Samsonite, Concentra price; Charter better after S&P outlook revision

By Paul Deckelman and Paul A. Harris

New York, May 25 - Samsonite Corp. was heard by high-yield syndicate sources to have priced an upsized offering of seven-year notes, quickly bringing back the deal that the Denver-based luggage maker had packed up and taken away less than two weeks ago amid deteriorating market conditions. Concentra Operating Corp., meantime, priced a slightly upsized calendar offering of eight-year bonds. Sources also heard that Celanese AG's mammoth $1.565 billion equivalent mega-deal had been trimmed down a bit, the German chemicals maker choosing to raise at least some of the money it was going to get from the bond issue from a term loan facility.

In the secondary market, Charter Communications Holdings LLC's notes were seen a point or so firmer across the board, basking in the afterglow of Standard & Poor's having revised the outlook on the St. Louis-based cable operator's bonds to positive from developing. Goodyear Tire & Rubber Co.'s bonds were skidding to the downside after S&P cut the company's ratings.

The primary market topped the half billion-mark during Tuesday's session, which saw three deals totaling $560 million completed. Two of them were slightly upsized and one priced at the tight end of price talk.

One of Tuesday's deals was a drive-by from Hanover Compressor Co., in addition to which casino operator Aztar Corp. announced a quick-to-market transaction that it plans to price on Wednesday.

Tuesday's aggregate of information prompted one sell-side source to remark shortly after the close that the primary market - in spite of some recent wailing and gnashing of teeth - appears to be alive and kicking.

"People are in a hurry to get these refinancing deals done before Memorial Day," the source commented.

"Right now you have to say that June appears uncertain, at best. Everyone is expecting the Fed to hike interest rates in June. And people remain anxious about geopolitical events and concerned that rising crude oil prices will be an inhibiting force on the global economy."

One down, one to go for Samsonite

Samsonite Corp. priced Tuesday's biggest deal, a slightly upsized issue of $205 million of seven-year senior subordinated notes (B3/B-) which came at par to yield 8 7/8%, spot on the 8 7/8% area price talk.

Merrill Lynch & Co. and Deutsche Bank Securities ran the books on the refinancing deal for the Denver-based manufacturer of luggage and travel-related products.

On Wednesday Samsonite intends to price €105 million of six-year non-call-two floating-rate notes (B1/B+). Price talk is three-month Euribor plus 437.5 basis points area.

Deutsche Bank Securities and Merrill Lynch are joint bookrunners, with the German-based bank moving to the left for the floaters.

Also pricing Tuesday was Hanover Compressor Co.'s quick-to-market $200 million of 10-year senior notes (B3/B).

The notes priced at par to yield 9%, on the wide end of the 8¾%-9% price talk.

JP Morgan and Citigroup ran the books for the debt refinancing deal from the Houston-based petroleum industry compression services company.

And Concentra Operating Corp. sold a slightly upsized offering of $155 million of 9 1/8% eight-year senior subordinated notes (B3/B-) at 98.613 to yield 9 3/8%, which was on the inside of the 9½% area price talk.

Credit Suisse First Boston and Citigroup ran the books for the debt refinancing deal from the Addison, Tex provider of financial services to health care industry.

Autocam, Aztar to price Wednesday

Aside from the Samsonite floating-rate tranche, Aztar and Autocam Corp. are aiming to complete high-yield transactions on Wednesday.

Aztar plans to price a quick-to-market offering of $250 million 10-year senior subordinated notes (Ba3/B+) on Wednesday afternoon via Banc of America Securities, Citigroup and Deutsche Bank Securities.

No price talk was available at press time Tuesday evening.

The Phoenix, Ariz.-headquartered casino operator will use the proceeds to refinance debt.

Meanwhile price talk is 10 7/8%-11 1/8% on Autocam's $140 million of 10-year senior subordinated notes (B3/B-), which are expected to price on Wednesday afternoon via Goldman Sachs & Co. and Citigroup.

Celanese downsizes, extends roadshow

BCP Caylux Holding (Celanese AG) downsized its offering of 10-year senior subordinated notes (B2/B-) to $1.315 billion equivalent from $1.565 billion equivalent on Tuesday.

The Kronnberg, Germany industrial chemical company has also extended the roadshow for the deal, which is now expected to price in the middle of the week of May 31.

At the same time Celanese also added a $250 million second lien term loan to its financing package to support the €3.1 billion LBO by Blackstone.

Morgan Stanley, Deutsche Bank Securities and Banc of America Securities are joint bookrunners.

A buy-side source from the bank loan market told Prospect News that the bond offering was probably reduced and the second lien term loan was probably added due to the strength of the bank loan market.

Samsonite, Concentra up in trading

When the new Samsonite 8 7/8% senior subordinated notes due 2011 were freed from secondary dealings, the issue was seen having pushed up to 101.125 bid from its issue price at par earlier in the session.

Concentra's new 2012 notes were quoted having moved as high as 100.5 bid, 101 offered, well up from their 98.613 issue price earlier in the session, although the Addison, Tex.-based healthcare financial services company's bonds were seen at another desk going home at par bid, 100.5 offered.

Charter gains

Back among the established issues, Charter's bonds were firmer, getting a boost both from S&P's late-Monday outlook revision, and, some said, renewed talk that the company's principal owner, billionaire Paul Allen, might make an equity infusion. It should be noted, however, that the Allen rumor periodically makes the rounds of the market, with not much to show for it.

But there was nothing rumored or speculative about S&P's upgrading its outlook on Charter to positive from developing. Even though S&P acknowledged Charters heavy debt load, it said that Charter now had "an improved maturity profile" following last month's refinancing, which involved using the proceeds of a big new debt issue to take out closer maturing debt at the subsidiary level. S&P also cited operating improvement, including a slowing rate of basic subscriber loss.

A trader said Charter paper "was better," quoting its 8 5/8% notes due 2009 as having firmed to 81.25 bid, 82 offered from Monday's closing levels at 80.5 bid, 81.5 offered. He cited the S&P outlook revision, but as to the Allen talk, delivered a cryptic, skeptical "who knows?"

A trader said that Charter's bonds were up a point or two across the board, although he added that at higher levels, "you just generate more sellers." He saw Charter's 8 5/8s at 81 bid, 82 offered, with its 9 5/8% notes at 82 bid, 83 offered and its 8¼% notes at 92 bid, 93 offered. He said the "middle of the road stuff, the 101/4s, the 10 3/4s, was up marginally - but there was not a lot of flow."

At another desk, Charter's 8¾% notes due 2013 were a point-and-a-half better at 96.5 bid, while the 8 5/8s were seen as high as 82 bid, up more than a point on the day.

Goodyear sinks on ratings cut

While Charter was seen being pushed up by a ratings action, Goodyear was headed in the opposite direction, after S&P lowered the Akron, Ohio-based tire giant's ratings a notch, dropping its corporate credit to B+ from BB- previously and lowering the rating on most of its bonds to B- .

A trader quoted Goodyear's 7.857% notes due 2011 down a point at 85.5 bid, 86.5 offered, although he said that it didn't appear that "anything was really shaking" in terms of activity level.

Another trader actually saw the Goodyear bonds mostly unchanged to a bit higher, seeing its 6 3/8% notes due 2008 unmoved at around 89.5 bid, 90 offered, "just basically unchanged, net-net."

At another desk, the 7.857s were a point lower at 86.

S&P said the downgrade "reflects our view that the weak, albeit improving, operating performance of the company's North American tire operations, along with Goodyear's heavy schedule of debt maturities, pension funding, and other cash obligations during the next few years, will support a financial profile consistent with the now-lower rating.

However, analyst Martin King added that although the company's credit protection measures "are currently stretched for the rating, they are expected to gradually improve, and liquidity remains adequate."

Vivendi edges higher

Elsewhere, the news that Vivendi Universal was tendering for up to $1 billion of its dollar- and euro-denominated 2008 and 2010 bonds - and was attaching the highest priority to buying back its dollar-denominated 9¼% senior notes due 2010 and 6¼% seniors due 2008 (see "Tenders and Redemptions" elsewhere in this issue for further details) - gave those bonds a slight boost, although the general consensus was that the bonds were pretty much already trading around the anticipated takeout levels.

A trader quoted the 91/4s up perhaps half a point to around 117.125 bid, 117.75 offered, while the 61/4s were at 104.25 bid, 104.75 offered. At another shop, however, the 9¼% notes were seen having risen better than two points to 117.25 level.

Tenneco lower

Sources there meanwhile quoted Tenneco Automotive Inc.'s notes due 2009 at 105 bid, some 2½ points lower, after the Lake Forest Ill.-based auto parts maker said that it was terminating its tender offer for $130 million of the $500 million of outstanding notes (see "Tenders and Redemptions").

A trader meantime saw those bonds two points lower at 106 bid, 107 offered.

Tenneco had originally been tendering for the whole $500 million and was going to fund that tender offer and related costs with the proceeds of a $400 million junk bond issue - later increased to $420 million - and a $150 million stock sale. But the bond deal was pulled last week in response to worsening market conditions and Tenneco scaled back the tender offer. Then on Tuesday morning, it said that it wasn't going to do the stock sale either, due to volatile market conditions, leaving it with no way to fund the tender offer. Tenneco said it would study other alternatives regarding the 11 5/8% notes, which become callable in October.

OMI steady

OMI Corp.'s 7 5/8% notes due 2013 were quoted at 98 bid, unchanged, despite the news that the Stamford, Conn.-based seaborne transporter of crude oil had offered to buy Stelmar Shipping Ltd. for $562.8 million. However, a market source pointed out that OMI's bonds, which had been trading as high as 104 in mid-March before easing to around 102 earlier this month, had fallen to their present levels from 102 about a week ago after OMI said it had begun discussing an acquisition with Stelmar, a Greek-based tanker company.

Although the deal is structured as an all-stock transaction, Stelmark holders would have the option of getting up to 25% of the price in cash.

Market stronger

Overall, a trader said, the market felt "a little stronger - but we're nowhere near the levels we saw a week-and-a-half ago. Some names are off five to 10 points since then - some, depending where you look."

Having seen that kind of recent weakness, he said, bonds seemed to be firming, although he said that "whether it was short-covering on some issues, because bonds have dropped so much that people are covering some shorts on bonds that were hard to find two or three weeks ago, or some guys are looking at paper and saying [the drop] was a little overdone, and they're buying it back up again, it's really hard to tell at this point."

Some names, he said "are still getting beat down, and some were so tight that they had nowhere to go but down - they had to soften up a touch. But I don't see any huge buying, let's put it that way."

"The market was firm across the board" Tuesday, another trader said. "It opened up kind of flat, but by the middle of the day, things were very well bid, and they were lifting offers, seemingly across the board."

He said "the bid [wanted] list kind of stuff that we'd seen the last 10 days really kind of subsided," although he said he wasn't sure whether this was due to short-covering or "guys out there looking to put money to work. But there definitely was a good bid to the market going into the close."

The market, he concluded "feels [well] bid."

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