Albea, W&T, Boise Cascade price deals as primary slows; Springleaf jumps, United Rental up

By Paul Deckelman and Paul A. Harris

New York, Oct. 17- High-yield primary sphere activity slowed markedly on Wednesday from Tuesday's red-hot pace, as just three deals totaling just under $1 billion came to market during the session.

That was well down from the eight tranches totaling nearly $6 billion which had been seen on Tuesday, one of the heaviest new-issue totals of the year so far.

W&T Offshore Inc., an oil and gas company, priced an upsized $350 million add-on to its existing 2019 notes, which firmed slightly in the aftermarket.

French plastic packaging maker Albea Beauty Holdings SA came to market with a $385 million offering of seven-year secured notes, part of a larger two-par deal that also included a euro-denominated tranche. The dollar bonds were seen to have moved up after they were freed to trade.

Lumber and wood products producer Boise Cascade LLC topped off the day's pricing performance with a $250 million eight-year offering, which appeared too late in the day for any secondary dealings.

Among the slew of deals which priced on Tuesday, traders saw HCA Inc.'s new unsecured bond tranche having firmed smartly, along with CNH Global NV, Radio Systems Corp. and IMS Health Inc. However, they saw offshore energy driller Vantage Drilling Co.'s deal trading water.

Away from the new-deal arena, the market remained firm, with statistical market performance measures moving higher across the board

Among specific names, Springleaf Finance Corp.'s bonds were up solidly in heavy trading on news the lending company will shore up its balance sheet via a big sale of residential mortgage-backed securities.

United Rentals Inc.'s bonds firmed as the equipment rental company announced improved quarterly results and continued deleveraging efforts.

Albea multi-currency deal

News volume remained strong in the primary market on Wednesday, which saw three issuers, each one bringing a single dollar-denominated tranche, raise $953 million, plus new euro notes accompanying one of the dollar offerings.

In a dual-tranche deal which included both dollar- and euro-denominated notes, France's Albea Beauty Holdings priced $647 million equivalent of seven-year senior secured notes (B2/B+).

A $385 million tranche priced at par to yield 8 3/8%, at the tight end of price talk set in the 8½% area.

Also a €200 million tranche priced at par to yield 8¾%, at the tight end of the 8¾% to 9% price talk.

Joint physical bookrunner Bank of America Merrill Lynch will bill and deliver for the dollar notes. JPMorgan, also a joint physical bookrunner, will bill and deliver for the euro-denominated notes. Barclays was the joint bookrunner.

Upon the release from escrow, the proceeds will be used to fund the acquisition of Rexam PC, as well as to refinance debt and for general corporate purposes.

W&T taps 8 ½% notes

W&T Offshore priced an upsized $300 million add-on to its 8½% senior notes due June 15, 2019 (B3/B) at 106.

The reoffer price, which came on top of the price talk, resulted in a 6.863% yield to worst. The size was increased from $250 million.

Morgan Stanley, TD and Wells Fargo were the joint bookrunners for the quick-to-market add-on.

The Houston-based oil and gas company plans to use the proceeds to repay outstanding debt recently incurred under its revolving credit facility and to help fund the acquisition of assets in the Gulf of Mexico from Newfield Exploration Co.

Boise Cascade beats talk

Boise Cascade, LLC and Boise Cascade Finance Corp. priced a $250 million issue of eight-year senior notes (B2/B+) at par to yield 6 3/8%.

The yield printed 12.5 basis points below the tight end of the 6½% to 6¾% yield talk.

Bank of America Merrill Lynch, Goldman Sachs, Barclays and Wells Fargo were the joint bookrunners for the debt refinancing and general corporate purposes deal.

Owens Corning sells split deal

In Wednesday's crossover market, Owens Corning priced $600 million of 4.2% 10-year senior notes (Ba1/BBB-/BBB-) at a 240 basis points spread to Treasuries.

A trader said that the notes were initially talked in the 300 bps area and later in the 250 bps area, and added that the sale was a total blowout.

The deal size was increased slightly from $500 million.

Pricing was at 99.91 to yield 4.21%.

Bank of America Merrill Lynch, Citigroup, J.P. Morgan and Wells Fargo Securities LLC were bookrunners.

Talking the deals

Looking toward what is expected to be a busy Thursday session, Aleris International, Inc. talked its $400 million offering of eight-year senior notes (B2/B) with a yield in the 8% area.

J.P. Morgan, Barclays, Deutsche Bank, Credit Suisse, Goldman Sachs and Bank of America Merrill Lynch are the joint bookrunners.

EPL Oil & Gas, Inc. talked a $250 million tack-on to its 8¼% senior notes due 2018 (current ratings Caa1/B-) to price at 99, implying an 8.483% yield to worst.

Credit Suisse, BMO and Jefferies are the joint bookrunners.

And France's Numericable Finance & Co. SCA set price talk for its €410 million two-part offering of senior secured notes (expected ratings B2/B).

The company talked a €200 million tranche of 6.25-year fixed-rate notes, which are non-callable for 3.25 years, to yield 8¾% to 9%.

A €210 million tranche of six-year floating-rate notes, non-callable for one year, is talked with an 800 basis points spread to three-month Euribor, at an issue price of 99.

J.P. Morgan, BNP, Citigroup, Credit Agricole, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC and Morgan Stanley are the bookrunners for the debt refinancing deal.

BWAY starts roadshow Thursday

Pending deal news continued apace, on Wednesday.

BWAY Parent Co., Inc. plans to start a roadshow on Thursday for a $375 million offering of five-year senior PIK toggle notes (/CCC+/), which are set to price early in the week ahead.

Bank of America Merrill Lynch, Deutsche Bank and Goldman Sachs are the joint bookrunners for the merger deal.

Albea Beauty sitting pretty

When Albea Beauty Holdings SA's new dollar-denominated 8 3/8% senior secured notes due 2019 were freed for secondary dealings, a trader said that the issue "traded very well," seeing them going home in a 102 to 102½ bid context.

That was well up from the par level at which the French maker of plastic packaging for the cosmetics industry had priced that $385 million issue. The bonds were part of $647 million equivalent two part offering that also included a tranche of euro-denominated 2019 secured notes.

W&T firm a bit

The trader also saw W&T Offshore's add-on to its 8½% notes having pushed up a little, to 106½ bid, 107 offered, although he added "I haven't seen a lot [of trading] in that one, though."

The Houston-based oil and gas exploration and production company's quick-to-market deal had earlier priced at 106.

The day's other offering - $250 million of 6 3/8% notes due 2020 from Idaho-based lumber and wood products company Boise Cascade LLC - appeared too late in the session for aftermarket action.

HCA looks healthy

Looking at the deals which priced during Tuesday's $5.78 billion behemoth of a primary session, a trader saw HCA's new 5 7/8% notes due 2023 push up to 102 bid. That was well up from the 100 5/8 bid, 100 ¾ offered level at which the $1.25 billion bond tranche had finished the day on Tuesday. It had earlier priced at par, after having been upsized from the originally announced $1 billion.

A second trader saw the bonds having gained 1½ points to 102 1/8 bid, 102 3/8 offered.

The other half of the Nashville-based hospital giant's $2.5 billion two-part offering meantime was seen modestly higher.

A trader pegged HCA's 4¾% senior secured notes due 2023 at 100½ bid, 100¾ offered, calling it a quarter-to-half-point gain.

A second saw the bonds up 3/8 point at 100½ bid, 1003/4.

HCA had priced the $1.25 billion of those bonds at par, after having upsized that portion of the deal from $1 billion originally.

Existing HCA bonds better

One of the traders also noted that the company's existing issues "were up about a half [point] across the board," spurred by the success of the bond deal

A market source saw HCA's 5 7/8% notes due 2022 at 101¼ bid, with some $15 million having traded by mid-afternoon, making the issue one of the most active in Junkbondland on Wednesday.

HCA's 7¾% notes due 2021 traded at 109 3/8 bid, the source said, with over $12 million having changed hands.

The company's 7 7/8% notes due 2020 and its 7¼% notes due 2020 both hovered at 112¼ bid, on mid-afternoon volume of over $7 million and $5 million, respectively.

Tuesday issues trade up

Other Tuesday issues seen in Wednesday's market included another healthcare name, IMS Health, whose 6% notes due 2020 had priced at par and then had moved up in initial aftermarket dealings to go home quoted at 101¾ bid, 102¼ offered.

In Wednesday's dealings, the Parsippany, N.J.-based healthcare technology and information company's $500 million of paper gained ½ point, a trader said, to 102¼ bid, 102½ offered, while a second trader also saw the notes at that level.

"They didn't add a ton today," another trader said, "but they're up some, and still trading well," around 102 1/8 bid, 102½ offered.

"It wasn't a big gain today, but they were still holding all of yesterday's gains, plus a little."

That trader also saw CNH Global's 3 7/8% notes due 2015 "having a good day today," seeing them trade up to 102¼ bid, 102½ offered, versus Tuesday's closing level around 101½ bid, 101¾ offered.

He noted that the Burr Ridge, Ill.-based heavy equipment manufacturer's quickly shopped $750 million deal, massively upsized from an originally announced $500 million, had priced at par on Tuesday via its CNH Capital LLC unit.

He said that the bonds were yielding about 3%, which he called "almost 100 basis points tighter from where it had priced, in just two days."

Besides the attractive short maturity, offsetting the relatively stingy coupon, "it came too cheap - they priced it too cheap, which also helped, obviously."

A second trader also saw the bonds having moved up, to about 102 1/8 bid, 102 3/8 offered from 101 5/8 bid, 101 78 offered.

Another gainer was Radio Systems' 8 3/8% senior secured second-lien notes due 2019. A trader said that the Knoxville, Tenn.-based pet products manufacturer's $250 million deal had traded around late in the day on Tuesday at 101½ bid, 102 offered, well up from their par pricing level. On Wednesday, he said, the bonds had pushed up to 102 bid, 102½ offered.

A second trader - who had not seen the bonds trade late Tuesday - saw them on Wednesday at 101¾ bid, 102 offered.

Dematic Holding Sarl's 9% /9½% PIK senior notes due 2016 traded at 100 3/8 bid, 100 5/8 offered on Wednesday.

On Tuesday, the Luxembourg-based logistics and materials handling company's $275 million of the notes had priced at par to yield 9.307% on a PIK basis, after upsizing from their original $200 million.

No advantage for Vantage

While most of Tuesday's deals seemed to be holding their own in the secondary market on Wednesday a trader characterized Vantage Drilling's 7½% senior secured notes due 2019 as "kind of having been the dog of the week, at this time."

He saw the bonds trading at par bid, 100¼ offered, opining "that one's really not going anywhere. It was clearly one of the underperformers."

Vantage, a Houston-based offshore contract energy driller, had priced the quick-to market $1.15 billion deal at par on Tuesday via its Offshore Group Investment Ltd. subsidiary.

A second trader also saw the bonds anchored to their issue price.

Indicators keep gaining

Away from the new issues, a trader said that overall, the secondary market was up about ½ point.

Statistical indicators of junk market performance were seen firmer for a third straight day on Wednesday.

The Markit Group CDX North American Series 19 High Yield Index was up for a third straight session, by 11/16 point, to end at 101 11/16 bid, 101 13/16 offered. That followed the 15/16 point jump on Tuesday.

The KDP High Yield Daily Index meantime also pushed higher for a third consecutive session, to 74.69, up 16 basis points on the day. That followed Tuesday's 17 bps climb.

Its yield came in by 5 bps to finish at 5.96%. On Tuesday, the yield had tightened by 7 bps.

And the widely followed Merrill Lynch U.S. High Yield Master II Index put up its fifth consecutive winning session Wednesday, as it rose by 0.208%. That followed Tuesday's gain of 0.162%.

The latest advance lifted its year-to-date return to 13.351% - a new peak level for the year so far - from Tuesday's 13.155%, the previous high point for 2012.

United Rentals rises

Among specific secondary names, a trader said that United Rentals (North America) Inc.'s bonds "saw some trading" following the Greenwich, Conn.-based equipment rental company's favorable third-quarter numbers.

He quoted its 9¼% notes due 2019 up ½ point at 114 bid, and its 8 3/8% notes due 2020 up 1 1/8 points at 1101/2.

A second trader saw the latter bonds "up a point, and maybe a little more, at 110 bid, 111 offered."

United Rentals reported that its earnings rose 12.3% on increased demand for its industrial and commercial rental equipment amid a recovering construction market.

It posted net income of $73 million, or 70 cents per share, versus $65 million, or 91 cents per share, in the year-ago third quarter; per-share earnings fell because of a sizable increase in the number of outstanding shares.

During its conference call following the release of the results, company executives also spoke about its continuing de-leveraging efforts, predicting a ratio of 3.0 times debt versus EBITDA by the end of next year, versus just under 4 times currently (see related story elsewhere in this issue).

Springleaf up on RMBS deal

A trader said that "a ton" of Springleaf's 6.9% notes due 2017 traded, seeing them up 2 to 3 points on heavy volume to close at 89½ bid, 90½ offered.

He said that followed the news that the lender with augment its balance sheet by selling $787 million of mortgage-backed securities.

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