U.S. Concrete upsizes to $200 million as primary shrugs off outflow; calendar builds

By Paul A. Harris

New York, March 26 - "Not to worry," were the watchwords during the last session of the March 22 week.

"Equities are not good and the funds flow information is not exactly favorable but deals are still getting done," one sell-side source commented Friday.

Indeed, three deals were completed during the session, with U.S. Concrete, Inc. upsizing its issue by $50 million and pricing at the tight end of talk.

And the new issue pipeline continued to build, most notably in Europe where news surfaced that Italian phone directories firm SEAT Pagine Gialle SpA will shortly begin roadshowing €1.15 billion.

"Getting done and pretty tight"

Despite Thursday's news from AMG Data Services that high yield mutual funds had undergone an outflow of slightly over $208 million for the week ending March 24 - the third negative flow in five weeks - one investment banker told Prospect News that it's still far too early to swing out the lifeboats.

"If you look at the 'straight-down-the-fairway' deals, they're getting done and they're getting done pretty tight," said the official.

"An example," the source added, "is U.S. Concrete."

The Houston concrete company priced an upsized issue of $200 million of 10-year senior subordinated notes (B3/B-) at par on Friday to yield 8 3/8%, bringing the Citigroup and Banc of America Securities-led deal in at the tight end of the 8½% area price talk. It was increased from $150 million.

Shortly after the Houston concrete firm's notes were dry enough to walk on, a secondary market source spotted them at 102 bid, 102.75 offered.

The investment banker went on to explain that U.S. Concrete exemplifies the type of credit for which the new issue market remains attractively open.

"Deals like Boyd Gaming, Service Corp., Cinemark and Sealy will continue to get done," the banker added. "They are known credits in the high-yield market.

"On the other hand, deals with stories around them will struggle."

A pair of deals out of Jefferies

Terms emerged during the session on two deals that were led by Jefferies & Co.

Leucadia National Corp. priced a split-rated $100 million add-on to its 7% senior notes due Aug. 15, 2013 (Ba1/BBB-) at 102.191 to yield 6.68%.

The original $200 million priced at 99.612 on May 30, 2003 to yield 7.052%, so the New York City financial services holding company walked away from Friday's deal with a lower yield.

Also out of Jefferies, EPL Intermediate, Inc., the holding company for El Pollo Loco, Inc., sold $70 million of six-year zero-coupon senior discount notes at 55.784 to yield 12½%, according to an informed source.

The Irvine, Calif. quick service chicken restaurant company's discount notes came wide of the 12% area price cackle.

SEAT Pagine shows up with €1.15 billion

Four junk bond roadshow starts were heard Friday.

The roadshow starts Tuesday in London for SEAT Pagine Gialle SpA's €1.15 billion of 10-year senior notes. A U.S. roadshow is scheduled to follow during the early part of the week of April 5 and the deal is expected to price mid-to-late in the week of April 5.

Credit Suisse First Boston, Barclays Capital, BNP Paribas and Royal Bank of Scotland are joint bookrunners on the acquisition financing deal from the Turin, Italy phone directories company.

Elsewhere Boyd Gaming Corp. will present an offering of $300 million of 10-year senior subordinated notes (B1/B+) at a Monday and Tuesday roadshow, with pricing to follow on Wednesday.

Deutsche Bank Securities, Bank of America Securities and CIBC World Markets will be joint bookrunners on the Las Vegas-based gaming firm's debt refinancing deal.

Houston funeral and cemetery firm Service Corp. International will also lay to rest some of its debt with the proceeds from an offering of $250 million of 12-year senior notes (expected B1/confirmed BB-). The roadshow is set for Monday and Tuesday.

Merrill Lynch & Co. will run the books.

Memberworks Inc., a Stamford, Conn. company that provides service and discount programs for consumers, will conduct a roadshow during the week of March 29 for its offering of $150 million of 10-year senior notes.

The Lehman Brothers and UBS Investment Bank-led acquisition financing deal is expected to price during the week of April 5.

Cinemark acquisition deal talk

Price talk of 9¾%-10% emerged Friday on Cinemark, Inc.'s planned $360 million of 10-year senior discount notes (Caa1/B-), which are expected to price Monday via Lehman Brothers and Goldman Sachs & Co.

Finally, Prospect News learned Friday that Gundle/SLT Environmental Inc. plans to offer $150 million of high-yield bonds in a sale expected to be completed in April.

UBS Investment Bank will run the books for the acquisition deal from the Houston company which manufactures geosynthetic lining products.

Foamex bonds lower

In trading, Foamex International Inc.'s bonds were quoted lower on Friday, although there was no fresh news out on the Linwood, Pa.-based maker of foam padding for the automotive and bedding industries. Its 10¾% notes due 2009 and 13½% notes due 2005 were both seen having moved down to 87 bid from prior levels at 91, while its defaulted 9 7/8% subordinated notes due 2007 were pegged at 60 bid, down from recent levels in the mid 60s.

At another desk, a trader saw the 10¾% and 13½% notes offered at 89, with the 9 7/8s offered in the lower 60s.

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