Cinemark, Puget drive-bys price in quiet post-holiday market; Arch, Vulcan slate mega-deals

By Paul Deckelman and Paul A. Harris

New York, May 31 - It was back to work on Tuesday in Junkbondland following the long Memorial Day weekend - but traders reported a slow and sleepy market, with participants seemingly still in a holiday mode.

They also noted that it was the last day of May, meaning some participants who presumably had straightened up their books to end the month looking good were standing pat and had little incentive to do anything before the start of the new month on Wednesday.

Movie theater operator Cinemark USA Inc. priced a quickly shopped $200 million offering of 10-year senior subordinated notes, which were seen having moved up when they hit the aftermarket.

Also pricing a quick-to-market deal was electric utility owner Puget Energy Inc., which upsized its offering of senior secured notes to $500 million.

And there was also a small Canadian-dollar-denominated add-on from Garda World Security Corp. Neither of the latter two deals were seen trading around.

The forward calendar swelled with the addition of two giant-sized offerings. Arch Coal, Inc. announced a $2 billion two-part note offering as part of the financing for its previously announced acquisition of International Coal Group Inc., and Vulcan Materials Co., which makes construction aggregates like asphalt mix and cement, unveiled plans for a $1 billion five-year deal.

Health-care facilities operator Symbion Inc. was also heard to be in the market with a $350 million five-year offering.

Endo Pharmaceuticals Holdings Inc. was hitting the road to market its $700 million note offering, now revealed to be a two-part issue of eight- and 12-year bonds.

Secondary trading was generally subdued, although last week's new issues such as General Motors Financial Co. Inc. and OGX Petroleum & Gas were doing well.

There were also more dealings in McClatchy Co. paper. Friday saw brisk activity in the newspaper publisher's bonds on news of an asset sale and debt paydown plans.

Puget Energy upsizes

The primary market was notably active on Tuesday following the three-day holiday weekend.

Two issuers brought single-tranche drive-by deals. They raised a combined $700 million.

Puget Energy priced an upsized $500 million issue of 10.25-year senior secured notes (Ba1/BB+) at a 294.8 basis points spread to Treasuries.

The spread came toward the tight end of price talk that had been set in the Treasuries plus 300 bps area.

The notes priced at par to yield 6%.

Barclays Capital Inc., RBS Securities Inc. and Wells Fargo Securities LLC were the joint bookrunners for the quick-to-market issue, which was upsized from $350 million.

The Bellevue, Wash.-based provider of electric and natural gas service plans to use the proceeds to repay the outstanding term loans under its revolving credit facility and to pay related fees and expenses, which include unwinding hedges.

Cinemark drives by

Meanwhile Cinemark USA priced a $200 million issue of 10-year senior subordinated notes (B3/B) at par to yield 7 3/8%.

The yield printed at the tight end of price talk that had been set in the 7½% area.

Barclays, Morgan Stanley & Co. Inc. and Deutsche Bank Securities Inc. were the joint bookrunners for the quick-to-market debt refinancing and general corporate purposes deal.

Tuesday's two deals upped May's issuance total to $50.6 billion in 101 dollar-denominated tranches, making it the biggest May in the history of the market and more than doubling - both in dollar amount and deal volume - the next biggest May, which was May 2009's $24.2 billion in 46 tranches.

Arch Coal brings $2 billion

Apart from Tuesday's quick-to-market action, the forward calendar saw a substantial buildup.

Arch Coal plans to price $2 billion of senior notes, with eight-year and 10-year maturities, during the middle part of the June 6 week.

Morgan Stanley, PNC Capital Markets LLC, Bank of America Merrill Lynch, RBS Securities Inc. and Citigroup Global Markets Inc. are the joint bookrunners.

The St. Louis-based coal producer plans to use the proceeds to partially fund the acquisition of International Coal Group and related transactions, including the redemption, payment of cash resulting from conversion of or other retirement of certain outstanding International Coal Group debt.

Vulcan takes to road Wednesday

Vulcan Materials plans to begin a roadshow on Wednesday in New York for a $1 billion two-part offering of senior notes due in December 2016 and in June 2021 (expected ratings Ba1/BB).

An investor call is also set for Wednesday.

The roadshow moves to Boston on Thursday.

Bank of America Merrill Lynch, Goldman Sachs & Co. and SunTrust Robinson Humphrey are the joint bookrunners for the debt refinancing and general corporate purposes deal.

Symbion sets Wednesday call

Symbion plans to host an investor call at 9:30 a.m. ET on Wednesday for its $350 million offering of five-year senior secured notes.

The deal is expected to price during the June 6 week.

Morgan Stanley, Barclays and Jefferies & Co. Inc. are the joint bookrunners for the debt refinancing deal.

Forestar unveils secured deal

Austin, Texas-based Forestar Real Estate Group Inc. will begin a roadshow on Wednesday in New York City and New Jersey for its $150 million offering of eight-year senior secured notes (expected ratings B1/B+).

Goldman Sachs is the bookrunner.

Proceeds will be used to refinance term loan debt and provide cash on the balance sheet.

Endo reveals deal structure

Finally, Endo Pharmaceuticals Holdings disclosed plans to offer its previously announced $700 million of senior notes (Ba3/BB-/) in eight-year and 12-year tranches.

A roadshow began on Tuesday. A global investor call is set for Wednesday. The deal is expected to price on Friday.

Bank of America Merrill Lynch, Morgan Stanley, Citigroup and Deutsche Bank are the joint bookrunners.

Proceeds, along with cash on hand and proceeds from a new $2.9 billion credit facility, will be used to finance the acquisition of American Medical Systems and refinance AMS debt and Endo's existing credit facility.

New Cinemark bonds better

When Cinemark's new 10-year notes were freed for aftermarket activity, a trader saw that $200 million drive-by issue trading in a 101-102 context versus the par issue price earlier in the session.

A second trader saw the bonds at 101¼ bid, 101¾ offered, while at another desk, the bonds were being quoted at 101 5/8 bid, 102 offered.

Puget, Garda deals unseen

High yield traders did not see any aftermarket dealings in Puget Energy's upsized $500 million offering of 10.25-year first-lien notes, which came to market fairly late in the session.

Price talk on the utility operator's deal had been given on a spread-versus Treasuries basis, despite the nominally junk Ba1/BB+ ratings.

Another secondary no-show was Montreal-based Garda World Security's C$50 million add-on to its 9¾% notes due 2017.

OGX Pete pops up

A trader said the new OGX Petroleum deal was the "volume leader" on Trace, with over $55 million having traded; he saw the 8½% senior notes due 2018 at 102½ bid, which he called up 2½ points from issue.

The Brazilian energy company's $2.56 billion deal priced at par on Thursday and had been seen in initial aftermarket trading on Friday having gotten as good as 101 7/8 bid, 102 1/8 offered, a trader said.

In Tuesday's dealings, another market source said that the new issue "moved up a little" to end around 102-1021/2. "It quieted down a little bit," he said, "but it definitely moved up a little bit" on the day, estimating the gain at half a point.

He was not surprised to hear that there had been brisk trading above $50 million in the credit, noting that it was a better-than $2 billion deal.

"So it's still moving around a little bit."

GM upside ride continues

A trader said that General Motors Financial's $500 million of 6¾% notes due 2018 continued to gain in Tuesday's dealings on top of the progress made in the secondary market since the Detroit giant's deal priced at par on Thursday afternoon.

He saw the issue up a quarter point on the session at 101¼ bid, 102½ offered.

That was up from the initial secondary levels around 101 bid, 101½ offered on Thursday and again on Friday.

Also in the automotive realm, the trader saw "a bunch" of Chrysler Group LLC/CG Co-Issuer Inc.'s recently issued bonds trading during the morning around 99 7/8 bid.

"Basically, Chrysler was hugging par most of the day," he declared.

The No. 3 domestic carmaker priced a $3.2 billion offering of eight-year and 10-year bonds on May 19. That deal - originally expected to be $2.5 billion - was first upsized to $3.5 billion and then was cut back down to $3.2 billion

The company priced $1.5 billion of 8% senior secured notes due 2019 and $1.7 billion of 8¼% senior secured notes due 2021, both at par; the new bonds were heard to have dipped below the par level in initial aftermarket dealings and to have pretty much stayed there since then.

A quiet junk market

One of the traders opined that other than the Cinemark deal pricing and then trading around, "it really should have been a four-day weekend. It seems like a lot of folks either took Friday off or Tuesday off to stretch out the weekend. The smart folks took both Friday and Tuesday off."

"It was a quiet day," another trader said, "end of the month."

He characterized the market as "firm" but added that "a lot of people were just doing pricing and end-of-the-month stuff, so it was generally pretty quiet."

He said that people were "cleaning up" their books and would "start again [Wednesday]."

Market signs edge up

Away from the new issues, statistical measures of market performance - which had eased on Friday - were seen to have recovered a little on Tuesday.

A trader saw the CDX North American Series 16 High Yield index up by 1/8 of a point on Tuesday to end at 102 1/8 bid, 102 3/8 offered after having declined by 1/16 of a point during Friday's abbreviated pre-holiday session.

The KDP High Yield Daily index rose by 4 bps on Tuesday to close at 75.95 after having been down by 2 bps on Friday. Its yield was unchanged on Tuesday at 6½% after having risen by 2 bps on Friday.

McClatchy movement continues

A trader said that McClatchy's bonds "held their gains" notched Friday on the news that the Sacramento-based newspaper publisher agreed to sell the building where its Miami Herald is printed for $236 million and use $65 million of the proceeds for debt paydown.

A second trader saw McClatchy's 6 7/8% notes due 2029 down a quarter point at 62¾ bid on "some OK volume."

He saw the company's 11½% notes due 2017 - which on Friday had firmed by 1½ points on volume of more than $30 million, since a portion of those bonds will be taken out using the deal proceeds - trading at 109 5/8 bid, perhaps one-eighth of a point easier than they had finished on Friday.

However, at another desk, a trader pegged those bonds at 109¾ bid, 110¼ offered, about unchanged, while seeing the company's 5¾% notes, also due 2017, at 83¼ bid, 84¼ offered.

Another market source said that the 2029 bonds were going home at 64½ bid, up 1½ points on the day.

Sprint seen softer

A market source said that Sprint Nextel Corp.'s 6% notes due 2016 were down nearly 2 points on the session, closing at 101 13/16 bid

There was no fresh news out on the Overland Park, Kan.-based No. 3 U.S. wireless carrier that might explain the drop.

However, the company - miffed because smaller sector peer T-Mobile agreed to be acquired by wireless giant AT&T Corp. rather than team up with Sprint - on Tuesday formally petitioned the Federal Communications Commission. It asked that the regulators block the proposed $39 billion takeover, saying that allowing the deal to go through would harm the wireless industry and customers.

Sprint claimed that letting the deal go though would give AT&T and its chief rival, Verizon Wireless, control of about 80% of the revenue from the industry. Noting that Verizon is the successor company to NYNEX and to Bell Atlantic - two of the seven "Baby Bell" companies formed after the 1984 breakup of AT&T's near-monopoly control of the U.S. telephone industry - it said that letting AT&T take control of T-Mobile would reverse the thrust of nearly 30 years of deregulatory efforts and "leads the rest of us back down the dirt road to Ma Bell."

Nebraska notes knock around

Elsewhere, a trader said Nebraska Book Co. Inc.'s 8 5/8% senior subordinated notes due 2012 were "all over the place."

He saw the Lincoln, Neb.-based textbook distributor's bonds going home at 83 bid, 84 offered, down from its peak level for the session of 88 bid - but well up from Friday's levels around 77-78.

He said he saw "no no no no news" out on the company that might explain the bonds' gyrations.

Paper names mostly steady

A trader saw NewPage Corp.'s 11 3/8% first-lien senior secured notes due 2014 trading around 96½ bid, 98¼ offered, versus Friday's levels around 96½ bid, 97 offered.

He saw its 10% second-lien notes due 2012 at 42 bid, 44 offered, about unchanged from Friday.

He also saw the Miamisburg, Ohio-based coated-paper manufacturer's 12% notes due 2013 languishing in a wide 12-to-16 context.

He said sector peer Catalyst Paper Corp.'s 7 3/8% notes due 2014 were at 52 bid, 54 offered, up perhaps a point from Friday's levels, although he saw no fresh news out on the Richmond, B.C.-based papermaker.

Its 11% senior secured notes due 2016 were unchanged to perhaps off half a point at 88 bid, 90 offered.

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