Community Choice, Superior, CDW price; Anadarko unchanged as lawsuit filed; CIT gets a boost

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., April 20 - A trio of upsized dollar-denominated deals sent issuance to $1.35 billion on what was expected to be a muted Wednesday session owing to the Passover holiday and vacations.

Superior Energy Services, Inc. priced an upsized $500 million issue of eight-year senior notes, CDW brought a massively upsized $450 million add-on to its 8½% senior notes due April 1, 2019 and Community Choice Financial Inc. sold an upsized $395 million issue of eight-year senior secured notes.

The secondary high-yield market gained traction during Wednesday trading, though overall volumes remained subdued due to the shortened holiday week.

In the secondary arena, Anadarko Petroleum Corp. closed unchanged on the day, though the company's debt was among the most actively traded issues. The bonds were steady despite news the company had filed a lawsuit against Macondo well partner BP plc.

Meanwhile, a lifting of a cease-and-desist order propped CIT Group Inc.'s bonds up. The order had previously disallowed the company from upping deposits or paying a dividend.

United Rentals Inc. reported its first-quarter results during the session, but the earnings miss did little to prompt a price move in the construction equipment rental company's debt.

In even junkier credits, NewPage Corp.'s debt was further weighed on by news the company had hired advisors to develop a restructuring plan. That news was in addition to an announcement last week about a management change.

Rite Aid Corp. closed firmer on the day, though there was no news out to explain why.

Superior drives through

Superior Energy priced its quick-to-market $500 million of eight-year senior notes (Ba3/BB+) at par to yield 6 3/8%.

The yield printed in the middle of the 6¼% to 6½% price talk and the amount was increased from $400 million.

J.P. Morgan Securities LLC, Wells Fargo Securities, Merrill Lynch and BNP Paribas managed the deal.

The New Orleans-based services provider to the energy industry plans to use the proceeds, together with available cash, to redeem all its senior exchangeable notes due 2026 on Dec. 15.

Soon after the terms circulated the deal was trading at 101 bid, according to a high-yield mutual fund manager.

CDW massively upsizes

Elsewhere in the drive-by market CDW priced a massively upsized $450 million add-on to its 8½% senior notes due April 1, 2019 (Caa1/CCC+/) at par to yield 8½%. The amount was raised from the original $150 million.

J.P. Morgan Securities LLC ran the books.

The company plans to use the proceeds to help fund tender offers for its 11% notes due 2015 and its 11½% PIK toggle notes due 2015. CDW had previously anticipated downsizing the tender offer after reducing its March 29 bond sale to $725 million from the $1.065 billion previously postponed on March 15. Wednesday's add on restores the full size.

CDW is a Vernon Hills, Ill.-based provider of technology products and services to business, government and education customers.

Community Choice atop talk

Also upsizing its new deal was Community Choice Financial.

The Hawthorne, N.J.-based lender priced a $395 million issue of eight-year senior secured notes (B3/B-) at par to yield 10¾%, on top of the price talk. The amount was increased from $370 million.

Credit Suisse Securities (USA) LLC and Jefferies & Co., Inc. were the joint bookrunners.

Proceeds will be used to refinance debt and pay a dividend.

Ideal Standard comes wide

Ideal Standard International SA took down a print that ended up being notably wider than guidance heard earlier in the week.

The Belgian plumbing fixtures company priced a €250 million issue of seven-year senior secured notes (Caa1//B+) at par to yield 11¾%.

That was at the tight end of the 11¾% to 12% price talk. However the yield on the new Ideal bonds came substantially wider than guidance of 10½% to 11% heard earlier in the week.

Goldman Sachs International and Deutsche Bank were the joint bookrunners for the debt refinancing deal.

Consolidated Minerals sets talk

Looking ahead to Thursday, Australia's Consolidated Minerals Ltd. talked its $400 million offering of five-year senior secured notes (B2/BB-) with a yield in the 9% area.

Deutsche Bank Securities Inc. and Citigroup Global Markets are the joint bookrunners.

The forward calendar also features a couple of deals that have been flying under the primary market radar, going back at least as far as the beginning of the present week.

Lee Enterprises, Inc. has been shopping a $1.05 billion two-part offering of senior secured notes (Caa2).

When it announced the deal on April 11 the Davenport, Iowa-based newspaper publisher planned to sell $675 million of six-year first-lien notes and $375 million seven-year second-lien notes.

Hard information on the deal has been scarce. However the market remains keenly focused on it, and rumors have been flying.

One hard fact: Lee's term loan and revolver traded off as much as 6 points on Tuesday before getting a modest bounce off the bottoms, according to market sources.

The revolver got as low as 91¼ bid on Wednesday, down sharply from levels in the mid-90s a week ago, a debt capital markets source said.

It is uncertain as to whether the lower loan levels are related to the lack of information about the bond deal, sources say.

Likewise, it has been radio silence on Builders FirstSource, Inc., sources say.

The $250 million offering of eight-year senior secured first-priority notes was unveiled on April 5, and no news has circulated in the interim.

Market closes strong

In the secondary, market indicators were firm on the day, with the CDX North American High Yield index reading gaining 7 /16 to end at 102 5/8 bid, 102¾ offered.

The KDP High Yield index meantime closed at 75.89, with a 6.55% yield. That compared to Tuesday's levels of 75.79, yielding 6.59%.

"The market was better generally," a trader said, seeing average gains of ¼ to ½ point. Thanks to the shortened holiday week, however, he said the market was "not particularly active."

Community Choice, Superior Energy gain in trading

Community Choice Financial's $395 million of 10¾% notes was seen better after trading began.

"I didn't see a lot of trading, but it popped up right away," a trader said, pegging the notes at 103.

"The proceeds will be used to partially pay a dividend, which is unusual for a financial company," the trader added.

The bonds mature in 2019.

Superior Energy also priced a deal, an upsized $500 million issue of 6 3/8% eight-year notes at par.

A trader quoted the issue at 101¼ bid, 101¾ offered.

Burger King rises

Burger King Corp.'s recent new deal - $685 million of 0% senior discount notes due 2019 - was actively traded during the midweek session, according to traders.

One trader called the debt unchanged at 581/4, while another said the paper "climbed back above issue price" at 58¼ bid, 58¾ offered.

The bonds were originally priced at 58.613, with an 11% yield.

The second trader said the 9 7/8% notes due 2018 were unchanged at 1051/2.

Anadarko active, unchanged

Anadarko Petroleum's debt closed the day unchanged despite news its had filed a lawsuit against BP regarding last year's Macondo well explosion and resulting oil spill.

A trader saw the 6 3/8% notes due 2017 at 112, the 6.20% notes due 2020 at 99½ and the 6.45% notes due 2036 at 1021/4.

Another trader said Anadarko bonds were "the volume leaders again," but that they "looked relatively unchanged."

He pegged the 6.45% notes at 1021/4, the 6.20% notes at 99½ and the 6 3/8% notes at 112 1/8.

A third source placed the 6 3/8% notes around the 111 mark.

Anadarko filed the lawsuit along with Mitsui & Co.'s Moex Offshore LLC units, both of them minority stakeholder sin the well.

The plaintiffs are alleging that BP breached its partnership agreement, thereby rendering them not responsible for damages caused by the Gulf of Mexico debacle.

"BP's conduct was the proximate cause of foreseeable damage suffered by Moex Offshore, including claims made against it for liability for death, personal injury, cleanup costs, economic loss, loss of investment, lost profits and any damages or fines assessed in pending or future proceedings involving the spill," Moex said in a court filing on Tuesday.

The plaintiffs are also blaming Transocean Ltd. for the disaster.

BP and Transocean have both called the claims meritless.

CIT gets a boost

A trader said CIT Group's debt was pushed up by news that federal regulators had lifted a cease-and-desist order that barred the company from increasing deposits or paying dividends.

He called the paper up a quarter- to a half-point across the board. He saw the 7% notes due 2017 at par ¾ bid, 101¼ offered, up from par ½ bid, par ¾ offered previously. The 7% notes due 2016 were seen at 101 bid, 101 3/8 offered, and the 7% notes due 2015 at 101 5/8 bid, 101 7/8 offered.

Another source saw the 2015 paper at 1011/4.

In July 2009, the Federal deposit Insurance Corp. and the Utah department of Financial Institutions issued an order preventing CIT from issuing credit lines or engaging in other certain transactions, without prior approval.

CIT then filed for Chapter 11 protection in November 2009.

United Rentals steady

Despite an "earnings miss," a trader said United Rentals' bonds were "relatively unchanged."

He quoted the 8 3/8% notes due 2020 at 106 bid, 106¾ offered.

Another trader said the notes were "pretty active" and "maybe down a quarter," though he did not give price levels.

Net loss for the first quarter was $20 million, or 34 cents per share. The previous year, United Rentals posted a net loss of $40 million, or 67 cents per share.

Revenues were 9% stronger at $523 million.

However, analysts polled by Thomson Reuters were expecting a loss of 12 cents per share on revenues of $551 million.

NewPage remains weak

NewPage has reportedly hired advisors to help develop a restructuring plan, putting further pressure on its already depressed bonds.

A trader called the 10% notes due 2012 slightly weaker at 573/4, while the 11 3/8% notes were almost ½ point lower at 99 3/8.

At another desk, a trader called the 10% notes ½ point softer at 57 bid, 57 ½ offered. He quoted the 11 3/8% notes at 99¼ bid, 99½ offered, also down.

He said the 12% notes due 2013 were trading around 25.

"[The 10% notes] must be down 15 points from the highs a few weeks ago," he said.

A third trader deemed the 10% notes a point weaker at 571/2.

According to news reports, NewPage has retained Lazard Ltd., FTI Consulting Inc. and law firm Dewey & LeBoeuf LLP to advise on a potential restructuring plan.

The news was in addition to Friday's announcement that David Prystash, chief financial officer, had resigned. Prystash's departure marks the fourth executive exit since June 2010.

Rite Aid gains

Rite Aid's debt was trending higher, traders reported, though there was no news out to cause the gains.

One trader said the 9½% notes due 2017 were a point better at 901/4. Another trader said the issue was "a touch higher" at 90.

At another shop, the 9½% notes were placed at 89½ and the 9 3/8% notes due 2015 at 90 3/8 bid, 90 7/8 offered.

A fourth source deemed the 8 5/8% notes due 2015 a bit higher at 91 bid.

Rite Aid recently released quarterly results that were better than had been expected, but Gimme Credit LLC analyst Kim Noland pointed out that the company is not yet out of the woods.

"Debt is now almost 7.5x adjusted EBITDA, imperiling equity value, and bondholders must remain vigilant in the face of lackluster operating performance that could sink bond value," she wrote in a report published Wednesday.

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