TitleMax prices add-on; Reynolds launches giant deal; secondary stronger; Nortel heads north

By Paul Deckelman and Paul A. Harris

New York, July 19 - TMX Finance LLC and TitleMax Finance Corp. priced a quickly shopped $60 million add-on to their existing bonds on Tuesday, the only new deal that came to market all day. The auto-title lender's new bonds were not seen in the aftermarket.

But the primaryside still saw some activity, especially with the launch of Reynolds Group's $2 billion two-part offering of eight-year bonds, which will be used to fund the consumer food and beverage packaging maker's big buyout of sector peer Graham Packaging Co. Inc. The Reynolds deal hit the road Tuesday and is expected to price next week.

Also heard starting a roadshow for expected pricing next week was a $450 million offering of eight-year bonds from sporting goods and outdoor supplies retailer Academy Ltd. The deal will partly fund the buyout of the company.

Price talk emerged on several issues that could price Wednesday once their order books close, including SunCoke Energy Inc., Trader Corp. and Capsugel FinanceCo SCA.

Traders meantime saw recently priced deals mostly continuing to hold their own.

In the secondary market away from the new issues, most indicators delivered positive readings. Nortel Networks Corp.'s bonds rose on a favorable ruling by the Canadian court overseeing the communications technology company's liquidation.

TitleMax drives through

With rallying equity markets serving as a "constructive" backdrop, the primary market sparked to life on Tuesday, sources said.

TMX Finance and TitleMax Finance completed the day's only deal, an upsized, quick-to-market $60 million non-fungible add-on to their 13¼% senior secured notes due July 15, 2015 (B2/B+) that priced at 107.

The re-offer price came on top of price talk.

The yield to maturity is 11.028%, and the yield to worst is 10.454%.

Jefferies & Co., Inc. ran the books for the general corporate purposes deal.

The original $250 million issue priced at 99.078 to yield 13½% in June 2010, so the Savannah, Ga.-based auto title lending company realized a notable 2.22% of interest savings versus the yield printed on the original notes.

In the market with a deal from the same sector is Cleveland, Tenn.-based payday loan and title loan firm Main St. Personal Finance, Inc. via debut bookrunner Cortview Capital.

Main St.'s $95 million offering of eight-year senior secured notes (B3/B-) was talked last week with a 13% to 13½% yield.

The deal is going well and could price during the present week, an informed source told Prospect News on Tuesday.

Reynolds rolls out $2 billion

The active new issue calendar saw a substantial buildup during the session.

Reynolds Group started a roadshow for a $2 billion two-part offering of eight-year notes.

The deal features $1.5 billion of senior secured notes and $500 million of senior unsecured notes.

Credit Suisse Securities (USA) LLC and HSBC Securities (USA) Inc. are the joint bookrunners.

Proceeds, along with proceeds from a $2 billion term loan, will be used to help fund the purchase of Graham Packaging.

Academy starts roadshow

Academy also began a roadshow on Tuesday for its $450 million offering of eight-year senior notes (Caa1/CCC+/).

Physical bookrunner Credit Suisse is on the left and will bill and deliver. Goldman Sachs & Co. is the joint lead physical bookrunner. Barclays Capital Inc. and Morgan Stanley & Co. LLC are joint passive bookrunners.

The Rule 144A-for-life notes come with three years of call protection. They feature a three-year 40% equity clawback and a 101% poison put.

Proceeds from the notes, along with proceeds from a $1.49 billion credit facility, will be used to help fund the buyout of Academy by Kohlberg Kravis Roberts & Co. LP and to repay debt.

Talking the deals

Setting the stage for an active Wednesday session in the primary, SunCoke Energy talked its $400 million offering of eight-year senior notes (B1/B+/) with a yield in the 7¾% area on Tuesday. This is tighter than the 8% shadow talk that surfaced late last week.

J.P. Morgan Securities LLC, Credit Suisse, Barclays, Citigroup Global Markets Inc. and RBS Securities Inc. are the joint bookrunners.

Trader talked its $275 million offering of seven-year senior secured notes (confirmed B3/expected B) with a yield in the 10% area, right on top of where initial guidance was heard late last week.

RBC Capital Markets, LLC has the books.

And Capsugel FinanceCo talked its €325 million offering of eight-year senior notes (Caa1/B) with a 10% to 10¼% yield.

Barclays, Deutsche Bank Securities Inc., UBS Securities LLC, Mizuho Securities USA Inc. and KKR Capital Markets are the joint bookrunners.

All three deals, SunCoke, Trader and Capsugel, are set to price on Wednesday.

TitleMax a secondary no-show

In the secondary realm, traders saw no aftermarket activity at all in the new TitleMax add-on, citing the smallish size of the quickly marketed transaction.

INC bonds a bit softer

Among recently priced new issues, a trader said that INC Research, Inc.'s 11½% notes due 2019 "seemed to be offered at par in a couple of spots," down a little from where the company's bonds had been trading since their pricing earlier in the month.

The Raleigh, N.C.-based pharmaceutical contract research company's $300 million offer - upsized from the originally planned $250 million - priced at par on July 7. It then moved as high as 101 bid, 101½ offered in initial aftermarket dealings before coming off that peak level to settle in around par bid, 100½ offered.

Tuesday was the first time in some days that the bonds had been seen around.

At another desk, a trader said that the INC issue "has been kind of wrapped around" a 993/4-par level "for the last week or so. It really hasn't gone anywhere. It hasn't gotten hurt, but it really hasn't gone anywhere either."

Other new deals hold their own

While INC Research looked a little softer, "everything else appears to be - I don't want to say running up, but holding its own," the first trader said.

For instance, he saw SRA International, Inc.'s 11% notes due 2019 at 103¼ bid. That's about where the Fairfax, Va.-based government technology contractor's $400 million issue had settled in after pricing on Friday at par. The bonds had pushed as high as the 103 region in initial aftermarket trading later that same session and have been there ever since.

Another trader said "that bond continues to trade well" in the 103-103½ area. "I think most of the deals that have come in the last week, or week-and-a half, are trading very well at this point," he added.

The first trader said that "everything else" besides INC and SRA - such as Warner Music Group Corp., Level 3 Communications, Inc., Exam Works Group, Inc., Dynacast International LLC and Equinix, Inc. - "is pretty much bid where it's been the last couple of days, if not up just slightly."

New York-based music publishing and recording giant Warner's WMG Acquisition Corp. unit brought an upsized $765 million of 11½% notes due 2018 Thursday at 97.673 to yield 12% as part of a $1.065 billion three-part mega-deal. They were seen around 99 bid, 99½ offered on Tuesday. The tranche had been increased from an originally shopped $695 million.

Broomfield, Colo.-based internet backbone network operator Level 3's upsized $600 million add-on to its Level 3 Escrow Inc. 8 1/8% notes due 2019, which priced at 98.545 on Thursday to yield 8 3/8%, were hanging in at par bid, 100½ offered. The drive-by deal was doubled in size from the originally announced $300 million.

Atlanta-based health-care insurance services company ExamWorks Group Inc.'s $200 million of 9% notes due 2019, which priced on Thursday at par, were anchored around 101¼ bid, 102¼ offered.

Charlotte, N.C.-based die-cast products manufacturer Dynacast's $350 million of 9¼% senior secured second-lien notes due 2019, downsized from $375 million, were being quoted still at the 102 bid level. They priced at par on July 12.

And Redwood City, Calif.-based data centers operator Equinix's 7% notes due 2021, upsized to $750 million from the originally announced $500 million, priced at par on July 6 and then moved smartly up to above the 102 bid level, where they have been ever since.

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