Petrohawk, Donnelley quickies, EchoStar pace nearly $5 billion day; Chrysler greatly upsizes

By Paul Deckelman and Paul A. Harris

New York, May 17 - The high-yield primary market was positively on fire on Tuesday, syndicate sources said. Nearly $5 billion of new paper priced - making it one of the busiest days of the year - including an upsized $2 billion two-part offering from EchoStar Corp., a communications satellite operator and provider of home set-top receivers for satellite TV service.

There was also a pair of quickly shopped $600 million deals from oil and gas operator Petrohawk Energy Corp. and from printer and publisher R.R. Donnelley & Sons Co., the latter deal upsized from the $500 million originally announced on Monday.

Also bringing quick-to-market transactions were semiconductor manufacturing services provider Amkor Technology Inc. with a $400 million deal and health-care company Centene Corp. with a $250 million issue.

Pricing off the forward calendar, along with EchoStar, were Longview Fibre Paper & Packaging, Inc.'s $450 million of five-year secured notes, engineering design company BakerCorp. International, Inc.'s $240 million eight-year deal and alternative energy provider First Wind Capital LLC's $200 million of seven-year secured paper.

French automaker Renault SA drove by with a €500 million offering of five-year bonds.

Even with all of those pricings, the forward calendar was not depleted. New deals were announced by wireless operator Cricket Communications Inc., Flint Energy Services Ltd. and Connacher Oil & Gas Ltd., the latter planning a $900 million equivalent issue of U.S. dollar and Canadian dollar secured notes. Integra Telecom Holdings, Inc. and Exopack Holding Corp. were also heard to have hit the road to market new deals.

And auto giant Chrysler Group LLC's already huge two-part issue of eight- and 10-year bonds was massively upsized to $3.5 billion, and price talk was heard out on both tranches.

Junk secondary traders said little was actually happening beyond activity in the new issues.

EchoStar upsizes to $2 billion

An impressive burst of issuance, $4.77 billion in nine dollar-denominated tranches, cleared the primary market on Tuesday.

The Tuesday tally takes the week-to-date issuance to $6.5 billion with three sessions left to play out before the Friday close.

With another $7 billion parked on the forward calendar - most of it set to price before the end of the week - the primary market appears poised to see its second-biggest week ever in terms of dollar amount of issuance, sources say.

That mark is set at $14.2 billion, set early in the present year during the week of Jan. 10. That's $1.2 billion shy of the biggest week in the history of the market: $15.4 billion that priced during the week of Aug. 8, 2010, according to Prospect News data.

Returning to Tuesday's action, the executions were a mixed lot.

One tranche priced inside of price talk. Three priced at the tight end of talk. Two priced on top of talk. One priced at the wide end, and two priced wide of the given price talk.

EchoStar completed an upsized $2 billion two-part notes deal.

An upsized $1.1 billion tranche of eight-year senior secured notes (Ba3/B+) priced at par to yield 6½%.

The tranche was upsized from $1 billion. The yield printed at the tight end of price talk, which had been set in the 6 5/8% area.

In addition, an upsized $900 million tranche of 10-year senior unsecured notes (B3/B-) priced at par to yield 7 5/8%.

The tranche was upsized from $800 million. The yield printed 12.5 basis points inside of price talk that had been set in the 7 7/8% area.

Deutsche Bank Securities Inc. ran the books for the two-part acquisition financing deal, the overall size of which was increased from $1.8 billion.

Petrohawk drives by

Petrohawk Energy priced a $600 million issue of eight-year senior notes (B3/B+) at par to yield 6¼%.

The yield printed 12.5 bps wide of the 6% to 6 1/8% price talk.

Wells Fargo Securities, LLC, Barclays Capital Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Goldman Sachs & Co., J.P. Morgan Securities LLC, Bank of America Merrill Lynch and RBC Capital Markets, LLC were the joint bookrunners for the debt-refinancing and general corporate purposes deal.

Donnelley does $600 million

R.R. Donnelley & Sons priced an upsized $600 million issue of non-callable seven-year senior notes (Ba1/BB+) at par to yield 7¼%, on top of price talk.

Bank of America Merrill Lynch, Citigroup Global Markets Inc. and JPMorgan were the joint bookrunners for the quick-to-market debt-refinancing deal, which was upsized from $500 million.

Longview Fibre upsizes

Longview Fibre Paper & Packaging priced an upsized $480 million issue of 8% five-year senior secured notes (B2/B+) at 99.49 to yield 8 1/8%.

The yield printed at the tight end of price talk, which had been set in the 8¼% area.

Bank of America Merrill Lynch and CIBC World Markets were the joint bookrunners for the dividend-funding deal, which was upsized from $450 million.

Amkor drives by

In drive-by action, Amkor Technology priced a $400 million issue of 10-year senior notes (Ba3/BB) at par to yield 6 5/8%, on top of the price talk.

Deutsche Bank Securities and Citigroup were the joint bookrunners for the debt-refinancing and general corporate purposes deal.

Centene prices $250 million

Centene priced a $250 million issue of 5¾% non-callable six-year notes (Ba2/BB) at 98.753 to yield 6%, at the wide end of the 5¾% to 6% price talk.

Barclays Capital, Bank of America Merrill Lynch and Wells Fargo Securities were the joint bookrunners for the public, quick-to-market debt-refinancing deal.

BakerCorp prices at the tight end

BakerCorp International priced a $240 million issue of eight-year senior notes (Caa1/CCC+) at par to yield 8¼%, at the tight end of the 8¼% to 8½% price talk.

Morgan Stanley & Co. Inc. and Deutsche Bank Securities were the joint bookrunners for the merger financing.

First Wind prices $200 million

Finally, First Wind Capital priced a $200 million issue of seven-year senior secured notes (B3/B+/) at par to yield 10¼%.

The yield printed 12.5 bps beyond the wide end of the 10% area price talk.

Credit Suisse Securities (USA) LLC, Deutsche Bank Securities, Goldman Sachs and RBS Securities Inc. were the joint bookrunners.

The Boston-based wind energy company plans to use the proceeds to redeem its existing term loan as well as to fund capital expenditures and for general corporate purposes.

Renault drives by

In Europe, French automobile manufacturer Renault priced a €500 million issue of 4 5/8% five-year corporate bonds (Ba1/BB+) at a 185 bps spread to mid-swaps on Tuesday.

The spread came at the tight end of the mid-swaps plus 185 bps to 190 bps price talk.

Citigroup, Credit Agricole CIB and Natixis Bleichroeder were the joint bookrunners. Citigroup will bill and deliver.

Cricket to tap 7¾% notes

Cricket Communications plans to price a $400 million add-on to its 7¾% senior secured notes due Oct. 15, 2020 (expected ratings B3/CCC+) on Wednesday.

Goldman Sachs is the left lead bookrunner. Morgan Stanley and Deutsche Bank Securities are the joint bookrunners.

Proceeds will be used for general corporate purposes including the company's accelerated LTE network buildout.

The original $1.2 billion issue priced at 98.323 to yield 8% on Nov. 5, 2010.

Chrysler rejiggers debt offers

Meanwhile, Chrysler Group increased the size of its bond deal to $3.5 billion from $2.5 billion and downsized its term loan B to $2.5 billion from $3.5 billion.

Price talk surfaced on the two-part offering of secured senior notes (B2/B).

A tranche of eight-year notes is talked with a 7¾% to 8% yield. The 10-year tranche is talked to come with a yield that is 25 bps higher than the yield that is printed on the eight-year notes.

Tranche sizes remain to be determined.

The order books for the notes offers close at 10 a.m. ET Thursday, and dealers plan to price the notes thereafter.

Bank of America Merrill Lynch and Goldman Sachs are the joint physical bookrunners. Citigroup and Morgan Stanley are the passive bookrunners. Bank of America Merrill Lynch will bill and deliver.

Proceeds, together with proceeds from new credit facilities and $1.3 billion from Fiat's recently announced exercise of an option to acquire an incremental 16% ownership interest in Chrysler Group, will be used to repay in full Chrysler's loans from the United States and Canadian governments.

Connacher to price

Connacher Oil & Gas plans to price $900 million equivalent of senior secured notes before the end of the present week.

The deal will feature dollar-denominated eight-year notes. That Rule 144A and Regulation S for life tranche will be led by left bookrunner Credit Suisse Securities (USA).

In addition, the Calgary, Alta.-based integrated oil company intends to privately place a Canadian dollar-denominated tranche of seven-year notes via left lead RBC Capital Markets.

Both of those banks are global coordinators and joint bookrunners.

Connacher plans to use the proceeds to refinance its existing first-lien and second-lien notes.

Meanwhile Flint Energy Services began a roadshow on Tuesday for its C$200 million offering of eight-year senior notes.

Credit Suisse Securities and BMO Capital Markets are the joint bookrunners for the debt-refinancing and general corporate purposes deal.

Integra starts roadshow

Integra Telecom Holdings began a roadshow on Tuesday for its $260 million offering of five-year senior notes (expected ratings Caa2/CCC).

JPMorgan and Morgan Stanley are the joint bookrunners for the debt-refinancing and general corporate purposes deal.

Exopack starts $225 million

Exopack Holding will conduct an investor roadshow for its $225 million offering of seven-year senior notes (Caa1/CCC+) on the East Coast of the United States through the remainder of the present week.

The roadshow moves to the West Coast during the week ahead.

Goldman Sachs and Bank of America Merrill Lynch have the books for the debt-refinancing and dividend-funding deal.

First Wind breezes upwards

When First Wind Capital's seven-year secured notes were freed for secondary dealings, traders saw the Boston-based alternative energy provider's new deal catching a favorable tailwind and floating upward.

One saw the bonds at 102 bid on the break, though with no offerings immediately seen. However, he later signaled that the bonds were trading at 102 bid, 103 offered.

A second trader also saw the bonds at 102-103, though he declared "that's kind of where it died," not seeing much trading in the smallish ($200 million) issue.

Yet another trader quoted the bonds at the end of the day at 102 bid, 102¾ offered.

Investors like Longview

Another strong aftermarket performer among the day's new deals was Longview Fibre Paper & Packaging's five-year senior secured notes.

The Longview, Wash.-based corrugated container manufacturer's deal priced at 99.49, and then a trader saw the bonds trading around at 101 bid.

A second trader saw them later in the day at 101 5/8 bid, 101 7/8 offered, well up from issue.

He said that Longview was "the only one" of the Tuesday deals that he saw really trading actively.

Other deals trade near issue

Among the day's other issues that actually priced in time for trading - and some, like the EchoStar mega-deal, did not - a trader saw St. Louis-based health-care services company Centene's six-year notes trading at 98½ bid, 98 7/8 offered, not far from the 98.753 level at which those bonds had priced earlier.

A second trader saw them move up to right around issue at 98¾ bid, 99¼ offered.

Chicago-based publisher R.R. Donnelley & Son's upsized tranche of seven-year notes moved up a little from their par pricing level, a trader said, pegging the deal at 100 5/8 bid, 101 1/8 offered.

He also saw Amkor Technology's 10-year deal straddling its par issue price at 99¾ bid, 100¼ offered.

The Chandler, Ariz.-based provider of manufacturing and packaging services to the semiconductor industry plans to use the deal proceeds to fund its separately announced tender for its $264 million of 9¼% notes due 2016. A market source saw those existing bonds trade up nearly a half-point to right around their takeout level at 105 for those holders tendering bonds by the May 31 early tender deadline. However, activity was limited, the source said, with only a couple of round-lot trades seen.

The EchoStar deal, as noted, came too late in the session for any aftermarket action, and the same was true for the BakerCorp. and Petrohawk Energy offerings.

However, there was some secondary trading in Houston-based Petrohawk's existing bonds, with a market source seeing its 7¼% notes due 2018 up as much as 1¼ point to end at 106¾ bid, although its 10½% senior secured notes due 2014, which also traded around, were unchanged on the session at 114½ bid, and its 7 7/8% paper due 2015 actually lost half a point, finishing at 106½ bid.

Cricket Communications' existing 7¾% notes due 2020 were meantime quoted down by nearly 3 points on the session, a participant said, seeing the bonds late in the day at 101 bid.

Monday deals ease slightly

Looking at the deals that came to market during Monday's session, traders saw Austin, Texas-based energy operator Brigham Exploration Co.'s 6 7/8% notes due 2019 off the highs around 101-102 at which the new deal was quoted after the $300 million drive-by deal - upsized from an originally announced $250 million pricing at par.

A trader said that in Tuesday's action, "they got up to 101 bid, and then [market players] hit 'em down," first to 100 7/8, then successively down to 1003/4, 100 5/8, 100½ and finally to 100 3/8 bid, 100 5/8 offered.

"I know I traded it almost every one-eighth on the way down," he said. Once they hit 100 3/8, he said, "they seemed to have found a floor there."

A second trader saw the bonds at 100½ bid, 100¾ offered.

That session's other new deal, from New York-based online stock-trading company E*Trade Financial Corp., likewise eased on Tuesday.

A trader saw its $435 million of 6¾% notes due 2016 "got down to par," from Monday's late level around 100½ bid, 101 offered, which had followed its par pricing. But after touching down at their issue price, he said they popped back up, a little, to 100¼ bid, 100½ offered at the close.

A second trader saw the new E*Trades at par bid, 100½ offered.

Some players not playing

One of the traders, noting the heavy new-issue calendar, observed that he had "never seen the market" like this.

"There is so much stuff out that usually, the buyside accounts, going into the continuous drop in rates, would buy everything on the calendar and flip out the ones they didn't like, the idea being that you're always there and make sure you get good treatment in the allocations.

"But now, I'm seeing even on these deals that come in size - $1.5 billion or $2 billion - some of these accounts are not playing, and the accounts that are getting what they want are not sellers and obviously the ones not playing aren't sellers. So it's kind of reduced the aftermarket trading in the new issues, which is kind of unusual. You usually see that happen when there's a dearth of paper, not because there's too much. Usually, it's the other way around."

He said that with so much of the market's focus on the new deals, "it's harder to trade the secondary market when there's so many new issues coming. It was harder to do it when the issuance was lower than it is now, and it's truly taken up everyone's attention, unless you've got news, like a NewPage."

NewPage stuck at lower levels

A trader said that NewPage Corp.'s bonds were "a little lower," seeing the Miamisburg, Ohio-based coated-paper manufacturing company's 10% second-lien senior secured notes due 2010 go down to a 38-40 context, "but then they ticked up a little bit" in order to end around a 40-41 level.

He saw bonds trading around 383/4-39 before coming off such lows near the end of the day. He saw "decent-size trading in the issue."

At another desk, meanwhile, the NewPage bonds were quoted going home at 42¼ bid, up more than 2 points on the session.

As for NewPage's 11 3/8% first-lien senior secured notes due 2014, he first trader said that those bonds "had a decent amount of trading too" and were right around the 951/2-96½ range near where they had traded on Monday for most of Tuesday's session. While the bonds did trade as low as 95, he said that was "just small pieces" - the big pieces were 951/2-96½ and were ending closer to 96, about unchanged on the day.

NewPage bonds, particularly the 10% notes, have fallen over the last few days after the company churned out what analysts called disappointing first-quarter results last week, and investors are worried that a failure to repay or refinance those bonds by a covenant deadline next January would in turn cause the acceleration of the maturity of the considerably larger ($1.6 billion) 11 3/8% notes to a year from now instead of the end of 2014.

NewPage sector peer Catalyst Paper Corp.'s 7 3/8% notes due 2014 were hanging around a 59-61 context, which he said was about where the Richmond, B.C.-based papermaker's bonds had been trading. "They were unchanged, with not much volume," he said.

The Catalyst bonds had declined over several days from recent levels in the middle 60s, in line with the fall in NewPage's paper.

Market indicators seen easier

Overall, away from the new issues, statistical measures of market performance eased on Tuesday.

A trader saw the CDX North American Series 16 High Yield index down one-quarter point on the day on Tuesday for a second consecutive session, ending at 102 5/16 bid, 102 7/16 offered.

The KDP High Yield Daily index was meantime down by 7 bps on Tuesday to end at 76.18 after having been unchanged on Monday. Its yield rose by 2 bps for a second straight session, to 6.43%.

And the Merrill Lynch High Yield Master II index fell by 0.01% on Tuesday, its first loss after two sessions of advance, including the 0.109% gain seen on Monday. That left its year-to-date return at 6.038% on Tuesday, down from 6.048% at the close Monday, its peak level for 2011 so far.

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