DISH upsizes, stagnant in secondary; Thompson Creek prices, gains; Ruby Tuesday trades off

By Paul Deckelman and Paul A. Harris

New York, May 8 - DISH Network Corp. and DISH DBS Corp., after failing to price their giant-sized, two-part bond deal during Monday's session, finally managed to do so early Tuesday. Traders said that the satellite broadcasting company's upsized $1.9 billion offering gained no altitude when it was freed for secondary market dealings, instead trading around or slightly below the two tranches' respective par issue price on less-than-expected volume.

The company's existing bonds, which lost ground on Monday on news of the upcoming big deal, were lower for a second straight session.

The day's other pricing, a $200 million deal from mining operator Thompson Creek Metals Co. Inc., was heard to have firmed when the seven-year issue hit the aftermarket.

That was definitely not the case with Ruby Tuesday, Inc.'s new bonds, the only offering to price on Monday. Tuesday traders saw the restaurant operator's $250 million of eight-year paper trading below its issue price.

High-yield syndicate sources heard price talk on travel agency Carlson Wagonlit BV's $850 million-equivalent dollar- and euro-denominated seven-year deal, which is expected to price on Wednesday.

Talk was also out on offshore oil services company OPI International's upsized five-year secured offering, which could price this week.

Two other deals surfaced, though timing on both is still nebulous: building products maker Roofing Supply Group LLC's $200 million of eight-year notes and electric generator manufacturer Generac Power Systems Inc.'s roughly $400 million of unsecured debt, presumably bonds. Both companies are also doing bank financing as well.

Away from the new deals, Ally Financial Inc.'s bonds firmed for a second straight session, helped by news that the Treasury - Ally's 74% owner - will likely okay a bankruptcy filing by the automotive lender's troubled Residential Capital LLC mortgage lending unit.

Thompson Creek prices

The news volume steadied on Tuesday following the burst of new deals added to the active forward calendar on Monday.

Only one deal priced.

Thompson Creek Metals brought a $200 million issue of seven-year senior notes (Caa2/CCC+) at par to yield 12½%.

The yield printed 12.5 basis points beyond the wide end of price talk that had been set in the 12% area.

J.P. Morgan, Deutsche Bank and RBC were the joint bookrunners.

Proceeds will be used to fund construction of the Mt. Millgan copper-gold mine and for working capital.

Although it came with a Monday trade date, the market did not learn about the massively upsized DISH deal until Tuesday morning.

DISH DBS, a subsidiary of DISH Network, priced an upsized $1.9 billion two-part senior notes transaction (Ba2/BB-) late Monday.

The deal, which came in two bullet tranches, featured $900 million of five-year notes priced at par to yield 4 5/8%. The yield printed at the tight end of yield talk set in the 4¾% area.

In addition, DISH priced a $1 billion tranche of 10-year notes at par to yield 5 7/8%, at the wide end of 5¾% to 5 7/8% yield talk.

Deutsche Bank ran the books for the general corporate purposes deal, the overall size of which was increased from $1.5 billion.

Talking the deals

Carlson Wagonlit set price talk for its $850 million-equivalent offering of seven-year senior secured notes (B1/B+).

A €275 million tranche of the notes is talked to price with a yield in the 7 5/8% area.

The remainder of the issue will come in dollar-denominated notes, which are talked with a yield in the 7% area.

The deal is set to price on Wednesday.

J.P. Morgan is the left bookrunner. BNP, Lloyds and Morgan Stanley are the joint bookrunners.

Elsewhere, OPI International upsized its offering of first-lien senior secured notes to $155 million from $125 million.

The bonds are talked with a yield in the 13% area with warrants for 17% of the company.

The deal could price before the end of the week.

Global Hunter Securities is the bookrunner.

DISH deal little moved

When DISH Network's new bonds moved into the aftermarket, traders saw the Englewood, Colo.-based satellite broadcaster's paper anchored in a narrow orbit at or just below the par level at which both tranches of the upsized $1.9 billion deal had priced.

A trader noted that the two-part megadeal, which had been expected by some market participants to price on Monday - just hours after being announced - "came first thing in the morning" on Tuesday.

But after the $900 million of five-year notes and $1 billion of 10-year paper each priced at par, he saw both tranches "pretty much" holding steady in a 993/4-par context, "both issues right inside there."

While he saw some dealings in the DISH paper "first thing this morning, then it just kind of died out as the day went on. It priced at par, so it really wasn't that busy."

He added: "If a thing is not trading up, there tends to be less activity."

A second trader pegged DISH's bonds as "trading right around par for most of the day," though later in the session, he saw the 5 7/8% notes due 2022 trading at bid levels as low as 99¾ to 99 7/8, with the 4 5/8% notes due 2017 in a 99 5/8 to 99¾ bid context.

"They kind of faded, in terms of activity level, during the day," he said.

Considering that the quick-to-market $1.9 billion deal - upsized from an originally announced $1.5 billion - was the first megadeal-sized offering seen in a week, the trader expressed some surprise that there was not more action in DISH.

"It didn't seem to me that there was as much activity as I would have expected for the size of that deal - at least not what I was seeing.

Another trader flatly declared, "[DISH] didn't do so well; the bonds are actually closing lower than issue."

He saw the 10-year piece at 99¾ bid, par offered, while the five-year notes were at 99 5/8 bid, 99 7/8 offered.

Existing DISH down again

For a second consecutive session, DISH's existing bonds were seen lower, maintaining the downside momentum seen on Monday, when they fell by about a point across the board after the company announced plans for its big new bond deal.

A trader said that the existing 7 1/8% notes due 2016 traded down to 109¾ bid on Tuesday. He said that on Monday, the bonds had fallen to 1101/2, while a week ago, they were above 111, "so that's a little lower."

A market source at another shop also said that those 2016 notes were down by about three-quarters of a point on the day at 1093/4, on volume of more than $16 million, making that one of the busiest issues of the day in Junkbondland.

Dish's 6¾% notes due 2021 were even bigger losers, dropping by 1 7/8 points to 107 3/8 bid. More than $10 million of those bonds changed hands.

Thompson Creek trades up

But if DISH was fizzling, the day's other new deal was sizzling, at least price-wise.

A trader saw Thompson Creek Metals' $200 million offering of seven-year paper trading in the afternoon at 101 bid, 102 offered, versus the par level at which the Denver-based molybdenum, gold and copper mining concern's quickly shopped deal had priced.

Another trader saw the bonds opening in a 100½ to 101½ context, then "they ended up trading somewhere in the middle."

Given the relatively small size of the deal, he said that there was "not a lot of activity in that one."

At another shop, a trader quoted them at 101¼ bid, 102¼ offered.

Ruby Tuesday retreats

A trader noted, tongue planted firmly in cheek, that "they priced Ruby Tuesday on a Monday. I was a little shocked - I thought they would have waited till Tuesday."

Perhaps there genuinely was some confusion on the part of investors about what day it was, but the fact is, he said, the Maryville. Tenn.-based casual dining restaurant chain operator's $250 million of 7 5/8% notes due 2020 was not exactly the special of the day on most junk investors' menus.

After pricing at 98.536 to yield 7 7/8% late in the day on Monday - too late for any aftermarket activity at that time - the bonds traded lower when they were freed to trade on Tuesday.

The trader quoted them going home at 97¾ bid, 98¼ offered, well down from their issue price.

"Early this morning, they were 98 to 981/2, then they just drifted lower," he said.

"Maybe there's still a 98 bid out there, but I'm seeing them offered at 981/4."

A second trader said that after coming "around 981/2ish," the restaurateur's bonds actually firmed a little initially, moving up to 98¾ bid. But after players hit that bid, he said, they were trading right around issue, and then they kept going lower."

He finally quoted them as far down as 97¼ bid, 98 offered.

Yet another trader said that Ruby Tuesday was "relatively quiet, trading right around issue. There was not much going on there."

Junk eases a little

Away from the new-deal arena, traders saw the junk market slightly lower, with one trader estimating that bonds were off by around a quarter-point, while a second said that, in general, things were "down slightly."

He compared the activity level of the junk market to "watching paint dry."

The first trader said that although the various indexes looked to be down a quarter-point, junk "hung in," largely unaffected by a sharply negative stock market that was seen for most of the day, although equities did stage a late rally to cut their losses.

Stocks were hurt for a second straight session by renewed investor worry that the fragile deal to address Europe's debt problem that had been painfully hammered out over the last few months by various central bankers, finance ministers and other leaders might unravel in the wake of clear anti-austerity votes over the weekend in Greece and France.

The bellwether Dow Jones Industrial Average, though off its lows, still dipped below the psychologically potent 13,000 mark for the first time since April 23, ending down 76.44 points, or 0.59%, at 12,932.09. The broader Standard & Poor's 500 and Nasdaq Composite indexes were also moderately lower.

Market measures ease off

Back in the junk world, statistical measures of market performance were lower Tuesday, after four straight sessions during which they had been mixed.

A trader saw the Markit Group CDX North American Series 18 High Yield Index off for a fourth straight day, losing a quarter-point for a second time in a row to end Tuesday at 95½ bid, 95¾ offered.

The KDP High Yield Daily Index, meanwhile, lost 7 basis points on Tuesday to finish at 74.13, after having eased by 2 bps on Monday. Its yield rose by 3 bps, to 6.42%, after having come in by 2 bps on Monday.

And even the widely followed Merrill Lynch U.S. High Yield Master II Index could not avoid the overall negative tone. Its upside streak of 10 consecutive sessions, dating back to April 24, was snapped on Tuesday, though just barely, as it posed a 0.004% loss, versus Monday's 0.016% advance.

That slight loss left its year-to-date return at 6.795%, down from Monday's 6.80%, the peak level for 2012 so far.

Ally improves again

Among specific names, a trader said that "financials had a good day," estimating the names up a half-point to a full point.

He said that Evansville, Ind.-based consumer lender Springleaf Financial's 6.90% notes went home at 83 bid, 84 offered, while Ally Financial's benchmark 8% notes due 2031 were about a point better, at 118 bid, 119 offered.

He allowed that the Detroit-based automotive and mortgage lender and online bank operator's paper was probably helped by Monday's news reports indicating that Ally - 74% owned by the U.S. Treasury following the huge investment Washington made in the company during the 2008 financial crunch - would probably get a green light from the government should it decide to put its Residential Capital LLC mortgage lending unit into bankruptcy to reorganize the money-losing Minneapolis company's tangled finances.

A second trader pegged the 8s at 119 bid, contrasting it with levels between 117 and 118 on Monday, when the ResCap story first broke and levels as low as 116½ bid on Friday, "so they have been moving up nicely."

Another market source estimated the bonds up as much as 2¾ points, at 118½ bid.

Patriot Coal pops

Away from the financials, a trader said that Patriot Coal Corp.'s 8¼% notes due 2018 were solidly better on the news that the St. Louis-based coal operator plans a $625 million senior secured credit facility.

The bonds were up more than 1¾ points on the session, closing at 76¼ bid.

Over $20 million of that paper changed hands on Tuesday, pushing it far up on the junk market's most-actives list.

Another market source located the bonds at 77½ bid, going out, but only called that a 1-point gain.

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