PVR Partners, Sonic Auto, NXP price, Seven Generations, Safway up next as calendar builds

By Paul Deckelman and Paul A. Harris

New York, May 6 - The new week got off to a fairly robust start on Monday, high-yield syndicate sources said, as a trio of deals totaling nearly $1.5 billion principal amount was heard to have priced during the session.

All three were opportunistically timed, quickly shopped transactions.

Natural gas midstream pipeline operator PVR Partners LP priced $400 million of eight-year notes, a deal which was twice upsized to meet investor demand. Traders said those bonds firmed smartly when they reached the aftermarket.

Car retailer Sonic Automotive Inc. drove by with $300 million of 10-year paper, which also did well when it was freed for trading.

The big deal of the day came from Dutch semiconductor manufacturer NXP BV, which did $750 million of five-year notes, after having upsized the offering. However, the new bonds priced too late in the session for secondary market dealings.

Among recently priced issues, New Look Bondco I plc, LKQ Corp., Ineos Group Holdings SA and United Continental Holdings Inc. were seen to be trading at notable premiums compared to where they had come to market, but Sirius XM Radio Inc.'s two-part deal remained just modestly above its issue price.

The forward calendar, meanwhile, continued to build as deals from issuers, such as Seminole Hard Rock Entertainment, General Motors Financial Co., Inc., Iracore International Holdings, Inc. and Commercial Metals Co., surfaced. Price talk emerged for Safway Group Holdings LLC and Seven Generations Energy Ltd., both of which are expected to price on Tuesday.

Away from the new deals, the secondary market's tone was seen better. Statistical performance measures were up across the board for a third consecutive session.

NXP massively upsizes

The primary market kicked off the May 6 week in drive-by mode, as three issuers brought quick-to-market single-tranche deals, raising a combined total of $1.45 billion.

Executions remain conspicuously tight. Two of the three drive-bys were upsized, and two of the three priced ta the tight end of talk, while the third priced on top of talk.

Netherlands-based NXP BV and NXP Funding LLC priced a massively upsized $750 million issue of non-callable five-year senior notes (B3/B) at par to yield 3¼%.

The deal was upsized from $500 million.

The yield printed on top of yield talk.

Morgan Stanley, Barclays, Credit Suisse and KKR were the joint bookrunners.

The Eindhoven, Netherlands, semiconductor company plans to use the proceeds to redeem its dollar-denominated floating-rate notes due 2016, with any remaining proceeds to repay the revolver.

PVR at the tight end

PVR Partners and Penn Virginia Resource Finance Corp. II launched and priced an upsized $400 million issue of eight-year senior notes (B2/B-) at par to yield 6½%.

During the brief time it was in the market, the deal, which was announced at $300 million, was twice upsized by $50 million.

The yield printed at the tight end of the 6½% to 6¾% yield talk.

J.P. Morgan, RBC, Wells Fargo, BofA Merrill Lynch, Citigroup, PNC and SunTrust were the joint bookrunners for the debt refinancing.

Sonic senior subs

Sonic Automotive priced a $300 million issue of 10-year senior subordinated notes (B3/BB-) at par to yield 5%.

The yield printed at the tight end of the 5% to 5 1/8% yield talk.

BofA Merrill Lynch, J.P. Morgan and Wells Fargo were the joint bookrunners.

Proceeds will be used to redeem the company's outstanding 9% senior subordinated notes due 2018, with any remaining proceeds for general corporate purposes, including the acquisition and development of dealerships and related real property, repurchases of class A common stock and other working capital needs.

GM $2 billion trifecta

The new issue calendar saw a huge build-out of roadshow deals on Monday.

General Motors Financial is planning to sell $2 billion of non-callable senior notes in tranches maturing in three, five and 10 years (existing ratings Ba3/BB-/BB) before the end of the week.

Deutsche Bank Securities Inc., Barclays, Goldman Sachs & Co., RBC Capital Markets LLC and RBS Securities Inc. are the joint bookrunners for the transaction, which is being conducted on the high-yield desk.

Proceeds will be used to fund a portion of the acquisition of the international auto finance and financial services businesses of Ally Financial Inc., to repay some debt to General Motors Co. under its inter-company loan and for general working capital purposes.

Barminco starts roadshow

Australia's Barminco Finance Pty Ltd. started a roadshow on Monday for its $500 million offering of five-year senior notes (expected ratings B1/B-).

The deal is set to price on Friday.

J.P. Morgan, Goldman Sachs and HSBC are the joint bookrunners.

The Hazelmere Western Australia-based international mining contractor plans to use the proceeds to refinance debt and for general corporate purposes.

Seminole Hard Rock

Seminole Hard Rock Entertainment and Seminole Hard Rock International LLC are planning to price a $350 million issue of senior notes due 2021 (B2//) before the end of the week.

BofA Merrill Lynch and Credit Suisse are the joint bookrunners for the Rule 144A for life deal.

Proceeds, together with proceeds from the company's term loan, will be used to purchase, redeem or otherwise acquire all existing floating-rate senior secured notes due 2014, to make investments and acquisitions and for general corporate purposes.

Magnetation seven-year deal

Magnetation LLC and Mag Finance Corp. began a roadshow on Monday for a $325 million offering of seven-year senior notes (expected ratings B3/B-).

The deal is also set to price on Friday.

J.P. Morgan, Jefferies and Deutsche Bank are the joint bookrunners.

The Grand Rapids, Mich.-based iron ore producer plans to use the proceeds to repay debt, for general corporate purposes and capital expenditures associated with construction projects.

Commercial Metals roadshow

Commercial Metals began a roadshow on Monday for its $300 million offering of non-callable 10-year senior notes (existing ratings Ba2/BB+).

The deal is set to price on Wednesday.

Citigroup, Deutsche Bank, BofA Merrill Lynch, RBS and Wells Fargo are the joint bookrunners for the debt refinancing deal.

Iracore via Jefferies

Iracore International plans to price a $110 million offering of five-year senior secured notes this week via bookrunner Jefferies.

Proceeds, together with $125 million in new equity, will be used to fund the acquisition of the company.

Talking the deals

At least two deals are on deck for Tuesday, as the dealers circulated price talk on Monday.

Safway Group Holding talked its $540 million offering of five-year senior second-lien notes (B3//) with a yield in the 7¼% area.

Goldman Sachs, Wells Fargo, Morgan Stanley, Barclays and Lazard are the joint bookrunners.

And Seven Generations Energy upsized its offering of seven-year senior notes (Caa1/CCC) to $400 million from $250 million and talked those notes to yield in the 8½% area.

Credit Suisse and RBC are the joint bookrunners.

PVR Partners pops

In the secondary market, a trader saw PVR Partners' new 6½% notes due 2021 at 100¼ bid, 101¼ offered on the break, after the Radnor, Pa.-based natural gas midstream operator's quickly shopped deal had priced at par.

However, a little later on, a trader saw those bonds having improved solidly, quoting them at 101½ bid, 102 offered.

Yet another trader pegged the bonds at 101¾ bid, 102¼ offered.

Sonic soars in secondary

One of the traders saw Sonic Automotive's 5% senior subordinated notes due 2023 having motored up to 102 bid, 102¼ offered, from their par issue price.

The Charlotte, N.C.-based automotive retailer's existing 9% senior subs due 2018 were seen having moved up to just under 111½ bid, a gain of 1 5/8 points.

In announcing plans for its new deal, Sonic had said that it would use the proceeds from the offering to redeem roughly the $210 million of those 9% 2018 notes outstanding under the optional redemption provisions of the bonds' indenture.

The day's third deal, from Netherlands-based semiconductor manufacturer NXP BV, came too late in the session for any kind of aftermarket activity, a trader said.

Recent deals hold their own

Among recently priced bond offerings, a trader saw New Look Bondco I's 8 3/8% senior secured notes due 2018 at 100½ bid, 101½ offered.

The company - a subsidiary of British apparel and footwear retailer New Look Group Retail Ltd. - had priced the $250 million issue at par on Friday. Although the bonds were not seen trading around.

The notes were part of an £809 million-equivalent three-part offering that also included five-year secured notes denominated in pound sterling and in euros.

Thursday's deals, for the most part, continued to hold their own on Monday.

A trader saw United Continental Holdings Inc.'s 6 3/8% notes due 2018 at 103¾ bid on Monday. That was slightly above the 103 5/8 bid level at which several traders had seen the bonds going home on Friday.

United Continental, the Chicago-based operator of the now-merged UAL and Continental Air Lines, priced $300 million of those notes at par on Thursday in a quick-to-market transaction via its United Air Lines Inc. subsidiary.

LKQ Corp.'s 4 3/3% notes due 2023 were quoted by a trader on Monday at 102½ bid, 103 offered.

That was well up from the par level at which the Chicago-based automotive components manufacturer had priced its $600 million deal, after having upsized the offering from an originally announced $500 million.

Ineos Group's 6 1/8% notes due 2018 were seen little changed on Monday from their close Friday at 102¼ bid, 102¾ offered.

The Swiss chemical manufacturer had priced $678 million of those notes at par on Thursday. They quickly pushed up to around the 102½ bid, 103 offered level by the day's end and remained around there on Friday and again on Monday.

Firm overall tone

A trader said he did "not really" see much happening in Junkbondland away from the primary market.

While he said the market seemed firm, "nothing I saw really stood out. We didn't see a lot of action."

Market indicators gain

Overall, statistical junk performance indicators were firmer for a third consecutive session on Monday.

The Markit Series 20 CDX North American High Yield index was up by 15/32 of a point on Monday to end at 107 3/32 bid, 107 7/32 offered, its first finish this year above the 107 mark. On Friday, it had risen by 11/32 of a point.

The KDP High Yield Daily index, meanwhile, rose by 2 basis points to end at 76.67, its 10th straight gain. On Friday, it had improved by 15 bps. Its yield came in by 2 bps to 4.93%, its 10th consecutive decline, including Friday's 6 bps narrowing.

And the widely followed Merrill Lynch High Yield Master II index's luck held out, as it posted its 13th consecutive advance on Monday. It rose by 0.109%, on top of Friday's 0.206% advance.

That lifted its year-to-date return to 5.54%, marking the 11th straight new peak level for the year, from Friday's 5.425% the previous peak.

The index's yield to worst also dropped to a new all-time low at 5.063% on Monday, versus the prior low point of 5.082% recorded on Friday. Monday was the fourth straight session during which a new low had been reached.

Its spread to worst tightened on Monday to 434 bps over Treasuries, a new tight level for the year, versus the prior tight point of 438 bps, also recorded on Friday. It was the fourth straight session in which a new tight level for 2013 had been reached.

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