Post-holiday session quiet, though primary calendar builds with TransDigm, Citadel, CDW deals

By Paul Deckelman and Paul A. Harris

New York, Nov. 29 - Bond market participants returned to work Monday after the extended Thanksgiving holiday weekend break, but traders said Junkbondland seemed as sluggish and sleepy as, say, someone who had gobbled down several big helpings of turkey and all of the carbohydrate-heavy goodies that go along with the bird like stuffing, yams, mashed potatoes and pie, to say nothing of the hard cider, and who then fell into a stupor.

No pricings were seen in the domestic market during the session, although terms did emerge on the smallish Black Elk Energy LLC five-year deal which actually had priced, unannounced, sometime last week.

While there were no pricings, there was notable activity in the forward calendar, with announcements of new eight-year bond deals from TransDigm Corp. ($780 million), Citadel Broadcasting Inc. ($500 million) and Darling International Inc. ($250 million). Quiksilver Inc. said that its Boardriders SA European unit will sell €200 million of seven-year notes.

Without any formal announcements, junk market syndicate sources meantime heard deals being shopped around by CDW Finance, ConvaTec Healthcare, Bresnan Communications and Mark IV Industries Inc., the latter a euro-denominated offering from the Amherst, N.Y.-based automotive systems maker.

Canadian Satellite Radio Holdings, Inc. and CEVA Group plc were also heard to be in the market with deals, while price talk emerged on Paramount Resources Ltd.'s C$250 million offering of seven-year notes.

In the secondary market, traders reported a boring and mostly featureless day, while statistical performance measures remained on the downside.

Calendar grows

No issues were priced on Monday as the primary market in the United States resumed following the four-day Thanksgiving recess.

However, the forward calendar saw a substantial build-out.

An even more substantial build is expected during Tuesday's session, according to a syndicate official, who added that an additional $20 billion to $25 billion of bonds could price during the run-up to 2011.

Dealers could continue to bring new issue business right into the pre-Christmas week, depending on market conditions, the official said.

However high-yield market conditions, which were none too good at mid-day on Monday, loom large with respect to the calendar, the source said.

Monday's weakness may have stayed the hands of one or two banks that might have otherwise announced new roadshows, or might even have attempted a drive-by deal, sources said.

Citadel plans $500 million

Among the additions to the calendar, Citadel Broadcasting Corp. will run an investor roadshow for a $500 million offering of eight-year senior notes this week.

J.P. Morgan Securities and Credit Suisse are managing the sale.

The Las Vegas-based radio company will use the proceeds to pay down bank debt.

CDW for Friday

CDW Corp. plans to price a $300 million offering of eight-year senior secured notes (B2/B-) on Friday.

J.P. Morgan Securities LLC, Deutsche Bank Securities, Barclays Capital and Morgan Stanley are the joint bookrunners for the debt refinancing.

Bresnan starts roadshow

Bresnan Broadband Holdings LLC began a brief roadshow on Monday for a $250 million offering of eight-year senior notes (B3/B+).

Bank of America Merrill Lynch, Citigroup, Barclays Capital, Credit Suisse and UBS Investment Bank are the joint bookrunners for the merger financing.

Darling $250 million

Darling International will conduct an investor roadshow during the present week for a $250 million offering of eight-year senior notes (B2/B).

J.P Morgan Securities LLC and Goldman Sachs & Co. are managing the acquisition financing.

CEVA sets Tuesday call

Hoofddorp, Netherlands-based CEVA Group plc will host an investor call on Tuesday for an expected $365 million minimum offering of new first-lien senior secured notes, according to market sources.

Credit Suisse has the books.

The supply chain management provider will use proceeds to prepay a portion of its senior secured credit facility.

Paramount price talk

Paramount Resources talked its C$250 million senior notes due 2017 (/B+/) with an 8¼% area yield.

The notes are expected to price on Tuesday via Scotia Capital and BMO Nesbitt Burns.

Mark IV to sell €200 million

Mark IV plans to price €200 million of seven-year senior secured notes by the end of the present week, via JP Morgan and Deutsche Bank Securities.

The notes are to be issued by Mark IV Lux and Mark IV USA Lux.

Proceeds will be used to refinance bank debt.

Recent deals little seen

Traders saw little or no activity in any of the recently priced deals, such as they were. For instance, nobody saw the Black Elk Energy five-year paper - which had actually priced last week but whose terms only became available on Monday - owing probably to the unexpected deal's small size and the Houston-based company's lack of any real prior footprint in the junk market, leaving it pretty much an unknown quantity.

Several traders also said they had not seen any activity in the Jack Cooper Transport Inc. offering of 12¾% notes due 2015.

The Kansas City, Mo.-based automotive transportation company's $122.5 million drive-by deal actually priced on Nov. 22, at 99.079 to yield 13%, but virtually nobody in the market became aware of it until last Wednesday.

There again, traders said, the small size of the deal, its sudden and unheralded appearance and the lack of investor familiarity with the company essentially negated any chance for aftermarket dealings.

But even companies whose bonds had been trading around last week were absent on Monday. For instance, a trader said that he had seen "not one picture" [i.e. quoted trading level] in Brightstar Corp.'s 9½% notes due 2016. The Miami-based provider of global logistical services to the wireless telecommunications industry priced $250 million of the bonds last Tuesday at par and they moved up a little to 100½ bid, 101 offered after that - but there was no sign of them seen on Monday.

A trader said that while he had seen Kingwood, Tex.-based calcined petroleum coke producer Rain CII Carbon LLC/CII Carbon Corp.'s 8% senior secured notes due 2018 trading around last week around 101 bid, 101¼ offered, versus last Tuesday's par issue price, he saw no sign of the $400 million issue on Monday.

Indicators stay down

Away from the new-deal realm, a trader saw the CDX North American Series 15 HY index ease by 1/8 point on Monday to end at 98¾ bid, 99 offered, after having dropped by ½ point on Friday.

The KDP High Yield Daily index meantime dropped by 20 basis points on Monday to close at 73.34, after having lost 4 bps on Friday. Its yield rose by 9 bps to 7.60%, following Friday's 2 bps gain.

The Merrill Lynch High Yield Master II index lost 0.134% on Monday, after having gained 0.033% on Friday. That left its year-to-date return at 13.452%, down from Friday's 13.604% and down as well from the 2010 peak level of 15.602% recorded on Nov. 9.

Advancing issues fell behind decliners by a nearly eight-to-five margin Monday, in contrast to Friday, when they had broken a four-session losing streak to move ahead of the underachievers, though only by several dozen issues out of the more than 400 which traded.

Overall activity, represented by dollar-volume levels, jumped 16-fold from the truly anemic levels seen during Friday's abbreviated and sparsely populated post-holiday session.

Despite the numerical gain in volume levels, though, traders queried by Prospect News almost to a man variously declared Monday's session as "quiet," "boring" and "uneventful."

One suggested that "maybe everyone had a little bit of turkey hangover," while a second said that "people were back in their offices - but it looked like they were all still finishing off their pumpkin pie."

Another trader opined that "going into Labor Day, people were predicting that the market would get busy again right after that, but it took around a week to really heat up [after a long stretch of idleness], so probably it will be the same thing with Thanksgiving."

"You would think things would have been more active," one of the traders mused, "since it's the next-to-last day of the month," when some managers engage in trades in order to clean up their books ahead of the month's end, for appearances sake.

"But maybe that will cause more activity [Tuesday]."

Some prints in Sprint

Among specific names, several traders detected some activity in the bonds of Overland Park, Kan.-based wireless telecom operator Sprint Nextel Corp. and its Sprint Capital Corp. financing arm, although there was no fresh news out on the company that might explain the activity.

A trader said that the Sprint bonds were probably the busiest junk issues, with parent Sprint's 7 3/8% notes due 2015 down 3/8 point at 96 7/8 bid, on "pretty good" volume, while seeing the company's 8 3/8% notes due 2017 unchanged at 104 5/8 bid.

"A lot of Sprint traded," said another trader, who saw the 7 3/8s at 96 bid, 97 offered, down from last week's levels around 97 bid. In the absence of any news about the company, he theorized that the bonds were "probably just trading [down] with the market."

A market source at another desk saw the Sprint 7 3/8s down around a half-point at 96¾ bid and its 6% notes due 2016 down a point at 94, while seeing Sprint Capital's 8 3/8% notes due 2012 up 1/8 at 105 3/8.

U.S. Oncology off

A trader said that "the only real mover" he had seen during the session was U.S. Oncology Inc., whose 9 1/8% notes due 2017 were seen on Monday at 119 bid, 120 offered.

"They were up big-time over the last couple of weeks," he noted, with the bonds having gotten up to around the 124 level by last week. They had been firming ever since the Nov. 1 announcement that the Woodlands, Tex.-based provider of medications and services to cancer centers around the United States had agreed to be acquired by investment-grade healthcare provider McKesson Corp. for $560 million, with debt assumption bringing the total value of the deal to $2.16 billion.

The trader saw no fresh news that might explain why the U.S. Oncology bonds would be down by 3 or 4 points or more on the day.

A second trader saw the bonds at 119¼ bid, 120 offered, down from recent levels around 123 bid, 124 offered. He too saw no news out on either company that might explain the retreat.

Auto bonds stay in neutral

A trader saw Motors Liquidation Co.'s 8 3/8% bonds due 2033 - the benchmark bonds issued by the "old" General Motors Corp. before the company's reorganization - ending at 31½ bid, 32 offered, on what he called "decent volume."

He said that the bonds had "pretty much" held in a 31-32 context all day.

Another trader saw the "old GM" benchmarks at 31 bid, 31½ offered, unchanged on the day, while GM's domestic arch-rival, Ford Motor Co.'s 7.45% bonds due 2031 were likewise steady at 107½ bid, 108½ offered.

Paper names quoted around

A trader said things were "pretty quiet" in the paper sector, with NewPage Corp.'s 11 3/8% senior secured notes due 2014 holding at 91 bid, 92 offered, a level "pretty much" where the Miamisburg, Ohio-based coated-paper manufacturer's bonds had been.

"It was really just quoted, but with no trades going on."

He also saw Catalyst Paper Corp.'s 11% senior secured notes due 2016 at 89 bid, 90 offered, unchanged in "pretty quiet" dealings, although he said that the fact that the Richmond, B.C.-based papermaker's issue does not show up on the Trace system made it "pretty tough to tell" just what the activity level was.

Still, he noted that he "only saw them quoted a few times, so my belief is they were not that active."

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