AMD, Digicel, Salem deals price, new AMD bonds firm smartly; Lyondell zooms, Brunswick booms

By Paul Deckelman and Paul A. Harris

New York, Nov. 23 - Advanced Micro Devices Inc., Digicel Group Ltd. and Salem Communications Corp. combined to price nearly $1.3 billion of new high yield bonds on Monday, as Junkbondland moved closer to the big Thanksgiving Day holiday break at the week's end. While the AMD and Salem deals represented a clearing out of some of the final items remaining on the forward calendar heading towards the holiday, Digicel was an opportunistically timed drive-by offering that priced just a few hours after it had surfaced.

Another such suddenly appearing, quick-to-market transaction was Abengoa SA's euro-denominated add-on to the five-year deal which the Spanish engineering and energy company had brought to market only this past Friday.

When the new AMD bonds were freed for secondary dealings, traders saw the Sunnyvale, Calif.-based computer-chip manufacturer's issue jump by several points from its heavily discounted pricing level.

They also saw a Friday deal, Easton-Bell Sports Inc., continue the strong aftermarket momentum it had established after pricing, and saw Koppers Inc.'s Friday deal higher as well.

Apart from new-issue activity, Lyondell Chemical Worldwide Inc.'s bonds were seen having soared some 10 points - though not on particularly heavy volume - on the news that Indian industrial conglomerate Reliance Industries Ltd. had made a non-binding offer to buy the chemical company's bankrupt parent, LyondellBasell Industries AF SCA, with press reports estimating the offer's worth in the $10 billion to $12 billion range.

Also moving up by several points - though on considerably more volume - was Brunswick Corp., although there was no fresh news seen out on the Lake Forest, Ill.-based maker of bowling equipment, boats and other recreational products.

AMD sells $500 million

The pre-Thanksgiving week kicked off in the primary market with three issuers pricing a combined $1.3 billion, each one bringing a single tranche of notes.

Advanced Micro Devices, Inc. priced a $500 million issue of 8 1/8% eight-year senior unsecured notes (B2/B) at 89.796 to yield 10% on Monday.

The yield printed on top of the yield talk. The issue price came in line with price talk specifying approximately 10 points of original issue discount.

J.P. Morgan Securities Inc. and Citadel Securities were joint bookrunners.

Proceeds, along with existing cash, will be used to fund a tender for the Sunnyvale, Calif.-based computer technology company's 5¾% convertible senior notes due 2012. Remaining proceeds, if any, will be used for general corporate purposes.

Digicel plays to junk, EM buyers

Also pricing a $500 million deal on top of price talk was Caribbean wireless company Digicel Ltd.

Digicel's new 8¼% eight-year senior notes (B1//B-) came to market at 98.625 to yield 8½% on Monday.

Credit Suisse, Citigroup and JP Morgan were joint bookrunners for the quick-to-market sale.

Proceeds will be used to refinance the company's 9¼% notes due 2012, in what a syndicate source characterized as a debt-neutral deal that was "aggressively" priced.

Salem prices $300 million

Also pricing atop price talk was Salem Communications Corp.

The Christian broadcaster priced a $300 million issue of 9 5/8% seven-year senior secured second-lien notes (B2/B) at 99.365 to yield 9¾%.

Bank of America Merrill Lynch and Barclays Capital Inc. were joint bookrunners for the debt refinancing deal.

Central European sets talk

Looking ahead to a Tuesday, Poland's Central European Distribution Corp. (CEDC) set price talk for its $870 million equivalent offering of seven-year senior secured notes (B1/B+).

The dollar-denominated tranche of notes is talked at the 9¼% area. The euro-denominated tranche is talked at the 9% area.

The books close at 6 a.m. ET on Tuesday, with pricing to follow at the New York open.

The Rule 144A for life deal is being led by left bookrunner Goldman Sachs & Co.

Citigroup and Deutsche Bank Securities are joint bookrunners.

Proceeds from the bonds and a stock offering will be used to purchase Lion Capital's remaining stake in Russian Alcohol Group and to repay debt, including Central European Distribution's outstanding secured notes due 2012.

New AMD bonds bounce higher

When the new Advanced Micro Devices 8 1/8% notes due 2017 were freed for secondary dealings, a trader saw them having firmed sharply to the 93-94 level - well up from 89.796, where the bonds had priced earlier in the session. A little later on, he said he saw them having gotten as high as 94¼ bid.

Another trader pegged the new bonds up by 3½ to 4 points at 93½ bid, 94½ offered, "so that thing traded up quite a bit. It's moving up."

A second trader saw the new bonds at 94¼ bid, 94¾ offered.

At another desk, a trader quoted the AMD bonds in a 933/4-94½ context, which he called "a nice pop."

Noting the fact that the bond had priced at a steep discount of more than 10 points to par, he suggested that the new issue "is like a zero-coupon bond, with a coupon attached." Noting that it has been quite a long time since the junk market had seen an actual zero-coupon bond - another one of those structures which fell out of favor with bondholders when the markets began radically tightening up last fall - the fact that an issuer was able to price what amounts to a quasi-zero-coupon bond, he quipped could see some other types of long-shunned paper coming to market. "Next, they'll be throwing contingent interest in."

Neither the new Digicel deal, nor Salem Communications' offering, meantime, priced in time for any kind of an aftermarket, traders said.

Easton-Bell again excels

A trader said Easton-Bell Sports' new 9¾% senior secured notes due 2016 "definitely traded up" again on Monday, as they had when the $350 million issue had priced on Friday.

He said the bonds were trading during the morning at 1013/4-102¼ type levels. "The front end has been trading tighter, as you can imagine."

The Van Nuys, Calif.-based sports equipment company's deal - upsized from the originally announced $325 million - had priced Friday at 98.765 to yield 10%, broke later that session at 1011/2, and then had quickly moved up to above the 101 mark at the end of the day.

Easton-Bell's new deal traded Monday at 101¾ bid, 102 5/8 offered around mid-morning, another trader chimed in, but added that he did not see the credit after that.

Koppers climb continues

A trader said that Koppers Inc.'s 7 7/8% notes due 2019 were trading during the morning around par bid, 100¼ offered, "the last market I saw actively," up from around 99 5/8 bid, 99¾ offered seen late Friday.

The Pittsburgh-based chemical company had priced its $300 million offering earlier Friday at 98.311 to yield 8 1/8%, and the bonds had moved to above 99 later that session.

"There was a par bid this morning for a few million," the trader said, "so that bond is up 13/4."

Another trader quoted the new bonds at 99½ bid, par offered.

A third trader saw the bonds at par bid, but said he had not seen any offer level at that price.

Cloud Peak not so energetic

On the other hand, a trader said that he last saw Cloud Peak Energy Resources LLC/Cloud Peak Energy Finance Corp.'s $600 million two-part deal "offered in the Street on Friday at par - I didn't see anything today" in the Gillette, Wyo.-based coal company's issue. "Nothing," he reiterated, agreeing with the suggestion that the new deal didn't seem to be going anywhere.

A second trader quoted the company's 8¼% notes due 2017 at 99 bid, 99¾ offered, versus the 99.268 level at which the $300 million of bonds had priced on Friday to yield 8 3/8%.

He also saw the company's $300 million of 8½% notes due 2019 at 99½ bid, 100½ offered, versus Friday's pricing at 99.160 to yield 8 5/8%.

At another desk, a trader saw the 81/2s at 99 5/8 bid, without an offering. Earlier in the day, he had seen the bonds get as tight as 99¾ bid, par offered.

TRW trading higher

A trader saw TRW Automotive Inc.'s 7 7/8% notes due 2017 at 99¾ bid, 100¾ offered.

The Livonia, Mich.-based automotive components supplier's $250 million issue had priced last Wednesday at 99.292 to yield 9%.

Market indicators head higher

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index up ¼ point on Monday at 93 3/8 bid, 93 7/8 offered, after having been down ½ point on Friday.

The KDP High Yield Daily Index was meantime up 6 basis points on Monday to 69.62, after having slid 15 bps on Friday. Its yield narrowed by 1 bps to 8.56%, after having widened by 3 bps the previous session.

In the broader market, advancing issues led decliners for an eighth consecutive session on Monday, with their advantage remaining around an 8-to-7 margin.

Overall market activity, as measured by dollar-volume, rose 5% from Friday's pace.

"The market felt firm," a trader said, as "everything traded up a little bit," but apart from trading in the new issues there was "not really" all that much going on. "A few issues have definitely traded up, with this market being firmer - and I still don't know why it's going up - but I think we're going to see this kind of general pattern until year-end, with everyone taking vacations."

He said the overall activity on Monday "definitely felt like it was up by ¼ to ½ [point], though on lighter volume - but there was still some activity. People were getting what they needed to do before the Thanksgiving holiday," which will likely see sharply reduced pre-holiday activity on Wednesday - it being officially a "full" session not withstanding - with the U.S. fixed-income markets entirely shuttered on Thursday and operating on only an abbreviated schedule, with skeleton crews in at most places that are even open on Friday.

However, the trader said, despite the desire of market participants to clean up whatever loose ends remained, "you saw some quiet times out there today. It was a long day."

"It's been pretty much quiet," a second trader said, "and I think this week is going to be very, very quiet."

Lyondell leaps on buyout bid

A trader said he saw Lyondell Chemical's bonds "up anywhere from 8 to 10 points, just generically bid for," on the news that India's Reliance Industries Ltd. had made a non-binding offer - estimated in the business media at anywhere from $10 billion to $12 billion - for the Houston-based chemical company's bankrupt parent, LyondellBasell Industries AF SCA.

Another trader also saw the bonds up between 9 and 11 points on the day, quoting the 10¼% notes due 2010 in an 80-83 context, up 10 points - which he said would cover its other issues like the 9.80% notes due 2020 and its 7.55% notes.

He further quoted the 7 5/8% notes due 2026 of the old Millennium Chemicals - bought by Lyondell in 2004-2005 -- at 20-22, opining that "it's got to be up the same type 8 to 10 points."

Traders noted that while the point gain was impressive, activity in Lyondell was restrained, with just a couple of big-block trades accounting for all of the gains.

A market source saw the 101/4s trading at 82 and the 9.80s at 81, on a round-lot basis, up about 10 or 11 points, although there were some smaller-sized trades later on below those peak levels.

A strike for Brunswick

Several market sources saw brisk late-session activity in Brunswick Corp.'s paper, particularly its 9¾% notes due 2013. Those bonds were seen having jumped to levels above 114, before coming back down to settle in right at 114 - a good 3 or 4 points on the day - with almost all of the trading coming in large round-lots.

There was no fresh news seen out about the company, which makes bowling equipment, operates bowling alleys, and also makes pleasure boats and billiard equipment.

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