Energy XXI, Suburban Propane, Genesis Energy price; new Suburban busy; Friday's Kratos gains

By Paul Deckelman and Paul A. Harris

New York, May 12 - The high-yield primary sphere began the new week Monday on the same kind of busy note on which it had closed out last week, which ultimately saw more than $10 billion of new dollar-denominated, fully junk-rated paper come to market, according to data compiled by Prospect News.

There was a steady drumbeat of activity as more than a half-dozen new deals were formally announced or otherwise popped up on participants' radar screens, and three of them - all energy-related 10-year issues - priced during the session in quickly shopped drive-by transactions.

Energy XXI (Bermuda) Inc., an oil and natural gas exploration and production company based in that island nation, brought an upsized $650 million of notes to market via its operating subsidiary, the biggest deal of the day.

Suburban Propane Partners, LP, a retail marketer and distributor of propane, fuel oil and refined fuels, and a financing subsidiary priced $525 million of paper.

And diversified midstream energy master limited partnership Genesis Energy, LP and a financing subsidiary got a $350 million deal done.

Suburban Propane and Energy XXI were both seen by traders to have firmed smartly in the aftermarket, while Genesis was quoted modestly higher. The new Suburban bonds were the most actively traded Junkbondland credit of the day.

Besides those deals that actually priced, market participants said that coal producer Alpha Natural Resources, Inc., rock salt provider Kissner Milling Co. Ltd., health club chain 24 Hour Fitness Worldwide Inc. and car dealership and collision services center chain operator Group 1 Automotive Inc. were shopping bond offerings around to potential buyers likely pricing later on in the week.

Among the transactions that came to market last week, Kratos Defense and Security Solutions Inc. was seen on Monday tacking on at least 1 full point to the hefty gains the new issue had notched in its initial secondary dealings.

Statistical market performance indicators were seen trending higher for a second consecutive session.

Energy XXI upsized and tight

The Monday primary market session saw roughly $1.5 billion raised by three issuers, each of which brought a single-tranche drive-by deal.

Energy XXI Gulf Coast, Inc. priced a massively upsized $650 million issue of senior notes due March 15, 2024 (B3/B) at par to yield 6 7/8%.

The deal was upsized from $300 million.

The yield printed at the tight end of the 6 7/8% to 7% yield talk.

Credit Suisse and Citigroup were the joint physical bookrunners.

The Hamilton, Bermuda-based oil and natural gas exploration and production company plans to use the proceeds to fund the acquisition of EPL Oil & Gas, Inc. and to repay debt.

Suburban Propane 10-years

Suburban Propane Partners and Suburban Energy Finance Corp. priced a $525 million issue of 10-year senior notes (Ba3/BB-) at par to yield.

The yield printed on top of yield talk.

Wells Fargo was the left bookrunner for the debt refinancing. Citigroup, Deutsche Bank, J.P. Morgan and RBS.

Genesis Energy upsizes

Genesis Energy, LP and Genesis Energy Finance Corp. priced an upsized $350 million issue of 10-year senior notes (B1/B) at par to yield 5 5/8%.

The deal was upsized from $300 million.

The yield printed at the wide end of the 5½% to 5 5/8% yield talk.

RBC was the left bookrunner. BMO, Citigroup, Deutsche Bank, BofA Merrill Lynch, Scotia, U.S. Bancorp and Wells Fargo were the joint bookrunners.

The Houston-based diversified midstream energy master limited partnership plans to use the proceeds to repay debt under its revolver and for general partnership purposes.

24 Hour Fitness roadshow

The active calendar saw a modest buildup on Monday.

24 Hour Fitness began a roadshow on Monday for a $500 million offering of eight-year senior notes (expected ratings Caa1/CCC+).

J.P. Morgan, Deutsche Bank and Morgan Stanley are joint bookrunners for the deal to fund the buyout of the San Ramon, Calif.-based fitness-club operator by AEA Investors and Ontario Teachers' Pension Plan from Forstmann Little & Co.

Group 1 Automotive this week

Group 1 Automotive also began a roadshow on Monday for a $300 million offering of eight-year senior notes (expected ratings B1/BB).

J.P. Morgan, Wells Fargo and BofA Merrill Lynch are the joint bookrunners for the debt refinanicng deal.

Kissner brings secured notes

Kissner Milling plans to price a $200 million offering of five-year senior secured notes at the end of the present week.

Jefferies is the left bookrunner. Credit Suisse is the joint bookrunner.

Proceeds will be used to refinance debt and to fund a distribution.

KCA Deutag price talk

KCA Deutag Alph Ltd. talked its $375 million seven-year senior secured notes (B3/B) to yield 7¼% to 7½%.

The deal is set to price on Tuesday.

J.P. Morgan, Goldman Sachs, HSBC and Lloyds are the joint bookrunners.

Motor Oil roadshow

Greece-based Motor Oil (Hellas) Corinth Refineries SA plans to start a roadshow on Tuesday for a €300 million offering of five-year senior notes, which is expected to price before the end of the week.

Global coordinator and joint bookrunner HSBC will bill and deliver for the Regulation S-only offer.

The Athens-based oil refiner plans to use the proceeds to repay debt and for general corporate purposes.

Ovako secured deal

Sweden-based steel producer Ovako AB plans to start a European roadshow on Tuesday for its €285 million offering of five-year senior secured notes.

The roadshow wraps up on Friday, and the debt refinancing deal is set to price thereafter.

Lead bookrunner JPMorgan will bill and deliver. Nordea is also a lead bookrunner.

Suburban Propane is hot

In the secondary market, a trader quipped that Suburban Propane Partners' new 5½% notes due 2024 "were really cooking with gas," after the Whippany, N.J.-based retail marketer and distributor of propane, fuel oil and refined fuels priced its $525 million quick-to-market transaction at par - and the bonds moved up in heavy trading.

He saw the bonds having moved up to 101 1/8 bid, 101 3/8 offered.

A second trader pegged those bonds at 101¼ bid, 101¾ offered.

A market source at yet another desk saw more than $47 million of those notes having traded, easily topping the junk market's Most Actives list.

Energy XXI, Genesis trade

Among the other deals that priced ion Monday, a trader saw Energy XXI's new 6 3/8% notes due 2024 at 101 bid, 102 offered.

A second trader saw the Hamilton, Bermuda-based exploration and production company's quickly shopped deal having moved up to 101½ bid, 101¾ offered, up from their par issue price.

Genesis Energy, LP's drive-by offering of 5 3/8% notes due 2024 was quoted in a 100½ to 101 context.

The Houston-based diversified midstream master limited partnership had priced its offering at par earlier in the day.

Kratos builds on gains

Among the deals that came to market during Friday's $1.75 billion session, Kratos Defense & Security Solutions' 7% first-lien senior secured notes due 2019 were seen continuing to move upward.

A trader saw the bonds going home in a 102 to 1021/2, which he noted was about a point above the 101 neighborhood at which the San Diego-based high-tech defense contractor's $625 million issue had wound up after pricing at 98.966 to yield 7¼%.

A second trader also saw the bonds settling in around that 102 to 102½ level.

The traders also said that Kratos was pretty much it for any kind of dealings in the bonds that had priced on Friday, with the day's other issues largely unseen

Berry still active

Going back a little further, Berry Plastics Group, Inc.'s 5½% second-priority senior secured notes due 2022 "were still hanging in there," a trader said, quoting those bonds trading at bid levels between 99¾ and par.

A second trader saw them up 1/8 point at par, with over $18 million traded, putting them high up on the junk most actives list.

The Evansville, Ind.-based maker of plastic packaging materials had sold $500 million of the bonds in a quick-to-market deal that priced at par via its Berry Plastics Corp. subsidiary back on May 5. The bonds had initially traded a little above the par level, but then slipped back to under that mark.

Indicators stay firm

Statistical junk performance indicators were seen by market sources to be trending higher on Monday, their second straight session on the upside. On Friday, the indicators had been up across the board, after having turned mixed on Thursday.

The Markit Series 22 CDX North American High Yield index was seen by a trader to have pushed upward by 7/32 point on Monday to end at 107 5/32 bid, 107 9/32 offered, its fourth consecutive upturn. On Friday, it had edged up by 1/32 of a point.

The KDP High Yield Daily index posted its second straight gain on Monday, firming 3 basis points to close at 75.02. That followed Friday's 1 bp rise. Its yield meantime narrowed for a fifth straight session, coming 2 bps to end at 5.10%. On Friday, it had declined by 3 bps.

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