Expro, Viskase price, more on tap; Clear Channel bonds rise ahead of deal; XTO boosts energy

By Paul Deckelman and Paul Harris

New York, Dec. 14 - Expro Finance Luxembourg SCA and Viskase Cos. Inc. priced upsized bond offerings on Monday to kick off the last full trading week of 2009 - as holiday schedules will dominate the final two weeks of the year.

U.K.-based oilfield services operator Expro's mega-deal was seen by traders to have moved up by more than 2 points from its 96 area pricing level when it was freed for secondary dealings, but they saw no aftermarket action in Viskase.

Primaryside players were meantime bracing themselves for what is expected to be a new-deal whirlwind for the rest of the week, with some $3.7 billion and €370 million of paper still sitting on the calendar, waiting to price. Edgen Murray Corp. is considered likely to come to market on Tuesday, with Aquilex Holding seen possible either Tuesday or Wednesday, while roadshows for McJunkin Red Man Corp., Novasep Holdings SAS and United Maritime Group LLC are slated to wrap up Tuesday, making one or more pricings from that group possible as well.

And Clear Channel Worldwide Holdings Inc.'s much-anticipated $750 million offering of senior notes due 2017 is also looming as a possible candidate for pricing on Tuesday or Wednesday. Meanwhile, the San Antonio, Tex.-based diversified media company's existing bonds moved up smartly for a second consecutive session on Monday, propelled by investor interest in the upcoming bond deal.

Away from issues connected with coming new deals, traders saw interest in oil and gas names such as Chesapeake Energy Corp., on renewed speculation of possible further energy-sector consolidation in the wake of Monday's announcement of the big acquisition deal involving ExxonMobil Corp. and XTO Energy Inc.

Expro sells $1.4 billion

Two deals cleared the market during the Monday session.

Expro Finance Luxembourg SCA priced an upsized $1.4 billion issue of 8½% seven-year senior secured notes (B1/B+) at 96.207 to yield 9¼%.

The yield printed on top of yield talk. The issue price came in line with the approximately 4 points of discount talk. The amount was increased from $1.35 billion.

Goldman Sachs & Co. and Deutsche Bank Securities, Inc. were joint bookrunners.

The company - a unit of Reading, England-based oilfield services provider Expro International Group Ltd. - will use the proceeds to repay its senior secured term loans.

Viskase upsizes

Meanwhile, Viskase Cos., Inc. priced an upsized $175 million issue of 9 7/8% eight-year senior secured notes (B2/B-) at 99.305 to yield 10%.

The yield printed on top of the yield talk. The issue price came in line with the 0.5 to 1 point of discount talk. The deal was increased from $160 million originally.

Jefferies & Co. ran the books.

Viskase, a Chicago-based maker of non-edible cellulose, fibrous and plastic casings used in the meat packing industry for processed meat and poultry products such as sausages, hotdogs and cold cuts, plans to use the proceeds to repay substantially all of its existing debt, including its $90 million of outstanding 11½% senior secured notes due 2011, and for general corporate purposes.

Expro excels in secondary, but Viskase vanishes

A trader saw Expro Finance's new 8½% senior secured seven-year notes get as good as 98.9 in the brokers' market, and later saw them trading at 98¼ bid, 98¾ offered. That was well up from the 96.207 level at which the Reading, U.K.-based oilfield services concern priced its deal.

At another shop, a trader quoted the Expro bonds as having broken at 98½ bid, "and then that bid disappeared." He said the only other trade he was as "a small piece" at 983/4, without a bid.

Commenting on the seeming lack of investor interest, given its great size and liquidity as well as the fact that energy names across the board got a boost from news of the XTO acquisition, he said "this could be one of things where tomorrow morning we come in and it's the Number-one trading issue. You just never know." He added that "there have been a few of these issues where it wasn't until the next day that we really saw volume pick up.

Several traders meantime reported seeing no traces of the new Viskase 9 7/8% senior secured notes due 2018.

Goodman still doing pretty good

A trader said that Goodman Global Group Inc.'s new 11½% senior discount notes due 2014 continued to quietly push up after having priced at a heavily discounted 54.607 on Friday to yield 12.481%.

The Houston-based HVAC equipment maker's $586 million issue, which yielded $320 million proceeds, opened at 56¼ bid, 57 offered, and was seen later on having firmed to 57 bid.

Clear Channel climb continues ahead of deal

A trader said that Clear Channel Communications Inc.'s bonds "had a lot of activity," rising for a second straight session on the news - long rumored but formally announced on Friday, that the broadcasting and outdoor advertising company will bring a $750 million issue of senior notes due 2017 to market, probably in the first part of this week.

He said the 10¾% notes due 2016 were at 76 bid, 77 offered, which he called up 4 or 5 points on "a lot of volume." He saw "a couple of pages of trades" on the Trace system, "so you could definitely say it was active trading."

He saw its 11% notes due 2016 at 66 bid, 67 offered, which he called up "3-and-change" points. The 5½% notes due 2016 were "up a couple" of points at 531/2, but he said there was "not a real lot of volume," but qualified that, saying they had "decent volume" of about $10 million.

Another trader said about $16 million of the 103/4s traded at 75½ bid, 77½ offered level, after having struggled along at 73-75½ earlier.

The 5½% notes due 2014 were meantime at 63 bid, 64 offered, up from 60-61 on Friday, although the trader only saw "just a couple of million bonds traded - it was nothing huge." But he saw the 11% notes as the clear volume leader, with some $30 million having traded up around a 68-69 context from 65 bid, 65½ offered early in the morning.

Across the capital structure, he said, "it was pretty consistent - they were up 2 or 3 points."

A market source at another desk saw the 11s even better, up nearly 6 points on the session to just above the 69 bid mark, on brisk trading.

Cascades bonds better

Among other recent new deals, a trader saw the Canadian forest products company Cascades Inc.'s 7 7/8% notes due 2020 at 101 bid, 101½ offered, up from 98.293, the point at which the $250 million priced to yield 8 1/8%, "so everything is just up. It [the market] feels so fundamentally strong right now."

Recent Navistar still a star

A trader said that "another name that continues strong, every day, is Navistar" [International Corp.], which priced a $1 billion issue of 8¼% 12-year senior notes on Oct. 22 at 96.328 to yield 8¾%.

He saw the bonds at 100½ bid, 100 7/8, calling them up by "another ½ to 3/4."

Market indicators point northward

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index up ¾ point on Monday, at 97¼ bid, 97¾ offered, after having been up ¼ point on Friday.

The KDP High Yield Daily Index meanwhile rose by 16 basis points on Monday to 70.65, after having gained 9 bps on Friday. Its yield tightened by 6 bps to 8.27%, after having narrowed by 3 bps the previous session.

In the broader market, advancing issues again led decliners on Monday for a 10th straight session, by a nearly eight-to-five margin.

Overall market activity, as measured by dollar-volume, fell 19% from Friday's pace.

A trader declared that "it sounds like everybody wants to buy everything in sight here.

"Buyers want to put money to work." The market, he said, "is on a roll," with even less prominent issues getting a piece of the action.

Telcor trades up

For instance, he saw Telcor Inc.'s 10% notes trading around 88 following Friday's release of quarterly earnings by the Lincoln, Neb.-based medical software products company - while prior to the numbers, he said "you couldn't give 'em away" as they languished at around 82 bid, 83 offered. He further noted that the bonds traded up even though the earnings "were so-so, not great."

He also saw the company's floating-rate notes having moved up to the lower 90s from prior levels, before the numbers, of 84-86.

He said that sharp gain "is the kind of stuff that's going on in the market place.

He added that "even this company [only] has to show a couple more quarters, and they'll get refinanced. It seems like everybody and his brother who wants to refinance can do it," as long as the rates stay relatively low and the banks keep making the loans.

Another lesser-traded issuer seeing some appreciation, he said was Park-Ohio Holdings Corp., whose 8 3/8% notes due 2014 were up about ¾ point to a full point to 77 bid, after having previously been offered at 76.

Chesapeake gains on XTO news

Chesapeake Energy was seen moving upward, along with other energy names, on sector consolidation buzz generated in the wake of ExxonMobil's planned purchase of XTO Energy in a deal valued at some $40 billion, including the assumption of over $10 billion of XTO debt.

A source at an energy-oriented buyside shop opined that "most high yield energy bonds, including E&P [exploration and production] and oilfield service, are better bid by ½ to 1 point today [Monday], post-news." Another trader said "all the energy names are up. They took off like a bat out of hell."

Among them, he saw Chesapeake's bellwether 9½% notes due 2015 trading up to 108 1/8 bid, which he called up by 1 to 1½ points on the day.

A trader elsewhere saw Chesapeake's bonds higher - but on relatively limited dealings. Its 6 7/8% notes traded "a little wide" at 98 bid, par offered, but on volume of only about $3 million. Its 7 5/8% notes "may have gapped up" to around 104 bid versus 100½ late last week, "but just not on huge volume - just a couple of million [dollars] " at the 104 level.

ArvinMeritor advances

A trader said that ArvinMeritor Inc. "is a name that's really caught fire in the automotive sector," its 8 1/8% notes due 2015 having moved up to 95½ bid, 95¾ offered, while its 8¾% notes due 2012 had firmed to 101¼ bid.

CIT celebration continues

A trader said CIT Group Inc.'s new bonds were up about a point "across the board," after having risen Thursday and Friday after the New York-based commercial lender emerged from Chapter 11.

He saw the five issues of 7% notes due from 2013 to 2017 having risen to about 94½ bid for the 2013s, 92 for the 2014s, 91 for the 2015s, and the 2016 and 2017 bonds around 881/2.

He saw the five issues of the 10¼% bonds due from 2013 to 2017 ranging from 103½ for the 2013s down to 102 for the 2017s, versus the range between 101 and 102 seen on Friday. "There's not a whole lot of room in between them," he said but they're all in that range.

Nakheel rallies on rescue

Overseas, a trader said that Dubai property development company Nakheel PJSC's bonds zoomed on the news that Dubai's Persian Gulf neighbor, Abu Dhabi, is providing the embattled emirate with $10 billion, which will allow it to pay off the $3.52 billion of 3.172% sukuk bonds slated to come due during this session.

"They're getting paid off," he said of those bonds, "so now the other one are up 30 points," referring to the floating-rate notes due 2010 and the 2¾% notes due 2011, which he quoted in a 62-64 range.

A market source at another desk said those bonds got as good as 67½ -- well up from levels around 36-39 on Friday - while the 3.172s jumped from Friday's close at 53 to 109 on Monday - just a touch below where those bonds had been trading before Dubai announced to the world back on Nov. 25 that its state-run Dubai World development conglomerate, Nakheel's corporate parent, would ask its creditors for a standstill that would it allow it to delay repayment on a portion of its $59 billion of debt while it tried to restructure that debt. That sent the 3.172s eventually cascading down over several subsequent sessions as far as the 42 bid level, while the floaters and the 23/4s eventually plunged into the upper 20s from prior pre-news levels in the 80s.

The first trader said it was impossible to estimate the activity level in the bonds because "they're eurobonds, so they don't have to Trace, but I would think they did trade because they were quoted as being active."

He agreed with the general proposition that there's nothing like having a savior - in this case, Abu Dhabi - rising to the company's rescue, "as long as you weren't one of the guys who [went] short" on the paper.

Secondary is stilled

All told, a trader said that while the primary side of the market remains active, on the secondary, apart from new issues, "there are just not a lot of people reaching to do things.

"It seems like they're reading their Christmas cards now, after having had a very busy second half."

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