Royal Caribbean drive-by, three upsized deals price; Collins & Aikman bonds firm solidly

By Paul Deckelman and Paul A. Harris

New York, Nov. 18- Royal Caribbean Cruises Ltd. steamed in with a quickly shopped $350 million junk bond offering Tuesday, high yield syndicate sources said, while three scheduled deals - for Golden Nugget/Poster Financial Group Inc., General Cable Corp. and Equistar Chemicals LP - were heard to have been upsized at their pricing.

In the secondary market, Collins & Aikman Products Co. senior bonds were quoted about two points higher, apparently after an investment house put out positive research on the Troy, Mich.-based auto components supplier, and its subordinated bonds were heard up as much as four points on the session. Downsiders included Levi Strauss & Co. and Solutia Inc.

On the heels of Monday's session, which saw $445 million in dollar-denominated junk bonds price, Tuesday's session more than doubled that figure, with $1.04 billion of new notes sold in four offerings.

Three of those deals came upsized. One priced inside of talk, and another at the tight end of talk.

And of the four deals that went down on Tuesday, two were drive-bys.

"People are trying to get in before Thanksgiving," said one sell-side official on Monday afternoon.

"And if you are thinking about doing a roadshow and getting your deal done before Christmas, you better be headed for the starting line right about now," advised the sell-sider.

This official also said that the cash inflows to high yield mutual funds - which are said to be creating a windfall in terms of low interest rates for high-yield issuers - do not yet appear to be letting up.

"At this point I think cash will continue to come into the high yield," the source said.

"One indication is that money is leaving equities and coming into debt, in general."

Four issuers combined on Monday to take on just over a billion of new debt.

The biggest offering came from Royal Caribbean Cruises, which lowered the gangplank for investors during a Tuesday morning conference call, then sold $350 million of 10-year senior notes (Ba2/BB+) at par in the afternoon to yield 6 7/8%, in the middle of the 6¾%-7% price talk.

Citigroup, Credit Suisse First Boston, Goldman, Sachs & Co. and Morgan Stanley battened down the hatches for the Miami vacation cruise company's deal.

Also during the session General Cable priced an upsized $285 million of seven-year senior notes (B2/B) at par to yield 9½%. The deal was increased from $275 million. The Highland Heights, Ky. cable manufacturer's deal, led by Merrill Lynch & CO. and UBS Investment Bank, came inside of the 9¾% area price talk.

Also upsized was Equistar Chemicals' add-on to its 10 5/8% senior notes due May 1, 2011 (B2/BB-). The company, a Houston-based joint venture between Lyondell Chemical Co. and Millennium Chemicals Inc., sold $250 million at an issue price of 104.685, resulting in a 9½% yield. The deal was increased from $200 million. Price talk had been 104-105 on the deal led by JP Morgan, Citigroup, Banc of America Securities and Credit Suisse First Boston. The original $450 million issue priced at par on April 16.

And Poster Financial Group (Golden Nugget) priced an upsized $155 million of eight-year senior second lien notes (B2/B) at par to yield 8¾%, at the tight end of the 8¾%-9% talk, via Lehman Brothers. The deal was increased from $140 million.

Two European companies were heard to be on the road with junk bond deals.

The roadshow runs from Nov. 18-20 on Stena AB's offering of $150 million 10-year notes (Ba3/BB), which are expected to price this week. JP Morgan is the bookrunner on the Denmark-based ferry boat company's deal.

And Polish broadcaster TVN Finance Corp. reportedly started a roadshow on Monday for an offer of €235 million of 10-year senior notes (B-). Again, JP Morgan is the bookrunner on the acquisition financing which is expected to price shortly before Thanksgiving.

Among deals that have been making the rounds to the high yield accounts, price talk of 10%-10¼% was heard Tuesday on Nortek Holdings' $350 million of 7.5-year senior discount notes (Caa1/B-) that are expected to price Wednesday afternoon, via Deutsche Bank Securities.

Price talk of 7¾%-8% was heard on Millar Western Forest Products' $175 million of 10-year senior notes (B3/B+), which are expected to price midday Thursday via Goldman Sachs & Co.

And talk in the 9¾% area emerged Tuesday on Imax Corp.'s $160 million of seven-year senior notes (B3/B-), expected to price on Wednesday, with Credit Suisse First Boston running the books.

And Prospect News received word on Tuesday of two issuers said to be eyeing the market, with deals pending.

Atrium Cos., Inc. is expected to reopen its issue of 10½% senior subordinated notes due May 1, 2009, in order to price a $50 million add-on (B3). UBS Investment Bank will run the books for the deal from the Dallas-based window manufacturer.

And although firm details were lacking, Atlanta mattress-maker Simmons Co. is said to be headed to market with a junk deal via UBS Investment Bank and Deutsche Bank Securities, to help fund the company's acquisition by Thomas H. Lee Partners.

A source told Prospect News that the deal is expected to close before year-end.

When the new Equistar Chemicals 10 5/8% senior notes due 2011 were freed for secondary dealings, they settled in around 104.5 bid, 105.5 offered, versus their 104.685 issue price.

Back among the established issues, Collins & Aikman "really shot up like a bat out of hell," a trader said, suggesting that this followed an investment house other than his own having come out with a positive report on the company.

He saw Collins & Aikman's 11½% notes due 2006 firming to 82.5 bid from 80 previously; another trader saw them firming even more strongly, to 83.5 bid, well up from 79 bid, 82 offered on Monday.

"Wow," he said, after he looked up the issue, "that stuff is really moseying up, isn't it?"

He also saw the company's somewhat less volatile 10¾% notes due 2006 two points better at 90 bid, 92 offered, up from 88 bid, 90 offered.

Besides being buoyed by the positive words from the investment bank, Collins & Aikman was also apparently helped by continued investor reaction to last week's announcement of improved third-quarter results (the company's loss from continuing operations narrowed to of 38 cents per share versus a loss of 54 cents per share in the same period in 2002), as well as the positive vibe auto sector debt in general has been enjoying since last week, when sector bellwether - and Number-One corporate issuer - Ford Motor Co. shrugged off a downgrade by Standard & Poor's and its bonds tightened noticeably on its stable outlook.

Also in that sector, Tenneco Automotive Inc. bonds "looked a tad better," on news that the Lake Forest, Ill.-based auto parts maker would look to refinance its bank debt via J.P. Morgan and Co.

He said the company's 11 5/8% notes which had been offered at 104, closing out at 103.75 bid, 104.75 offered, while its 10¼% secured debt stood at 111.5 bid, 112.5 offered.

Another trader quoted the company's bonds up about a point to a point-and-a-half, at those levels.

A trader said that Greyhound Lines' 11½% notes had moved up to 81.5 bid, 82 offered from prior levels at 79, ahead of the release of earnings by the Dallas-based intercity bus operator and its corporate parent, Canadian transportation concern Laidlaw.

"It's an implied guarantee," he said of the relationship between the two companies. He said "the speculation is" that Laidlaw, which emerged from Chapter 11 earlier this year "is not gonna let them go. They've already put $100, $150 million into them."

He said that the discrepancy between trading levels of the two companies' respective securities "is way out of whack," noting that Laidlaw's 10¾% notes trade above 109 bid, "because they're rated better (B2)," while the Greyhound bonds, rated in the CC area, are around 81.

On the downside, he saw Goodyear Tire and Rubber Co.'s 7.857% notes due 2011 dipping to 85.5 bid from prior levels at 87, after the Akron, Ohio-based tire giant said that it would be delayed in filing its 10-Q quarterly earnings report while it completes an analysis of its previously announced financial restatement of results from 1998 through 2002.

Other issues ending easier included Delta Airlines, whose 7.90% notes due 2008 were seen down nearly two points at 79.5 bid, 80.5 offered, while at another desk, the Delta 10% notes due 2008 were seen down as much as four points, at 84.

Solutia Inc. - which on Monday said in a filing with the Securities and Exchange Commission that it expects to take a fourth-quarter charge of $25 million to $30 million on the closure of a joint venture plant in West Virginia - was seen down almost three points on the session, the St. Louis-based chemical company's 6 7/8% bonds due 2037 falling to 76 bid, 78 offered, its 7 3/8% bonds due 2027 ending at 57.5 bid, 58.5 offered, and its 11¼% notes due 2009 retreating to 86.5 bid, 88.5 offered.

Levi Strauss & Co.'s bonds were seen at one desk to have weakened a point to a point and a half, its 12¼% notes due 2012 ending at 71 bid and its 11 5/8% notes due 2008 closing at 74, although another trader said it didn't seem to him that the bonds were off that much, pegging the 12¼% notes at 69.75, down about a point, while the 7% notes due 2006 were unchanged and the 11 5/8s were off a half.

And a trader said that the move in Revlon Consumer Products bonds "looks about over" after two straight sessions during which the notes had risen on the news that the troubled New York cosmetics company will get a $125 million cash infusion this year and next from its chairman and controlling shareholder, billionaire financier Ronald Perelman.

He saw Revlon's subordinated notes offered at 53.5, down half a point from Monday, and with no bids seen, while its 9% notes due 2006 were down a full point at 67 bid, 70 offered.

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