GMAC brings surprise quickie add-on deal; Lear, Nationstar, Martin price; Lyondell upsizes

By Paul Deckelman

New York, March 23 - GMAC Inc. - which tapped the high yield market for $1.5 billion via a 10-year bond issue just two weeks ago - came back for more on Tuesday, high yield syndicate sources said; the auto and residential lender priced a $400 million add-on offering of those same notes.

GMAC's unexpected return visit to the Junkbondland primary sphere late in the session was one of several deals which priced during a busy session that saw more than $1.5 billion of new paper come to market.

The big deal of the day was Lear Corp.'s $700 million two part-offering, which actually priced too late in the day for an aftermarket. The auto components company sold $350 million each of eight- and 10-year notes.

Also pricing were offerings from Nationstar Mortgage LLC and from energy operator Martin Midstream Partners LP/Martin Midstream Finance Corp. Nationstar priced $250 million of five-year notes, while Martin Midstream brought $200 million of eight-year notes.

Apart from actual pricings, Lyondell Chemical Co. was heard by the syndicate sources to have solidly upsized its already massive $2.25 million offering of 7.5-year senior secured notes, bringing the dollar/euro deal total to $2.75 billion. Talk emerged Tuesday on that gigantic issue, which is expected to price on Wednesday.

Prospective new deals also slated from SquareTwo Financial Corp., PharmaNet Development Group, Inc. and Stratus Technologies Inc.

Away from the new deal arena, there was brisk activity and some upside movement in Vought Aircraft Industries Inc. on the news that Triumph Group Inc. will buy out the Dallas-based aerospace company. The company's bonds, which rose to the 101 level, saw very active dealings.

GMAC makes a return visit

GMAC priced a $400 add-on tranche to its recently sold $1.5 billion issue of 10-year senior unsecured notes (B3/B/B) on Tuesday, with the unheralded deal surprising some market participants

The offering of 8% notes due 2020, came to market quickly and quietly, with little if any fanfare. The bullet bonds priced at 99.153 to yield 8 1/8%. There had been no price talk on the issue.

While one trader afterward said that he "didn't see squat" in the new deal, another did quote the bonds at 100¾ bid, 101½ offered.

A third opined that he thought the new bonds "had been received pretty well. GMAC is now doing fine. Raising more money is terrific."

The deal for GMAC, a Detroit-based automotive and mortgage company formerly owned by General Motors Corp. but now majority-owned by the federal government, was brought to market by sole manager J.P. Morgan Securities Inc. - a change from the original mega-deal, which was done by joint bookrunners Deutsche Bank Securities Inc., Morgan Stanley & Co. Inc., Bank of America Merrill Lynch and Citigroup Global Markets Inc. That $1.5 billion original deal priced on March 10 at 98.32 to yield 8¼%.

As was the case with the original offering, the company plans to use the deal proceeds for general corporate purposes.

Lear is day's largest

The biggest deal to price - and in its own way, also something of a surprise - came from Southfield, Mich.-based automotive components maker Lear Corp., which priced a $700 million two-part offering of eight-year and 10-year senior notes (B1/BB-) very late in the day.

The quickly shopped issue came to market just a day after the company disclosed its plans for an underwritten public bond offering in a shelf registration statement filed Monday with the Securities and Exchange Commission; there had been no firm word beforehand on the timing of the deal.

Lear priced $350 million of 7 7/8% notes due 2018 at 99.276 to yield 8%, and priced $350 million of 8 1/8% notes due 2020 at 99.164 to yield 8¼%. The deal was heard to have priced well after trading had wound down for the day. No price talk was heard out on the issue before pricing.

Citigroup Global Markets, Inc., J.P. Morgan Securities Inc., Barclays Capital Inc. and UBS Securities LLC were joint bookrunners for the offering.

Lear said that it plans to use the net proceeds from the bond offering, along with cash and cash equivalents, to repay bank facility debt.

Martin prices and firms

Earlier in the day, Kilgore, Tex.-based diversified energy services company Martin Midstream Partners LP and Martin Midstream Finance Corp. priced a $200 million offering of senior notes due 2018 (B3/B+). The company's 8 7/8% notes priced at 98.594 to yield 9 1/8%, coming at the tight end of price talk envisioning a yield of between 9 1/8% and 9 3/8% and a discount of approximately 1 to 2 points.

Traders saw the new bonds firming smartly in the aftermarket, with one quoting them having gotten as good as 100 5/8 bid, 101 1/8 offered. The deal, he continued "was multiple times oversubscribed."

Another trader saw the bonds jump to 100½ bid, 101 offered, while a third saw the bonds get up to 100½ bid, 100 5/8 offered, before easing a little later on to 100¼ bid, 101 offered.

The deal came to market via bookrunners Wells Fargo Securities, LLC, RBC Capital Markets Corp. and UBS Investment Bank.

Proceeds from the deal, which was first announced a week ago, will be used to repay bank debt.

Nationstar prices, holds around issue

Nationstar Mortgage LLC also successfully priced a deal Tuesday, bringing a $250 million five-year offering of senior notes (B2/B) to market. Those 10 7/8% notes priced at 97.205 to yield 11 5/8% -- wide of price talk for a yield between 11% and 11¼%.

A trader saw the Dallas-based mortgage lender's new paper little changed from issue, around 97½ bid, 98 offered, while another saw no trace of the modestly sized deal in the secondary.

The deal was brought to market via joint bookrunners Barclays Capital Inc., Banc of America Merrill Lynch, Deutsche Bank Securities, Inc. and RBS Securities Inc.

Nationstar plans to use the deal proceeds to refinance corporate debt and for general corporate purposes, including potential acquisitions and servicing of portfolios.

Upsized Lyondell lies ahead

In terms of sheer size, the biggest deal wasn't a pricing at all. Lyondell Chemical Co. was heard by high yield syndicate sources to have upsized its already massive dual-currency offering of 7.5-year senior secured notes by another $500 million on Tuesday to $2.75 billion equivalent, getting ready for an expected Wednesday afternoon pricing. Books in the United States close at 10 a.m. ET on Wednesday.

The company is planning to price some bonds denominated in U.S. dollars and some in euros. Tranche sizes have not been set yet.

The sources heard price talk on the dollar portion of the deal envisioning a yield of 8% to 8¼%, with an anticipated discount of between zero and 1 percentage point. Talk on the euro portion of the deal anticipates a yield between 8 1/8% and 8 3/8%, also with a discount between zero and 1 percentage point.

Bank of America Merrill Lynch, UBS Investment Bank, Barclays Capital, Citigroup, Credit Suisse, Deutsche Bank, JP Morgan, Morgan Stanley and Wells Fargo Securities are joint bookrunners for the deal.

The Houston-based chemical company - a unit of Netherlands-based LyondellBassel -- plans to use the deal's proceeds, along with proceeds of new bank facility, to finance the company's emergence from bankruptcy.

Lyondell, a trader said with no small understatement "is going to be a really big deal," in terms of how it plays in the market. He said that and another $2.75 billion issue - the offering unveiled Monday by Consol Enegy Inc. would dominate the proceedings, with the latter deal scheduled to come late in the week.

But he raised a cautionary note - "that's a lot of bonds" to be swallowed up.

SquareTwo slates deal

Elsewhere in the primary sphere, SquareTwo Financial Corp. was heard to be planning to sell $300 million of seven-year senior secured second-lien notes; high yield syndicate sources said pricing is expected to take place around the middle of next week.

The deal will come to market via bookrunners Bank of America Merrill Lynch and BMO Capital Markets Corp.

Denver-based SquareTwo, a leading purchaser of charged-off accounts receivable in the United States, plans to use the new deal proceeds, together with a new revolving credit facility, to repay debt under the existing credit facility and its existing senior subordinated notes, as well as for general corporate purposes, including to fund the purchase of charged-off accounts receivables.

PharmaNet hitting the road

PharmaNet Development Group, Inc. was heard by syndicate sources to be hitting the road Wednesday to begin marketing its $175 million offering of seven-year senior secured notes, which will come to market via joint bookrunners Jefferies & Co. and Deutsche Bank Securities, Inc. The roadshow will run for a week, through Wednesday March 31, with pricing anticipated afterwards.

PharmaNet, a Princeton, N.J.-based that runs clinical tests and studies for pharmaceutical, biotechnology, generic drug and medical device companies, plans to use the deal proceeds to repay its existing credit facility and to fund a dividend to its equity investors.

Stratus shops its deal

Another company heard to be actively pitching a deal to investors was Stratus Technologies, Inc., which is doing a $215 million offering of five-year senior secured notes. Sources heard that a roadshow for the deal began on Tuesday and will run through next Wednesday, March 31, with pricing anticipated after that.

The deal will come to market via bookrunner Jefferies & Co.

Status, a Maynard, Mass.-based information technology company that operates computer network servers, plans to use the deal proceeds to repay outstanding bank debt.

Market indicators better

Among bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up ½ point on Tuesday at 100 bid, 100½ offered - a psychologically significant milestone for the index. He had seen the index gain ½ point also on Monday.

The KDP High Yield Daily Index meantime rose by 8 basis points Tuesday 71.95, after having fallen 7 bps on Monday. Its yield tightened by 4 bps to 7.86%, after widened by 4 bps the previous session.

Advancing issues retook the lead from decliners Tuesday, though by only a relative handful out of more than 1,500 tracked. On Monday, the decliners had moved in front by a small margin to finally break a 16-session streak, going back to late February, in which advancers had led.

Busy Vought moves up

A trader saw Vought Aircraft's 8% notes due 2011 busily traded, with more than $25 million changing hands in round-lot transactions, making it one of the busiest issues on the day.

A trader said that the bonds settled in just under 101 bid, up from prior round-lot levels in the mid 99 area, so they were up about a point or more on the news that Triumph group will acquire Vought in a $1.44 billion deal.

"They do plan to take these [bonds] out at some point." He noted that the bonds are currently callable at par, but said that the acquisition won't close until July, "and then if they stick a 30-day call in there, that gets you into August. So even if you paid as much as 101, that's not a bad deal, between now and August."

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