United, CMS, B&G, Scotts price, others slate as market awaits Icahn deal; new bonds move up

By Paul Deckelman and Paul A. Harris

New York, Jan. 11 - The second week of the new year kicked off on Monday with a drumfire of activity from the primary market, which seems to have smoothly hit its stride after last week shaking off whatever rust had accumulated from its inactivity the last two weeks of December.

CMS Energy Corp. and Scotts Miracle-Gro Co. brought opportunistically timed drive-by offerings to the junk market, which priced in the afternoon just hours after they surfaced. Likewise, B&G Foods, Inc., which had announced an upcoming new deal just on Friday, priced its issue.

The big deal of the day, at least size-wise, was United Air Lines Inc.'s offering of senior secured notes. The deal - originally structured as a $500 million one-tranche transaction - ultimately was upsized and restructured with the addition of a $200 million second-lien tranche, ranked junior to the original first-lien notes. That deal came to market too late in the session for any aftermarket activity. However, the three smaller deals, which all came earlier in the day, were heard to have moved up from their respective pricing levels when they were freed doe secondary dealings.

While that was going on, several new deals moved onto the forward calendar to take the places of those which priced - Jarden Corp.'s $400 million offering of senior subordinated notes, and a pair of smaller deals from Stone Energy Corp. and from Canada's Gibson Energy ULC. From European borrowers came word of upcoming offerings from Fresenius Medical Care AG, Virgin Media Secured Finance plc, HeidelbergCement AG and even U.K. soccer powerhouse Manchester United. China's Evergrande Real Estate was also heard to be bringing a new deal, to be marketed via a global roadshow.

Looming over the primary-side like the proverbial elephant in the room was Icahn Enterprises LP/Icahn Enterprises Finance Corp.'s $2 billion, two-part offering of senior notes. Price talk emerged Monday on the first mega-deal of the new year, which is expected to come to market on Tuesday morning and which will be closely watched as an indicator of how hungry Junkbondland is for big new deals. With its split rating, the deal is expected to attract interest from both junk bond investors as well as investment grade players. Stone Energy's deal is also seen as Tuesday business, as is a scheduled calendar offering of senior secured notes from Marquette Transportation Co. LLC.

Away from the new deal arena, the secondary sphere continued to notch gains. One of the biggest movers was Energy XXI Gulf Coast Inc., whose bonds rose, along with the shares of its parent company, Energy XXI Ltd., on the news of a significant potential oil or gas find at one of the Gulf of Mexico wells in which Energy XXI has an ownership interest.

Automotive parts suppliers such as Visteon Corp. and Cooper-Standard Automotive each drove higher on investor hopes that things might be on the way back up in the auto industry.

CMS prices tight

In Monday's primary market CMS Energy Corp. priced a $300 million issue of 6¼% 10-year senior notes (Ba1/BB+/BB+) at a 250 basis points spread to Treasuries.

The spread printed at the tight end of the Treasuries plus 262.5 basis points price talk.

The reoffer price was 99.436, resulting in a yield of 6.326%

JP Morgan, BNP Paribas, RBS Securities, Scotia Capital and Wells Fargo Securities were joint bookrunners.

B&G brings $350 million

Elsewhere B&G Foods, Inc. priced a $350 million issue of 7 5/8% eight-year senior notes (B+) at 99.271 to yield 7¾%.

Credit Suisse Securities, Barclays Capital, Bank of America Merrill Lynch and Goldman, Sachs & Co. were joint bookrunners.

Proceeds will be used to fund the tender for the Parsippany, N.J.-based company's 12% subordinated notes due 2016 and 8% senior notes due 2011.

Scotts' $200 million drive by

Scotts Miracle-Gro Co. priced a $200 million issue of 7¼% eight-year senior notes (B1/B+) at 99.254 to yield 7 3/8%.

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

Bank of America Merrill Lynch and JP Morgan were joint bookrunners.

Proceeds will be used to repay bank debt.

Marquette sets talk

Marquette Transportation Co., LLC set price talk for its $250 million offering of seven-year second-lien notes (B2/B-) at the 11¼% area on Monday.

The books close at 9 a.m. ET on Tuesday. The deal is expected to price on Tuesday afternoon.

J.P. Morgan Securities Inc. has the books for debt refinancing deal.

Icahn talks split-rated deal

Icahn Enterprises LP and Icahn Enterprises Finance Corp. set price talk on Monday for its $2 billion two-part offering of senior notes.

A tranche of six-year notes, which come with three years of call protection, is talked to yield 7¾% to 7 7/8%.

Meanwhile a tranche of eight-year notes, which come with four years of call protection, is talked to yield 8% to 8 1/8%.

The re-offer prices of both tranches are expected to reflect discounts of 0.5 to 0.75 point.

Pricing is expected on Tuesday morning.

The offering, via bookrunner Jefferies & Co., is expected to come with split ratings. Moody's Investors Service assigned its Ba3 ratings to the notes. Standard & Poor's is expected to rate the notes BBB-.

Jarden to price $400 million Wednesday

Meanwhile the forward calendar continued to build.

Jarden Corp. plans to price $400 million equivalent of 10-year senior subordinated notes, in dollar and euro denominations, on Wednesday or Thursday.

In the United States, where the notes are coming in an offering that has been registered with the Securities and Exchange Commission, the notes were marketed via a Monday conference call.

There will be a two-team European roadshow on Tuesday and Wednesday, where the notes are being sold in a private offering.

Deutsche Bank Securities and Barclay Capital are joint physical bookrunners.

Proceeds will be used for general corporate purposes including debt repayment, capital expenditures and potential acquisition financing.

Stone Energy announces $250 million

Stone Energy Corp. plans to price a $250 million offering of seven-year senior notes on Tuesday, the company announced Monday.

Bank of America Merrill Lynch and JP Morgan are joint bookrunners for the debt refinancing deal.

Gibson Energy to roadshow

Meanwhile Gibson Energy ULC and GEP Midstream Finance Corp. will begin a brief roadshow on Wednesday for a $200 million offer of eight-year senior unsecured notes.

The deal is expected to price on Friday.

UBS Investment Bank is the left bookrunner. Morgan Stanley is the joint bookrunner.

Proceeds will be used to fund acquisitions and for general corporate purposes.

Virgin Media to price £500 million

Virgin Media Inc. will host an investor call at 11 a.m. ET on Tuesday for its £500 million equivalent offering of eight-year first-lien notes (expected ratings Ba2/BB/BB+).

The deal, which is coming in dollar-, euro- and sterling-denominated notes, is expected to price on Wednesday.

JP Morgan and Goldman Sachs & Co. are global coordinators for the Rule 144A/Regulation S with registration rights offer. BNP Paribas, Calyon Securities, Credit Suisse, Deutsche Bank Securities, GE Capital, HSBC, Lloyds, RBS Securities, UBS Investment Bank, Bank of America Merrill Lynch, Barclays Capital and Citigroup are joint bookrunners.

Proceeds will be used to repay a portion of the outstanding A and B tranches of the existing senior credit facility.

HeidelbergCement to sell €1 billion

HeidelbergCement AG will host a 10:15 a.m. London time investor call on Tuesday for its €1 billion minimum offering of senior unsecured notes (B1/B+/BB-).

The deal is expected to price late Tuesday or early Wednesday, London time.

The notes will come with maturities of August 2015 and April 2020.

Deutsche Bank, Citigroup, Commerzbank, ING, Landesbank Baden-Württemberg, RBS Securities and Unicredit are joint bookrunners for the Regulation S offer.

The Heidelberg, Germany-based cement company will use the proceeds to repay bank debt.

Fresenius plans €250 million

FMC Financ VI SA, a financing unit of Germany's Fresenius Medical Care AG & Co. KgaA, began a brief roadshow on Monday for a €250 million offering of non-callable 6.5-year senior notes (Ba2/BB+).

Pricing is expected during the middle part of the present week.

Deutsche Bank Securities, Barclays Capital, Bank of America Merrill Lynch and Morgan Stanley are joint bookrunners for the Rule 144A/Regulation S with registration rights offering.

Proceeds will be used to repay short term debt and for general corporate purposes.

Manchester United to bring £500 million

MU Finance plc, a financing unit of U.K.-based professional soccer franchise Manchester United, will conduct roadshows in Asia and Europe this week for an expected £500 million equivalent offering of seven-year senior secured notes, according to an informed source.

The roadshow moves to the United States next week.

JP Morgan, Bank of America Merrill Lynch, Deutsche Bank Securities, Goldman Sachs & Co. and RBS Securities are joint bookrunners. KKR is the co-manager.

Proceeds will be used to refinance first- and second-lien debt.

New deals trade firmer

When the new B&G Foods 7 5/8% notes due 2018 were freed for secondary dealings, a trader saw the Parsippany, N.J.-based packaged foods company's bonds having firmed smartly to 101¾ bid, 102½ offered from the 99.271 level at which the paper had priced earlier in the session.

A trader meantime said that Scotts Miracle-Gro's 7¼% notes due 2018 pushed up to 1011/4, shortly after pricing at 99.254.

He noted market chatter to the effect that the deal was well oversubscribed, having played to a book of some $2.9 billion of orders, "so I would have to think that one is going to be up a little."

CMS's 6¼% notes were being quoted on a spread basis, a trader said, seeing the bonds having tightened to 235 bps bid, 225 bps offered - well in from the 250 bps over level at which they had priced earlier in the day.

Waiting for Icahn deal

"We're waiting to see what happens with the big deal [Tuesday], Icahn," a trader said, adding that "the key to that is going to be the participation we get from the crossover guys," in view of the fact that the split-rated $2 billion deal is expected to see interest from both the junk and investment-grade worlds..

Market indicators again robust

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index up ½ point on Monday at 101 1/8 bid, 101 5/8 offered, after having been unchanged on Friday.

The KDP High Yield Daily Index meanwhile rose by 14 bps on Monday to 72.24, after having firmed by 4 bps on Friday. Its yield tightened by 4 bps to 7.77%, after having narrowed by 1 bp the previous session.

Advancing issues continued to lead decliners, by a five-to-four margin.

Overall market activity, as measured by dollar volume levels, fell 9% from Friday's pace.

However, even though the cornucopia of new deals dominated junk marketeers' attention, a trader said that "the secondary market was active. We saw some decent trading in a variety of names. We had some 'bid wanted' lists, some 'offer wanted' lists, and we had accounts working on situations."

He said that among the names his shop was busy in were HCA Inc., CIT Group Inc. and Kansas City Southern Railway Co.

"It was not just new issues," he declared, "at least from our perspective."

He also saw activity in such names as American International Group, particularly its International Lease Finance Corp. unit, Freeport-McMoRan Copper & Gold Inc. and Coventry Health Care Inc., saying that "a fair number" of the latter bonds traded.

Sallie Mae an active issue

The trader said that "the leader in the barn right now" in terms of overall volume, was SLM Corp., several issues of whose bonds traded fairly actively. Taken collectively, he said, well over $100 million of the Reston, Va.-based education financing company's bonds changed hands. Activity was split "across the board," he said, between issues of fixed-coupon bonds and floating-rate notes. He saw the bonds sideways to up a little.

Another market source pegged 'Sallie Mae's' 5 3/8% notes due 2013 at 96½ bid, up nearly 2 points on the day.

Energy XXI improves

Traders saw a handsome gain in the bonds of oil and gas exploration and production operator Energy XXI Gulf Coast on the news that an offshore well in the Gulf of Mexico partly owned its corporate parent, Bermuda-based Energy XXI Ltd., has the potential for yielding significant amounts of oil or natural gas.

One saw the company's 10% notes due 2013 up nearly 3 points on the day at just over 99, in brisk trading.

Another said that the issue had seen "pretty good volume," in firming from recent levels around 96.

The parent company's shares, meantime, jumped $1.05, or nearly 40%, in Nasdaq dealings.

Auto credits drive higher

A trader said that Visteon "kept trading up," seeing its 78% notes due 2014 having "moved up a few" [points] to around 49 bid. 'They continued their march higher," he said.

He called the bonds 11/2-point gainers on the day. He said that they had trading in a 461/2-47ish context for most of the day, but had moved up to around 49 late in the day. There was "decent volume" in the name.

He also saw Cooper Standard's 8 3/8% notes due 2014 up another 5 points on the day to 36-38, "on decent volume, too."

A market source attributed the gains to generalized sentiment that things were improving in the badly battered auto industry.

He saw General Motors Corp.'s 8 3/8% benchmark bonds due 2033 "pretty much in that 29-30 range" at which the bonds have recently traded. He said there was "some trading," in the credit, "OK size, not too robust."

Crown Castle unmoved on big deal

Elsewhere, a trader saw exactly zero impact on Crown Castle International Inc.'s junk bonds from the news that the Houston-based communications antenna operator had sold $1.9 billion in senior secured notes on Friday, with the proceeds, plus other cash, slated to repay the company's Series 2005-1 notes.

"Nope. Nothing. I didn't see a single trade in Crown Castle today."

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