DISH, Continental Resources bonds come in ahead of new issues; Intelsat rises as IPO plan filed

By Stephanie N. Rotondo and Paul A. Harris

Phoenix, April 2 - The high-yield bond market "felt like maybe there was a little more going on," a trader said on Tuesday.

Specifically, he noted that the market was awaiting new deals from Continental Resources Inc. and DISH DBS Corp.

"I think DISH is being upsized a bunch," he said after the market had closed, but ahead of pricing. Leading up to pricing, traders remarked that the company's existing issues were slipping.

Existing Continental bonds were also a touch weaker ahead of the new issue.

Intelsat Global Holdings SA was the "news of the day," according to a trader, as the company filed plans for an initial public offering. The company's debt rose on the news, though the proposed IPO is for about half of what had originally been slated back when the deal was first talked about in May.

Market inches higher

Yields on the KDP High Yield index tightened up Tuesday, as the day's reading came to 75.61 with a 5.51% yield.

That compared to 75.56, with a 5.53% yield on Monday.

The CDX North American High Yield index meantime rose 7/32 of a point to 103 11/32 bid, 103 15/32 offered.

DISH massively upsizes

The Tuesday primary market saw two drive-by issuers bring a total of three tranches and raise a total of $3.8 billion.

The overall sizes of both transactions were massively increased.

DISH Network upsized its two-part notes offer (Ba2/BB-) to $2.3 billion from $1 billion.

The short-maturity tranche features $1.2 billion of five-year notes, which priced at par to yield 4¼%. The yield printed at the tight end of the 4¼% to 4 3/8% yield talk.

The long tranche was a $1.1 billion issue of seven-year notes, which priced at par to yield 5 1/8%, on top of yield talk.

Deutsche Bank Securities Inc. was the bookrunner.

The Englewood, Colo.-based satellite broadcasting company plans to use the proceeds for general corporate purposes.

Continental at the tight end

Continental Resources priced an upsized $1.5 billion issue of non-callable 10-year senior notes (Ba2/BB+) at par to yield 4½%.

The deal was upsized from $1 billion. The yield printed at the tight end of the 4½% to 4 5/8% yield talk.

BofA Merrill Lynch, J.P. Morgan Securities LLC, RBS Securities Inc., Mitsubishi UFJ Securities and Wells Fargo Securities LLC were the joint bookrunners.

Proceeds will be used to pay down the company's revolving credit facility and for general corporate purposes.

The oil producer is based in Oklahoma City.

ABC Supply eight-years

The active forward calendar began to build on Tuesday.

American Builders & Contractors Supply Co. Inc. expects to price a $600 million offering of eight-year senior notes (B3/B) late in the present week.

Deutsche Bank Securities Inc., BofA Merrill Lynch and UBS Securities LLC are the joint bookrunners.

Proceeds will be used to help finance the redemption of the minority shares held by Advent International, Apollo and the founding family of the legacy Bradco Supply business, and to redeem all outstanding stock appreciation rights.

Hecla starts Wednesday

Hecla Mining Co. plans to start a roadshow on Wednesday for its $400 million offering of eight-year senior notes.

The deal is set to price early in the week ahead.

BofA Merrill Lynch and Scotia Capital are the joint bookrunners. ING is the co-manager.

The credit ratings agencies are expected to assign mid-single B ratings to the notes.

Upon release from escrow, the proceeds will be used to pay the cash portion of the Aurizon Mines Ltd. acquisition and for general corporate purposes.

DISH, Continental soft

DISH Network's bonds were "hitting the skids a little bit," a trader said on Tuesday.

The bonds were dribbling as the Englewood, Colo.-based satellite broadcasting company shopped around a new two-tranche bond issue.

The trader noted that proceeds from the new deals are expected to be used for acquisitions.

"They didn't like that," he said of the company's existing debt.

The 7 7/8% notes due 2018 were off 1½ points to 117 1/8, while the 5 7/8% notes due 2022 fell about a point to 104 3/8.

The 6¾% notes due 2021 declined nearly a point to 1103/4.

But while the first trader blamed the use of proceeds for the bonds' decline, another trader said it was typical, especially as the existing debt was trading at such a premium.

"You can roll out of a bond that's trading at 117 and get the new deal at par," he said.

Continental Resources' 5% notes due 2022 were also softening a touch ahead of pricing of a new issue.

A trader called the bonds down fractionally at 1063/4.

Intelsat up on IPO talk

Intelsat paper was "all up a couple points," according to a trader, as the company filed for an IPO.

The trader said that the bonds had also been put up for a potential upgrade, further helping the debt rise.

The trader saw the 7¾% notes due 2021 move up to 104¼ bid from previous levels around 102. The 8 1/8% notes due 2023 closed at 104 bid.

The Luxembourg-based satellite services company filed to raise as much as $543 million from IPO, which was about half of the $1.75 billion the company had originally sought back in May 2012.

The expected price per share under the new plan is $21 to $25 each.

Proceeds from the sale, which will be for 21.7 million shares, or about 21% of outstanding stock, will be used to pay down debt.

Quicksilver ramping up

Quicksilver Resources Inc.'s bonds continued to "keep grinding higher," a trader said on Tuesday.

He called the 11¾% notes due 2016 up nearly a point at 106. The 7 1/8% notes due 2016 meantime gained 3 points to end at 953/4, while the 9 1/8% notes due 2018 put on "almost 2 points," to end around 98 1/8.

On Friday, the Fort Worth, Texas-based oil and gas exploration company announced it had reached an agreement to sell a 25% stake in its Barnett oil and shale assets to TG Barnett Resources LP, a wholly owned subsidiary of Tokyo Gas Co. Ltd.

Quicksilver will receive $485 million from the sale, which is expected to close on April 30. The company will use the funds to reduce outstanding debt.

Going forward, Quicksilver will remain operator of the asset, and capital spending will be shared proportionally.

NII, Clear Channel mixed

A trader said that NII Capital Corp.'s debt was "a little better" on the day despite no fresh news out on the Reston, Va.-based company.

He said the 7 5/8% notes due 2021 hit a high of 73 before settling back in to 72¾ bid, 73¼ offered. The 8 7/8% notes due 2018 traded up to 761/2.

Another trader pegged the 7 5/8% notes at 723/4, which he deemed unchanged.

Also rising on no news was San Antonio-based Clear Channel Communications Inc.'s 11% notes due 2016.

A trader saw that issue gaining about a point to close around 801/2.

A second trader, however, called the 9% notes due 2021 flat at 93 5/8.

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