First Data prices, moves up; Visteon, Ameristar, Park-Ohio next; American Gaming postponed

By Paul Deckelman and Paul A. Harris

New York, March 30- After hanging around on the forward calendar for the last few weeks, First Data Corp. moved on Wednesday to take advantage of favorable market conditions, pricing a $750 million offer of eight-year secured notes.

Traders saw the financial transaction processor's big new issue push sharply higher on the break, before it came off its peak levels and ended with a more modest gain.

They meantime saw CDW Escrow Corp.'s $725 million issue of eight-year paper, which had priced late in Tuesday's session at par, trading on Wednesday just slightly above that issue price.

Investors meantime began getting ready for what promises to be a very busy Thursday, with pricings expected from Visteon Corp., Ameristar Casinos, Inc., Millar Western Forest Products Ltd., Kennedy-Wilson Inc. and Park-Ohio Industries, Inc. The latter company, like First Data, has been a virtual fixture on the forward calendar for the last few weeks, not pricing even though its short road show wrapped up weeks ago, leading some market participants to conclude that it had been postponed, which it had not; however, word did spread Wednesday that the $250 million deal had been "reactivated."

Meanwhile, Oppenheimer Holdings, Inc. announced plans for a new $200 million deal, expected to price next week, and word emerged of offerings from Sheridan Group, Norwegian Energy Co. ASA and Australia's Mirabela Nickel Ltd.

But while the forward calendar was building, syndicate sources said another deal was lost, with American Gaming Systems Inc. postponing its $150 million issue of five-year senior secured notes.

Traders meantime said that the secondary market was generally firm, but with no overwhelming features.

First Data brings $750 million

A single deal priced during Wednesday's primary market session, as an ultra-familiar high-yield name brought a big issue that generated a massive order book.

First Data sold a $750 million issue of eight-year senior secured first-lien notes (B1/B+/BB-) at par to yield 7 3/8%.

The yield printed at the tight end of the 7½% area price talk.

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. were the physical bookrunners for the quick-to-market debt refinancing deal. Credit Suisse Securities (USA) and HSBC Securities (USA) Inc. were the joint bookrunners.

The deal played to $5 billion of orders, according to a sell-side source who watched from the sidelines.

Talking the deals

Meanwhile the dealers set the stage for a busy Thursday session.

Visteon talked its $500 million offering of eight-year senior notes (B2/B+/) with a yield in the 6¾% area.

Merrill Lynch, Morgan Stanley & Co. Inc. and Citigroup Global Markets Inc. are the joint bookrunners.

Kennedy-Wilson talked its $200 million offering of eight-year senior notes (B1/BB-/) to price at a slight discount with an 8¾% to 9% yield.

Merrill Lynch and Morgan Stanley & Co. Inc. are the joint bookrunners.

Millar Western Forest Products talked its $200 million offering of 10-year senior notes (B3/B-) with an 8¼% to 8½% yield.

Goldman Sachs & Co. is the bookrunner.

Finally, Park-Ohio Industries is reviving a deal that was sidelined by the capital markets volatility which trailed in the wake of the March 11 natural disasters that struck Japan.

Price talk on the $250 million offering of 10-year senior subordinated notes (B3/CCC+/) remains at the 8% area, where it was set on March 14.

That deal is also set to price on Thursday via joint bookrunners Barclays Capital Inc. and J.P. Morgan Securities LLC.

Ameristar for Thursday

Ameristar Casinos, Inc. has scheduled an investor conference call for 11 a.m. ET on Thursday for its $800 million offering of 10-year senior notes.

The quick-to-market deal is set to price later on Thursday.

Wells Fargo Securities LLC is the left lead bookrunner. Deutsche Bank Securities Inc., Merrill Lynch, J.P. Morgan Securities LLC and Credit Agricole CIB are the joint bookrunners.

The Las Vegas-based gaming and entertainment company plans to use the proceeds, in addition to funds from a new $1.4 billion credit facility, to finance a tender offer for its 9¼% senior notes due 2014, as well as to refinance existing bank facilities and repurchase stock from the majority shareholder.

Mirabela starts roadshow

Australia's Mirabela Nickel began marketing its $375 million offering of seven-year senior notes (expected ratings B2/B-) on Wednesday.

The roadshow will play to a mix of high yield and emerging markets accounts; the guarantors of the notes are Mirabela Mineração do Brasil Ltda. and Mirabela Investments Pty Ltd.

Marketing of the deal is set to wrap up on April 6.

J.P. Morgan Securities LLC and Barclays Capital are the joint bookrunners for the Rule 144A and Regulation S for life offer.

The Perth, Australia, nickel producer plans to use the proceeds to pay down its debt facilities, as well as to make prepayments in connection with the termination of certain commodity call options, interest rate hedging and foreign exchange hedging.

Proceeds will also be used to provide general working capital and for general corporate purposes.

Sheridan plans three-year deal

Elsewhere on Wednesday, Sheridan Group began a roadshow for a $150 million offering of three-year senior secured notes.

Jefferies & Co. has the books.

The Hunt Valley, Md.-based print and publishing company plans to use the proceeds to repay existing 10¼% senior secured notes.

Oppenheimer lines up notes

Meanwhile, Oppenheimer Holdings Inc. plans to price $200 million of seven-senior senior secured notes during the week ahead, via Morgan Stanley & Co.

Proceeds will be used to refinance $22.5 million of debt outstanding as of Dec. 31, 2010 under the company's variable-rate secured credit note due July 31, 2013, and $100 million under the variable-rate subordinated note due Jan. 31, 2014.

New issues in dribs and drabs

In contrast to last week's hectic pace, which saw more than $10 billion of new paper price in the domestic dollar-denominated high yield market, the traders were seeing a considerable more relaxed, even sedated pace, this week.

While the new deals seem to be coming in dribs and drabs and none of it looks like it's really breaking out, a trader said that "occasionally, one of them will pop up two points - but [there's] nothing overly exciting to report and nothing being priced at par and trading down a point or two."

New First Datas are firm

A trader said that when the new First Data eight-year secured notes were freed for secondary dealings, the $750 million issue shot up to around 102 bid, 102½ offered, before they came off those peaks to end around a 101¼ bid, 102 offered context.

A second trader also saw those bonds follow that trajectory, climbing above 102 but ending more around in the 101 range.

"It broke as high as at 102-1021/4, then it came in by 1/4. We traded a ton of bonds at 1011/2-102; last I saw it was wrapped around 1011/2. Very active."

However, another trader late in the day pegged those bonds at 101¾ bid, 102¼ offered.

New CDW stays around issue

A trader said that CDW Escrow Corp.'s new 8½% notes due 2019 "wasn't trading up huge," quoting the Vernon Hills, Ill.-based technology products and services provider's issue at par bid, 100¼ offered.

A second trader had the bonds at 100 1/8 bid, 100¼ offered.

The company had priced its new paper late Tuesday at par - after first radically downsizing the deal to $445 million from the originally envisioned $1.065 billion, and then having upsized it from that low to its eventual final size of $725 million.

Ameristar bonds still trading

One of the traders said Ameristar Casino's 9¼% notes due 2014 "are still hovering" right around the 110 price at which the Las Vegas-based casino operator plans to take out that $650 million issue of the bonds via a tender offer announced on Tuesday, which will be funded with the proceeds from its new junk bond deal.

Those bonds had jumped more than a point in heavy trading on Tuesday - over $20 million changed hands that session - as investors positioned themselves for the anticipated tender offer consideration

A market source at a different desk saw the bonds up another 1/8 point on Wednesday, at 110 1/8 bid.

Junk players eye high grade

A trader, lamenting on how "it's a sleepy March," noted that "when you've got junk guys quoting the investment-grade stuff, it means they're looking for something to do."

For instance, a junk trader said that Delta Air Lines Inc's new 5.3% pass-through certificates due 2019 were trading at 100½ bid, 101 offered, up from their par issue price.

Another trader said that Verisk Analytics Inc.'s $450 million of split-rated (Ba1/BBB-/A) were trading slightly tighter than the 237.5 bps spread where they came to market, at 227 bps bid, 222 bps offered.

Indicators turn north

Away from the new-deal world, a trader saw the CDX North American Series 16 HY index up 3/8 point on Wednesday at 102 3/8 bid, 102 5/8 offered, after having risen by 1/8 point on Tuesday.

The KDP High Yield Daily Index meantime was up by 4 bps Wednesday to end at 75.69, after having been down by 1 bp on Tuesday. Its yield came in by 2 bps to 6.71%, after having been unchanged on Tuesday for a second consecutive session.

The Merrill Lynch High Yield Master II index was back on track Wednesday after a relatively rare loss on Tuesday, its first after nine straight advances in the previous sessions. The index gained 0.087% on Wednesday, in contrast to Tuesday's 0.011% retreat. The gain lifted its year-to-date return to 3.848% - a new peak level for 2011 - up from Tuesday's 3.758% and up as well from the previous high-point for the year, Monday's 3.77% reading.

Advancing issues regained their lead over decliners on Wednesday, holding a nearly six-to-five edge. On Tuesday - the decliners' first win after three straight sessions in which the upside movers had led - the winning margin separating the two groups had been less than a dozen issues out of the more than 1,400 tracked.

Overall market activity, as measured by dollar-volume levels, rose by 20% on Wednesday, on top of the 34% gain seen on Tuesday from the prior session's levels.

'All the wrong reasons'

A trader said that "everyone is looking for ideas out there."

At his shop, he said that "while I would like to say that we were busy on one particular issue, it was a couple of million here, a couple of million there.

"There was nothing really crazy."

He characterized the overall market as "still firm" - but he cautioned that it's "up for all the wrong reasons."

He explained that "given everything that's going on in the world," between the continuing situation in Japan, intensified fighting in Libya and turmoil elsewhere in the Middle East and the still-struggling U.S. economy, "it's up for the wrong reasons - it's just money chasing yield."

From a technical perspective, he said that the many-months-long drought of paper for sale - other than new deals - was continuing; "from what I'm hearing from the accounts, everyone is bringing new deals, and everyone needs to be invested," so people are hanging onto the paper they have, making it difficult to get much done in the non-new-deal secondary.

"Until we start seeing gigantic outflows over a couple of weeks, I don't see that changing any time soon."

Energy Future as fear subsides

Among specific names, Dallas-based power producer Energy Future Holdings Corp. ­ more commonly referred to by its former moniker, TXU Corp. ­ was seen moving up as "fears [associated with Japan's 8.9-magnitude earthquake earlier in the month and the havoc it wreaked on the nuclear power industry there] are being replaced by optimism," a trader said.

He pegged the 10¼% notes due 2015 issued by Energy Futures subsidiary Texas Competitive Electric Holdings Corp. at 583/4, a 2 point gain, with $20 million to $25 million trading. The 10 7/8% notes due 2017 improved 1½ points to end around 84, while the 6½% notes due 2024 traded up "a couple points" to 471/4.

"It's becoming topical," he said. "It's too cheap compared to everything else."

At another desk, the 6½% notes were pegged at 46½ bid, 47½ offered, up 1½ points. The 11¼% notes due 2017 moved up a point or 2 to 83¼ bid, 84¼ offered.

Credit default swaps to protect against a TXU default have been declining recently, signaling that the market believes that the claim of a breach of covenants by Aurelius Capital Management LP is without merit.

Caesars heading higher

A trader said Caesars Entertainment's 10% notes due 2018 were "a little better, but kind of where they have been."

He saw the notes of the Las Vegas-based casino operator formerly known as Harrah's closing at 91½ bid, 92 offered, which he called "up a solid point and change."

Another market source called the paper up a point at 91½ bid.

Rite Aid results Thursday

Trading in Rite Aid Corp. was "quiet" during the midweek session, according to a trader.

However, he said that with the release of the company's same-store sales numbers on Thursday, he expected trading to be much busier in the next session.

Autos are improved

A trader said that Motors Liquidation Co.'s 8 3/8% benchmark bonds due 2033 - formerly known as General Motors Corp. - were up 5/8 point on the day at 29 5/8 bid, 30 1/8 offered.

He also saw GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 up 1 1/8 point at 108 1/8 bid, 108 5/8 offered.

Stephanie N. Rotondo contributed to this report

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.