Dana bonds speed higher; Plains Exploration plans deal, Algoma sets talk

By Paul Deckelman and Paul A. Harris

New York, June 11 - Dana Corp. bonds were seen cruising in the fast lane Monday as the bankrupt Toledo, Ohio-based automotive components maker took more steps to clear the way for its eventual emergence from Chapter 11.

Elsewhere, Dana's Toledo neighbor, Owens Illinois Inc., announced a major asset sale - but the news didn't have much impact on the packaging company's bonds.

Mid-Monday afternoon a buy-side source told Prospect News that the market was unchanged on the day, and added that it had been very quiet.

Meanwhile, although no new issues were priced in the primary market, news circulated on deals in the market, and the forward calendar saw a modest build-up.

Plains unwraps $600 million for Tuesday

Houston-based Plains Exploration & Production Co. plans to price a $600 million two-part offering of senior notes on Tuesday afternoon.

The quick-to-market offer, which is being led by JP Morgan and Lehman Brothers, is comprised of eight-year notes and 12-year notes.

The oil and gas exploration and production company will use the proceeds for general corporate purposes.

Algoma sets talk

Elsewhere on Monday Algoma Steel Inc. set price talk for its $450 million offering of eight-year senior unsecured notes (Caa1/B-) at 9¾% to 10%.

The UBS Investment Bank deal is expected to price on Tuesday.

A buy-side source said that the deal is expected to do very well, but added that with recent volatility in the capital markets the coupon might have increased by as much as a quarter of a point to half a point.

When Prospect News followed by asking if the capital markets volatility - which includes a substantial sell-off in Treasuries - could re-shape what has been expected to be a big summer in the new issue market, the buy-side source suggested that we had "been talking to too many hedge funds."

The buy-sider went on to say that "buy-and-hold accounts have not been shaken up by a little bit of volatility, and added that "there is still plenty of cash to be put to work in this asset class."

Clondalkin talks €400 million

Also on Monday Amsterdam packaging and printing company, Clondalkin Acquisition BV, set price talk for its €400 million equivalent two-part offering of six-year senior secured floating-rate notes (Ba3/B+).

The notes, which are to be issued in dollar- and euro-denominated tranches, are talked at 200 to 225 basis points spreads to Libor and Euribor, respectively.

Pricing is set for Tuesday.

Deutsche Bank Securities and Lehman Brothers are joint bookrunners.

Shingle Springs launches $450 million

A tribal gaming company stepped forward with a Rule 144A for life project financing deal which will run a full roadshow.

Shingle Springs Tribal Gaming will begin marketing on Wednesday for its $450 million offering of eight-year senior notes

Morgan Stanley is the bookrunner.

Proceeds will be used to fund construction of the Foothill Oaks Casino and refinance debt.

The Shingle Springs tribe of Miwok Indians is located in Shingle Springs, Calif.

Dana strong

Among the established issues, a trader said that Dana "looked like it was up pretty good," adding that the issues "keep on rockin' and rollin'."

He saw Dana's 6½% notes due 2008 having opened the session at 101.5 bid, 102.5 offered - but going home at 105 bid, 106 offered.

Another market source saw those 61/2s up 3 points on the day at 104.5, while its 6½% notes due 2009 were up 2¾ points at 102.5.

Dana's longer bonds, like its 5.85% notes due 2015, were 2 points better at 96.25 bid. Its 9% notes due 2011 were at par, up 4½ points on the day. The 7% notes due 2028 and 2029, respectively, were at 100.5 bid and par bid, up 5 points and 3 points.

A source said that Dana's 5.85s were among the most busily traded bonds during the session, up a point at 96 bid.

Dana filed for Chapter 11 in March 2006, hurt by the same woes of the domestic automotive industry that also caused such competitors as Dura Automotive Systems Inc. and Delphi Corp. to seek protection from their junk bond holders and other creditors.

Last week, Dana's bonds had firmed solidly on the news that the bankruptcy court had approved the sale of the two businesses that compose Dana's Fluid Products operations.

Dana said that the court had okayed the transfer of its fluid products hose and tubing division to Bursa, Turkey-based Orhan Holding AS for $85 million, and had also given the greenlight to the sale of its coupled products business to Coupled Products Acquisition LLC, a subsidiary of Wanxiang Holdings Corp. - one of China's largest automotive parts manufacturers for - for an unspecified nominal price.

Delphi up, Dura down

Elsewhere among the restructuring auto suppliers, a market source saw Delphi's bonds firmer as media reports circulated that the bankrupt Troy, Mich.-based parts supplier was getting closer to its goal of reaching an agreement with former corporate parent General Motors Corp. and the United Auto Workers union on reining in the high labor costs that helped push it into bankruptcy.

Delphi's 7 1/8% notes due 2029 were a point better at 117.25, while its 6.55% notes due 2006 were up ¼ point, also at 117.25. Its 6½% notes due 2013 were 1½ points better at 114 bid.

But while Delphi and Dana were up, the bonds of Dura were down for a second straight session, dropping back after the incredible run up which the Rochester Hills, Mich.-based supplier's senior paper had last week, when they rose about 15 points, buoyed by market rumors Dura was making progress in lining up backers for a rights offering, as well as by the court-ordered extension of its exclusivity periods.

Dura, which had retreated 2 or 3 points on profit-taking on Friday, "fell again today," a trader said, quoting the company's 8 5/8% senior notes due 2012 at 62 bid, 64 offered, down another 2 points, while its 9% notes due 2009 were seen down a point at 14 bid, 15 offered.

Owens Illinois little moved by asset sale

Apart from the autos, a high-yield issuer with major news Monday was Owens Illinois, which is selling its plastic packaging unit to Rexam for more than $1.8 billion.

But the asset sale had little observed impact on the company's bonds; one trader said "not today - but perhaps tomorrow."

Owens Illinois' 7½% notes due 2010 held steady at 102.75 bid, and its 7.35% notes due 2008 actually eased a little, in very light trading, to around the par level.

At another desk, the company's Owens Brockway Glass Container 6¾% notes due 2014 were ¼ point better, also around the par level.

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