Charter brings $1.6 billion drive-by, trades up, GMAC prices; International Wire slates deal

By Paul Deckelman and Paul A. Harris

New York, April 14 - Charter Communications Inc. became the third well-known junk bond issuer in as many days to bring a big drive-by deal to the high yield market, as it priced $1.6 billion of eight- and 10-year senior notes on Wednesday - following in the footsteps of Cablevision Systems Corp., which did it on Monday and Harrah's Entertainment Corp., which did so on Tuesday. When the new notes from Charter units CCO Holdings, LLC and CCO Holdings Capital Corp. were freed for secondary action late in the session, they moved up smartly from the par level at which each tranche had priced.

Also on the domestic primary scene, Camden, N.Y.-based electrical manufacturer International Wire Group Inc. announced plans to sell $140 million of five-year senior secured notes, and was heard by syndicate sources to be aiming for a pricing around the middle of next week.

GMAC International Finance BV, a Dutch affiliate of GMAC Financial Services, came to market with €1 billion of five-year notes, which were marketed only to non-U.S. investors under Regulation S.

That deal was one of several to emerge on Wednesday from a suddenly busier overseas high yield market. British travel and leisure company Thomas Cook Group plc was heard by sources to be shopping around a two-part deal, consisting of euro-denominated five-year notes and sterling denominated seven-years.

Price talk was heard on Spanish construction and engineering company Obrascon Huarte Lain SA's benchmark-sized five-year bond issue.

From the Chinese real estate sector, Evergrande Real Estate Group, Ltd., did an opportunistically timed drive-by add-on offering to its 13% notes due 2015, while Glorious Property Holdings Ltd. was heard to be hitting the road starting Thursday to market a dollar-denominated offering of global bonds

On the secondary side, apart from any new deals, NewPage Corp.'s bonds continued their recent firming trend for much of the day, despite a lack of any real news about the Miamisburg, Ohio- based coated-paper company, but ended the session little changed, on active volume.

Charter returns

A little over four months after it emerged from a prearranged Chapter 11 bankruptcy, Charter Communications, a name ultra-familiar to observers of the high-yield bond market, returned to price a $1.6 billion two-part drive-by deal on Thursday.

Both tranches came at the tight ends of price talk, and traded sharply higher in the secondary market, according to a hedge fund manager, who added that clearly the deal was well received.

CCO Holdings, LLC and CCO Holdings Capital Corp. priced $1.6 billion of senior notes (B2/B) in two par-pricing tranches.

The deal came with $900 million of 7 7/8% eight-year notes, which priced at the tight end of the 8% area price talk, and $700 million of 8 1/8% 10-year notes, which also priced at the tight end of talk ,in this case for a yiled in the 8¼% area.

Credit Suisse, Bank of America Merrill Lynch, Citigroup, Deutsche Bank Securities, JP Morgan and UBS Investment Bank were joint bookrunners.

The St. Louis-based cable company will use the proceeds to finance its tender for CCO Holdings' 8¾% senior notes due 2013 and Charter Communications Operating, LLC's 8 3/8% senior second-lien notes due 2014.

The notes shot higher in the secondary market, the hedge fund manager said, spotting the new 7 7/8s at 102¼ bid, 102¾ offered, and the new 8 1/8s at 102½ bid, 103 offered.

GMAC brings €1 billion

Earlier Wednesday, Netherlands-based GMAC International Finance BV priced a €1 billion issue of 7½% five-year fixed-rate notes (B3/B/B) at 99.496 to yield 7 5/8%.

The yield printed on top of the price talk.

Deutsche Bank, BNP Paribas and RBS Securities were joint bookrunners.

The European front

It was a comparatively busy news day in the European primary market, on Wednesday.

Apart from GMAC International, Spain's Obrascon Huarte Lain SA talked its benchmark-sized euro-denominated offering of five-year senior unsecured notes (Ba1/BB-) to yield in the 7½% area.

The Regulation S deal is expected to price on Thursday, in Europe.

Santander, Citigroup, Credit Agricole, RBS and SG Corporate & Investment Banking are the joint bookrunners.

Meanwhile England's Thomas Cook Group plc announced plans to price €300 million five-year senior notes and £200 million seven-year senior notes on Thursday.

Barclays Capital, Commerzbank, HSBC and SG Corporate & Investment Banking are leading the euro-denominated notes tranche.

Barclays Capital, HSBC and Lloyds are leading the sterling-denominated tranche.

Both tranches are unrated.

International Wire to sell five-year deal

Back Stateside, International Wire Group, Inc. will host an investor call at 12:30 p.m. ET on Thursday for its $140 million offering of five-year senior secured notes (expected ratings B3/B).

The Rule 144A for life, and Regulation S deal is set to price in the middle part of the April 19 week.

Wells Fargo Securities has the books.

Proceeds will be used to redeem the company's existing 2011 notes and to pay a distribution to shareholders and option holders.

Glorious Property to roadshow

Meanwhile, there was more news from the Chinese property development sector.

Glorious Property Holdings Ltd. will begin a roadshow on Thursday for a dollar-denominated offering of global bonds (expected ratings B1/B+).

Deutsche Bank Securities, JP Morgan and Standard Chartered Bank are leading the deal.

The Hong Kong-based mainland China property developer plans to price the bonds at the conclusion of the roadshow, pending market conditions.

That news trails Tuesday's announcement that China's Evergrande Real Estate Group, Ltd. priced a $600 million add-on to its 13% guaranteed senior secured fixed-rate notes due Jan. 27, 2015 at par in a private placement.

The whole deal was taken down by two accounts, a market source told Prospect News.

Sun Kung Hai Investments was the placement agent.

The Guangzhou, China-based property company priced the original $750 million issue at par on Jan. 21, 2010.

Meanwhile, Shenzhen, China-based property development company, Kaisa Group Holdings Ltd. is now in the market with a $300 million offering of five-year senior guaranteed notes (B2/B+).

The roadshow for the deal, which is being led by joint bookrunners Citigroup, Credit Suisse and UBS Investment Bank, is set to wrap up on April. 21.

Charter churns higher

When the new Charter Communications bonds moved into the secondary arena after their late-day pricing, a trader initially saw both tranches bid at 101, with no offerings seen, versus their par issue price.

However, another trader a little later on said that the new Charter paper "traded very well," seeing the 7 7/8% notes due 2018 up 2½ points from par and the 8 1/8% notes due 2020 "probably a little more than that, so it went very well."

At another desk, a trader saw the eight-year notes at 102¼ bid, 102¾ offered, while pegging the new 10-years at 102½ bid, 103 offered.

Cablevision stays up there

The first trader noted that Cablevision's $1.25 billion two-part deal "obviously did well in front of it, so the [cable] space had a good day today." He saw both tranches up around the 103 bid level.

Another trader saw that deal - which came to market late Monday and then proceeded to move solidly higher when they were freed for trading on Tuesday - "a touch better" in Wednesday's dealings.

He saw the Bethpage, N.Y.-based cable operator and professional sports team owner's new $750 million of 7¾% notes due 2018 at 102 5/8 bid, 103 offered, up from the 102¼ bid, 102½ offered level at which those bonds had begun the day, and well up from par, where they had priced on Monday.

Cablevision's $500 million of new 8% notes due 2020 were also that same "touch better," he said, at 102 7/8 bid, 103 1/8, up a quarter-point from their early levels, and up as well from their par issue price.

Harrah's stays higher

A trader said that the new Harrah's Operating Escrow LLC/Harrah's Escrow Corp. 12¾% second-priority senior secured notes due 2018 "were trading at very tight spreads," seeing them earlier in the session at 1001/4-100 3/8, before going out around 100 3/8 bid, 100½ offered, "so there was not a lot of movement there."

The Las Vegas-based gaming giant's $750 million of new paper, upsized from the originally announced $500 million, continued to trade well above the 98.778 level at which that offering had priced during Tuesday's session to yield 13%.

The trader, meantime, while seeing "lots of markets in the new stuff," saw little or no activity in any of the three issues which Harrah's plans to take out with the proceeds from its new bond deal - the 5½% senior notes slated to come due on July 1, the 8% senior notes due 2011 and the 8 1/8% senior subordinated notes, also due 2011

Western Express holds gains

Also among recently priced issues, a trader said he'd seen some of Western Express, Inc.'s new 12½% senior secured notes due 2015 trading at 953/4, where they were left offered; The Nashville-based freight trucking company's $285 million deal - upsized a little from the originally planned $275 million - had priced on Friday at 94.735 to yield 14%.

Market indicators continue rise

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index rise ¾ point on the day Wednesday at 100¾ bid, 101¼ offered, after having gained ¼ in each of the last three sessions.

The KDP High Yield Daily Index meantime gained 13 basis points on Wednesday to end at 72.57, after having risen 16 bps on Tuesday, while its yield narrowed by 4 bps for a second consecutive session to 7.66%.

Advancing issues continued to dominate the decliners on Wednesday, widening their bulge to around four to three.

Overall market activity, represented by dollar-volume levels, rose nearly 16% on Wednesday from levels seen the previous session.

NewPage rise continues

A trader said that NewPage Corp.'s bonds "moved up a little bit" on top of the gains seen during Tuesday's session, at least initially. He said that there was 'a lot of volume" in the coated-paper company's 10% notes due 2012, seeing them trading around during the morning at bid levels as high as 76½ to 771/2. However, by the end of the day, he said the bonds had "tailed off" and were going home pretty much unchanged, around 75, though on "good volume."

Another trader agreed that while NewPage had coursed ahead by 2 or 3 points early on, "they gave it all back by the end of the day."

A market source said round-lot volume in the credit was over $40 million on the day, making it probably the most actively traded junk bond - but said that while the bonds had pushed up above 77 by mid-morning, a 3 point gain, the round-lot close was a little over 74, unchanged, although there were a couple of smallish trades after that at somewhat higher levels.

NewPage's bonds, and those of Memphis-based sector peer Verso Paper Corp., had risen by several points on Tuesday, no doubt helped by a Credit Suisse upgrade of Verso's stock and its assessment of a more positive tone in the coated-paper business.

Realogy rallies

Among the financials, a trader said that Realogy Corp.'s 10½% notes due 2014 were at 90 bid, 91 offered, which he called up "three or so points" on "decent trading."

There was no fresh news out about the Parsippany, N.J.-based real estate brokerage operator that might explain the improvement.

A second trader said that the company's paper may be benefitting from a perception that beleaguered homeowners might finally be getting some foreclosure relief from the banks and the government.

ResCap steady despite sale concerns

A trader said that there was little activity in Residential Capital LLC's paper, despite a New York Post story claiming that parent GMAC Financial Services is having trouble selling the Minneapolis-based mortgage unit; the story warned that this could eventually lead to another taxpayer-funded bailout for GMAC, which has already received more than $17 billion from Uncle Sam since 2008. A GMAC spokesperson called the story "absolute nonsense."

However, another trader noted that ResCap's 8½% notes coming due on May 15 were trading at par and its 6 3/8% notes maturing on June 30 were at 98, opining that "30-day and 60-day paper normally doesn't trade this cheap." He suggested that since the government is now the majority owner of ResCap parent GMAC, "and can change the rules any time they want to, accounts are avoiding the short stuff."

Lehman little moved despite legal maneuvers

A trader saw Lehman Brothers Holdings Inc.'s various bond issues around 24, calling that "pretty much unchanged, about where it's been."

Another trader said that he thought there might have been more activity in the failed New York-based investment bank's legacy bonds "with that news item about them getting back $11 billion, potentially, from Barclays - but I guess it's too small relative to the whole pool."

On Friday, a Manhattan Federal judge rejected a bid by U.K. banking giant Barclays to throw out a motion by Lehman to recover what it described as an $11 billion "windfall" which Barclays supposedly made on the purchase of the bankrupt firm's North American brokerage operations, and instead directed immediate opening statements in Lehman's lawsuit. If Lehman is successful in forcing Barclays to disgorge the $11 billion, however, it would satisfy only a small portion of the approximately $260 billion of claims by Lehman bondholders and other creditors.

AIG unit to sell planes, gains

A trader saw International Lease Finance Corp.'s bonds not much changed despite the news that the aircraft-leasing unit of troubled American International Group Inc. had agreed to sell 57 of its planes to Australia's Macquarie Group to raise $2 billion of cash - well below the planes' $2.3 billion approximate book value.

He saw the ILFC 5.90% hybrid notes at 80 bid, 81 offered, while its 5.45% notes due 2011 were unchanged at par bid. He said "a lot of bonds did trade [Tuesday], but I didn't see the same today."

He said that "all the [ILFC] stuff has been drifting up - it's in the high 90s to par, out to 2013." He saw the levels mostly unchanged and said of the aircraft deal "I don't know how much that matters."

However, at another desk, a trader - while acknowledging that the deal "didn't do anything for the really short paper" - saw "a fair amount" of ILFC'S 5 7/8% notes due 2013 trading higher. He said that those bonds, which on Tuesday had traded around 94½ bid, opened Wednesday's dealings at 96 bid, 96¾ bid, and he had them going home late Wednesday at 96¾ bid, "so these were up a good 2 points."

Elsewhere among the junk financials, a trader said that bonds of Washington Mutual Inc.'s savings bank unit, Washington Mutual Bank FA, were at 50½ bid, 51 offered, which he said "doesn't seem much different" than their recent levels. "All of the other stuff," meaning the busted Seattle-based parent company's paper, is trading at or around par, he said.

The trader said that CIT Group Inc.'s 7% notes due between 2013 and 2017 were "another ½ [point] higher today," building on the recently stronger levels for the New York-based commercial lender's paper. He quoted CIT's 7% notes due 2013 as having moved up to 98½ bid, while its 7% notes due 2017 rose to 943/4, with other issues somewhere in between. CIT, he said, "always has decent trading activity."

Autos cruise higher

A trader saw General Motors Corp.'s benchmark 8 3/8% bonds due 2033 up a point on the day at 37½ bid, 38 offered, while GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 were likewise a point better at 94 bid, 95 offered.

But another trader called the GM benchmarks unchanged at 36½ bid, 37 offered, in "decent trading," while the Ford long bonds remained at 92-93.

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