Georgia Gulf, Goodman, DuPont Fabros deals price; Clear Channel offering, current bonds rise

By Paul Deckelman and Paul Harris

New York, Dec. 11 - Georgia Gulf Corp., DuPont Fabros Technology, LP, Goodman Global Group Inc. and Calfrac Holdings LP brought new bond issues to market on Friday, topping off a week which saw some $6 billion of new dollar-denominated paper price in the domestic junk bond market. This was on top of additional euro- and sterling-denominated issuance during the week - such as Friday's offering from British energy company Infinis plc - as well as some debt with both emerging market and mainstream high yield appeal.

Traders took particular note of the Goodman Global deal, pointing out that the Houston-based HVAC equipment manufacturer's offering of five-year senior discount notes - pricing at a heavily discounted 54.607 cents on the dollar - was likely the first bond deal structured that way within recent memory, perhaps even within several years.

Unusual structure or not, the Goodman deal was seen to have moved up solidly when it was freed for trading, rising along with the day's other new issues as well as with previously priced bonds such as Thursday's well-received offering from American Axle & Manufacturing Inc. and another Thursday issue, for Bumble Bee Foods LLC/Connors Bros. Cloverleaf Seafoods Co./Bumble Bee Capital Corp.

Even with all of the pricings which took place during the week, the new-deal calendar remains heavy heading into the final full trading week of 2009, widely considered to be the last week in which anything serious will get done. Some $5.41 billion and €370 million is being marketed, including a $1.35 billion offering for Expro Finance Luxembourg SCA; syndicate sources heard price talk Friday on the British oilfield services company's mega-deal.

The figures also include Junkbondland's newest prospective deal - a long-rumored $750 million offering from Clear Channel Communications Inc. The San Antonio, Tex.-based broadcaster and outdoor advertising company's existing bonds were seen by traders to have risen smartly on news of the upcoming bond deal.

Away from recently priced paper, or bonds from companies shopping new deals, like Clear Channel, participants described secondary dealings as dull, although there continued to be good interest in the new bonds of CIT Group Inc., issued when the commercial lender emerged from Chapter 11 this week.

DuPont Fabros below talk

The Friday primary market session saw half a dozen issuers, each packing single tranches, combine to price face amounts of $1.42 billion, €575 million and £275 million.

DuPont Fabros Technology priced a $550 million issue of senior notes (Ba2/BB-) at par to yield 8½%, on Friday.

The notes priced richer than price talk of 8¾%, plus or minus 12.5 basis points.

The notes have a final maturity of Dec. 15, 2017. However, $125 million become due on Dec. 15, 2015, and another $125 million on Dec. 15, 2016, with the final $300 million due at final maturity.

Jefferies & Co. Inc., Barclays Capital Inc. and Macquarie Capital Advisors were joint bookrunners.

Proceeds from the bond offering will be used to repay secured bank debt and for working capital, including project completion costs.

Georgia Gulf brings $500 million

Georgia Gulf priced a $500 million issue of 9% seven-year senior secured first-lien notes (B3/B) at 99.346 to yield 9 1/8%.

The yield printed in the middle of the 9% to 9¼% yield talk. The issue price came rich to discount talk of 1 to 2 points.

J.P. Morgan Securities Inc. was the bookrunner for the debt refinancing.

Goodman Global sells discount notes

Meanwhile Goodman Global Group raised approximately $320 million via the sale of its five-year senior discount notes (B3/B-).

The notes priced with an 11½% accretion rate, a 12.481% yield to maturity, and came at an issue price of 54.607.

The accretion rate came on top of rate talk. The yield printed tight to the 12½% area yield talk. The discount came in line with the 54.30 to 54.90 price talk.

J.P. Morgan Securities Inc. ran the books for the dividend deal from the Houston-based manufacturer of HVAC products.

Calfrac at the tight end

Calfrac Holdings priced a $100 million issue of 7¾% senior mirror notes due Feb. 15, 2015 (B2/B+) at 94.50 to yield 9.104%.

The yield printed toward the tight end of the 9% to 9¼% price talk.

RBC Capital Markets Corp. was the lead bookrunner for the debt refinancing. Bank of America Merrill Lynch was the joint bookrunner.

Rexel upsizes

Rexel priced an upsized €575 million issue seven-year senior unsecured notes (B1/B+/BB-) at par to yield 8¼%.

The yield printed on top of price talk.

Calyon Securities, RBS Securities Inc. and Bank of America Merrill Lynch were global coordinators and bookrunners for the issue which was upsized from €500 million.

Proceeds will be used to refinance existing debt.

Rexel is a Paris-based manufacturer of low-voltage electrical products.

Infinis tight to talk

Finally, Infinis priced a £275 million issue of five-year senior notes (B1/B+) at par to yield 9 1/8%.

The yield printed at the tight end of the 9¼% area price talk.

Deutsche Bank Securities and JPMorgan are joint bookrunners.

Proceeds will be used to refinance debt, to fund shareholder loans and for general corporate purposes.

Infinis is a Northampton, England-based renewable energy generating company.

Clear Channel plans $750 million

Looking ahead to the Dec. 14 week, which, sources say, is likely to bring the 2009 primary market to a close, two deals joined an already busy forward calendar.

Clear Channel Worldwide Holdings Inc. plans to price $750 million of senior notes due 2017 early next week.

The deal will be comprised of $600 million of series A notes and $150 million of series B notes.

Goldman Sachs & Co., Citigroup, Credit Suisse, Deutsche Bank Securities and Morgan Stanley are joint bookrunners.

Proceeds will be loaned to Clear Channel Outdoor Holdings Inc., which will use them to repay debt owed to Clear Channel Communications.

Expro sets talk

Meanwhile Expro Finance Luxembourg set price talk for its $1.35 billion offering of seven-year senior secured notes on Friday.

The deal is expected to price early in the week ahead.

It is being brought to market via bookrunners Goldman Sachs & Co. and Deutsche Bank Securities, Inc.

Proceeds to repay its existing senior secured term loans.

Fourth quarter 2009, a good time to come

Apart from Clear Channel and Expro, the forward calendar for what is expected to be the final week of business for 2009, features more than $5.4 billion of expected issuance.

"Dealers are cutting their fees ahead of year-end in order to get league table credit," a syndicate banker conceded.

"So from the issuer's perspective it's a good time to come."

On the other hand, the crowded calendar is pushing out the yields on the deals from lesser known entities that are tougher to get done because investors are not taking the time to take hard looks at them, the syndicate source qualified.

"When you have deals in the market such as Clear Channel, where everybody on the buy-side has a model set up already, it's much easier to get up to speed.

"And because of the size people are reasonably certain of getting decent allocations.

"But it's very difficult to get people to pay attention to the smaller deals.

"The accounts have already had great years, in terms of returns. And they don't want to risk some of this stuff going down."

DuPont Fabros has fabulous initial break

When the new DuPont Fabros Technology 8½% notes due 2017 were freed for secondary dealings, a trader saw the Washington, D.C.-based data center operator's freshly minted paper "run up to a 102 bid" from the par level at which the $550 million issue had priced earlier.

After that initial surge, he said the bonds "got whacked down a little bit," and "faded all the way down" to 100¾ bid, 101¼ offered. They later came off that interim low to finish around a still-respectable 101¼ bid, 101¾ offered.

At another desk, a trader quoted the bonds at a somewhat wider 101 bid, 102 offered level.

Georgia Gulf jumps

A trader saw Georgia Gulf Corp.'s 9% senior secured first-lien notes due 2017 having pushed as high as 101 bid on the break.

That was well up from 99.346, where the Atlanta-based chemical company had priced its $500 million offering earlier in the day.

A second trader said he had not seen any trace of the Georgia Gulf bonds, which priced fairly late in the session.

A blast from the past

A trader saw Goodman Global Group's new 11½% senior discount notes due 2014 having risen to 56¼ bid, 56 5/8 offered, a goodly rise from the 54.607 level at which the $586 million issue of bonds - which will yield $320 million of proceeds - priced to yield 12.481%.

He noted the fact that the company chose to structure its offering as a senior discount note - an instrument which was quite popular among junk bond issuers during the heady boom years earlier in the decade, but which faded in popularity almost all the way to extinction over the last year or so, as nervous investors looking to hunker down and avoid risk shunned such unusual structures. But with the junk market about to cap off a roaring rally for the year and a dramatic rebound in primary issuance versus last year's sorry showing, oddly structured bonds that might seem to be throwbacks to a more freewheeling era, such as a discount bond or a PIK note, seem to be making a cautious, comeback, albeit minor.

He quipped "it feels like we're back in '07," - before the bottom began falling out of the financial world, although few noticed it at the time.

Another trader also saw the new Goodman Global paper having moved up from its issue price, quoting it at 56¼ bid, 56¾ offered.

The new Calfrac Holdings 7¾% notes due 2015 were not seen in secondary dealings.

American Axle holds gains

A trader saw American Axle's 9¼% senior secured notes due 2017 at 101¼ bid. 101¾ offered, but he noted that unlike Thursday - when the bonds priced and then moved smartly higher in busy aftermarket trading - Friday's activity was "very quiet."

Another trader saw those bonds at 101 bid, 102 offered.

The Detroit-based drive train components manufacturer priced $425 million of the bonds - upsized from the originally announced $400 million - on Thursday at 98.715 to yield 9½%. The new bonds had begun moving upward as soon as they were freed, eventually rising to 101¼ bid, 101 5/8 offered.

Bumble Bee stays better

Traders saw the new Bumble Bee 7¾% senior secured notes due 2015 continuing to trade above the 98.823 level at which the century-old San Diego-based canned seafood company had priced its $220 million issue on Thursday to yield 8%. One trader quoted the bonds at 99¾ bid, par offered, while a second located them at 99 5/8 bid, 100 1/8 offered.

Other new deals slightly firmer

A trader said that National Money Mart Co. (Dollar Financial Corp.)'s 10 3/8% notes due 2016 were at 101¼ bid, 101 3/8 offered, up from the 99.398 level at which the financial services provider's $600 million issue - massively upsized from the originally announced $350 million - had priced on Thursday to yield 10½%.

Wind Acquisition Holdings Finance SA's new 12¼% senior PIK notes 2017 traded at 99 bid, par offered, up from 98.325, where the Italian telecommunications company had priced its dollar-denominated $625 million and its euro-denominated €325 million bonds. Primus Telecommunications Holding Inc.'s $130 million of 13% units due 2016 - consisting of a mixture for the U.S.-based parent company's senior secured notes and those of its Canadian subsidiary - were quoted at 98¾ bid, 99½ offered, up from its 98.51 at pricing to yield 13.333%. Ford Motor Credit Co. - whose $750 million of 8 1/8% notes due 2020 priced on Monday at 98.304 to yield 8 3/8 but then struggled to stay above their issue price - ended the week on a more positive note, having risen above issue at mid-week and then stayed up there, going out on Friday at 98½ bid, 99 offered.

Clear Channel climbs on new deal news

A trader said that Clear Channel Communications Inc.'s bonds were "active today, they moved up" in the wake of the Texas-based diversified media company's planned $750 million bond offering.

He said its 10¾% notes due 2016 "had really good volume," seeing them up around 72-721/2, which he called a 4 or 5 point gain. The issue, he said, was among the most active junk bond issues in an otherwise fairly dull session.

Clear Channel's 11% notes due 2016 "were pretty active as well," ending around 63 ½ bid, 64 offered, which he termed about a 3 point rise.

A market source at another desk saw the Clear Channel paper dominating the actives list, with several issues up multiple points. He pegged the 103/4s up nearly 6 points on the day at 72 bid, while the 11s were more than 3 points ahead at 63. Clear Channel's 5½% notes due 2014 finished the day at 60 bid, a nearly 3 point gain, also on busy trading

Market indicators stay strong

Among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index up ¼ point on Friday at 95 7/8 bid, 96 3/8 offered, after having been up 3/8 point on Thursday. The index thus moved by more than a point from its level of 94¾ bid, 95¼ offered at the close on the previous Friday, Dec. 4.

The KDP High Yield Daily Index meanwhile rose by 9 bps on Friday to 70.49, after having gained 6 bps on Thursday. Its yield tightened by 3 bps, to 8.33%, after having widened by 1 bp the previous session.

In the broader market, advancing issues again led decliners on Friday, for a ninth straight session, by a seven-to-five margin.

Overall market activity, as measured by dollar-volume, fell 15% from Thursday's pace.

A trader described Friday's session as "pretty quiet" and not unusual for a chilly December Friday which no doubt saw some market participants make an early exit in hopes of avoiding bone-chilling nighttime temperatures and New York-area windchills half of the nominal temperature readings, while others headed early to celebrate the start of the eight-day Chanukah holiday.

A trader said that "it was mostly a new-issue focus," with the secondary market clearly taking a back seat to the flood of new paper. He said that "with no secondary supply, a lot of things just came bid up with lack of supply and lack of volume."

He dismissed most of the day's secondary dealings, saying it "just kind of feels a little bit like some year-end window dressing."

CIT seen still busy

Among specific issues, a trader said that CIT Group was "still an active mover," a day after the New York-based commercial lender emerged from Chapter 11 and its two series of new bonds - five issues of 7% notes with maturities ranging from May 2013 to May 2017 and five issues of 10¼% notes with those same maturities - began trading around.

He saw the 7% notes due 2013 at 93½ bid, the 2014s at 91, the '15s at 90, the '16s at 87½ and the 17s at that same 87½ level.

He said there was "good volume on all of them," - but the 2016 and 2017 notes "had the really big volumes."

He said he "saw the 10¼% notes on screens," but said those bonds - which trade at a premium to par - "don't trade as much" as the 7s. "The volume was okay, there were some trades, but not much."

He said that 2013 bonds were trading at 102, and "all of the others" were "in a pretty tight range" from 101¾ for the 2014 notes down to 101¼ for the 2017s. "Between 101 and 102 is where all of them are."

Trucker's bonds trade lower

A trader said that said YRC Worldwide Inc.'s 8½% notes due 2010 were trading around a 63-65 context Friday and were closing around 631/2, down a little from the 64 bid, 64½ offered level seen on Thursday, when the bonds rose about 5 points on the news that the Overland, Park., Kan.-based trucking line operator had extended the expiration deadline on its pending debt-for-equity exchange offer until 11:59 p.m. ET next Tuesday.

YRC needs to get the support of 95% of the holders of those U.S. Freightways 8½% bonds and several convertible debt issues due in 2023 - but as of Wednesday, when it announced the extension in the offer it had only gotten approval from 72% of those debtholders.

Market watches Dubai developments

A trader said that Dubai development company Nakheel PJSC's 3.172% sukuk notes slated to come due on Monday were at 53 bid, while its floating rate notes due 2010 were at 30-33 and its 2¾% notes due 2011 at 36-39.

"It looks lower," he said, versus the 54 bid, 57 offered context to which the Dec. 14 bonds rose on Thursday, their biggest gain in nine months. He saw the floaters about unchanged, and the 23/4s off from the 39-44 area at which they traded on Thursday.

At another desk, the 53 level was seen "a little higher" from around a 51 level on Thursday, while the other two issues were essentially unchanged.

The bonds were seen remaining above their recent lows, which included levels in the mid-to-high 40s for the Dec. 14 bond, amid news reports that the developer - a unit of the state-run Dubai World conglomerate - may seek to avoid a default on the $3.52 billion Dec. 14 issue. Among the ideas reportedly being bandied about in talks between Dubai World and its banks is paying the bondholders about 70 cents on the dollar for their paper, and then issuing new securities to cover the unpaid portion of the debt.

Smurfit-Stone strengthens

A trader saw Smurfit-Stone Container Corp.'s bonds quoted in the high 80s, with "some" activity. The 8 3/8% notes due 2012 were at 87-88, on "small volume," while the company's Jefferson Smurfit 8¼% notes due 2012 had "a lot more volume," also at that 87-88 level, although the bonds did trade as high as 88-89, "and they really traded on both side of that today."

Another market source quoted the Chicago-based packaging company's 7½% notes due 2013 up some 3 points at 88.5 bid.

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