrunners.

Proceeds will be used to reduce debt under the company's City of Dreams project facility.

The issuing entity is a financing unit of Melco Crown Entertainment Ltd., a Hong Kong-based developer, owner and - through a Macau subsidiary that holds a gaming sub-concession - an operator of casino gaming and entertainment casino resort facilities focused on the Macau market.

Recent deals hang in

Among recently priced issues, a trader said that Amkor Technology Inc.'s new 7 3/8% notes due 2018 "are still hanging in there," trading perhaps ¼ to ½ point firmer than the par issue price at which the Chandler, Ariz.-based provider of services to semiconductor manufacturers brought its $345 million issue - upsized from the originally announced $300 million - to market on Thursday.

A trader saw Susser Holdings LLC/ Susser Finance Corp.'s 8½% notes due 2016 trading around 100¼ to 100½ -- well up from the 98.845 level at which the Corpus Christie, Tex.-based convenience store operator and fuel distributor priced its $425 million issue on Friday to yield 8¾%.

"So everything's hanging in there," he said of the new deals. "There's very light volume, but there are a lot of people quoting stuff today.

At another desk, a trader saw Susser's new deal get as good as 101½ bid, 102½ offered.

That's the same level at which he also saw the new Aspect Software Inc. $300 million issue of 10 5/8% senior secured second-priority notes due 2017. The Chelmsford, Mass.-based business software company's deal had priced at par on Friday.

Market indicators firm slightly

Among bonds not connected with the new deal market, a trader saw the CDX Series 14 index gain 3/8 point on Monday to end at 100 3/8 bid, 100 5/8 offered, after having lost ½ point on Friday.

The KDP High Yield Daily Index was meantime up by 1 basis point on Monday to 73.11, after having lost 5 bp on Friday. Its yield narrowed by 2 bps, to 7.79%, after having widened by 2 bps on Friday.

Advancing issues stayed ahead of decliners for a third consecutive session on Monday - but by only the slimmest of margins out of the more than 1,400 junk names which traded on Monday.

Overall market activity, represented by dollar-volume levels, fell by 27% on Monday from the levels seen the previous session.

A trader characterized Monday's session as "a pretty quiet day," suggesting that with New York temperatures in the mid-80s, "it felt like a slow summer Monday" - even though the onset of summer is still six weeks away. "People were slow to get into it."

He said the market "opened firmly."

The trader said that he thought that "we were going to have a lot more of a shake up with this Greece news, but then [Warren] Buffett was backing Goldman [Sachs], and whatnot, and things are going well" in Junkbondland.

Synovus, Sorenson on the slide

A trader said that Sorenson Communications and Synovus Financial "were the big movers today."

He said that Sorenson's 10½% senior secured notes due 2015 "got hit hard," falling to levels around 66 offered, with no bids, after having traded last week around 97.

He cited news reports indicating that the National Exchange Carriers Association - a telecommunications industry group which by law administers an interstate fund that compensates providers of Telecommunications Relay Services that allow speech- or hearing- impaired people to use regular phone service, using special equipment, such as Salt Lake City-based Sorenson -- would recommend a new payment schedule that would lower those payments by as much as 40%, should that recommended schedule be adopted by the Federal Communications Commission.

Calls to the NECA and to Sorenson late Monday afternoon seeking clarification had not been answered by press time.

Another trader, who had seen the Sorenson bonds offered at 97½ without a bid on Friday, heard the bonds having plunged to a 60-64 context by Monday afternoon.

As for Synovus, the first trader saw the Columbus, Ga.-based banking company's 5 1/8% notes due 2017 as having dropped to an 86-87 context, this after having traded around 92 on Friday. There was "a decent amount" of activity in the bonds. The trader said they moved after Synovus announced that it would not go through with its previously announced exchange offer to give the noteholders stock for their bonds, citing the company's fear of "an ownership change."

Ford seen firmer

Elsewhere, a trader said that Ford Motor Co.'s paper was busily changing hands on Monday, even as the Dearborn, Mich.-based Number-Two domestic carmaker reported a 25.6% gain in its April sales of cars and light trucks versus year-ago levels. While its car sales were up 10.3%, to 57,549 units, its light truck sales accelerated by 36.1% year over year to 104,888 vehicles. Ford said that its F-Series pickup truck sales rose 42% and its Escape SUV sales rose 41%.

The trader said "the short paper is holding in there, on some decent size." He said that "the short end of the curve is really not going to be moving." As for the somewhat longer issues, such as Ford's 8% notes due 2014 trading in a 105-105½ context, which he saw up a little, again on "decent size trading."

He said that there had been "a lot of offerings, and the short paper held in really well."

A trader at another desk meantime saw Ford's 7.45% bonds due 2031 up ½ point on the day at 93 bid, 94 offered. He also saw Ford domestic arch-rival General Motors Corp., which posted a 6.4% year-over-year sales gain in April likewise up ½ point, its benchmark 8 3/8% bonds due 2033 at 38¼ bid, 39¼ offered.

Oil issues seen mixed

A trader said that he "didn't see any oil and [oilfield] services trade that much in high-yield world," in contrast to Friday, when the exploration and production companies and the drillers' bonds were clearly in retreat in the wake of worsening reports of environmental and financial damage from the April 20 oil-rig disaster in the Gulf of Mexico.

However, another trader said that ATP Oil & Gas Corp.'s 11 7/8% senior secured second-lien notes due 2015 "got hit again," after having declined on Friday on the Gulf of Mexico rig disaster news. He saw the bonds fall to as low as 96 bid, although they did improve later on to 97¼ bid, 98¼ offered - up from the lows but still down from Friday's levels around 99 bid.

Coal sector climbs

A trader said that Massey Energy Co.'s bonds were on the rebound, after having eased on Friday on news reports of an FBI probe of the Richmond, Va.-based coal company, following last month's big accident at a West Virginia coal mine owned by a Massey subsidiary, in which 29 miners died.

He saw Massey's 6 7/8% notes due 2013 - which on Friday had lost more than 2 points to finish around 97 bid - come back on Monday to about 973/4.

A market source at another desk quoted the Massey bonds up perhaps ¼ point to around 97½ bid.

Sector peer Peabody Energy Corp.'s 6 7/8% notes due 2013 were up ½ point on the day, at 101½ bid.

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