Cablevision, American Axle drive-bys price; MF Global plunges, bounces off lows after filing

By Paul Deckelman and Paul A. Harris

New York, Oct. 31 - The high-yield primary market picked up on Monday right where it left off at the end of last week, continuing to price opportunistically timed, quickly shopped offerings from well-known issuers.

The big deal of the day was Cablevision Systems Corp.'s radically upsized 10-year megadeal, which came to market just hours after the cable systems operator and professional sports team owner announced its plans for a benchmark-sized issue.

The deal priced too late in the session for any kind of an aftermarket.

Earlier Monday, automotive components maker American Axle & Manufacturing Holdings, Inc. drove by with a $200 million issue of eight-year paper. The new bonds parked by their par issue price when they were freed to trade.

That also was where Friday's big deal - $1.25 billion from Ford Motor Credit Co. - continued to trade on Monday.

But as was the case on Friday, much of the market's attention was focused, not so much on the new deals, but on troubled MF Global Holdings Ltd., whose bonds went into freefall on news that a rescue plan for the financial firm had fallen through, forcing it into bankruptcy.

That paper later bounced off its bottom to end only a few points lower - but trading flat, without its interest - on very heavy volume.

MF's troubles helped to push both stocks and junk bonds lower on the day, with the latter's statistical performance measures, which had moved solidly to the upside last week, in retreat on Monday.

Cablevision doubles size

The October-November crossover week got under way with a pair of quick-to-market issuers pricing a tranche apiece on Monday, raising a combined $1.2 billion.

CSC Holdings, LLC, a subsidiary of Cablevision Systems, priced a massively upsized $1 billion issue of 10-year senior notes (Ba3/BB) at par to yield 6¾%.

The deal doubled in size from the $500 million amount that was announced early Monday morning.

Although the yield printed in the middle of the 6 5/8% to 6 7/8% official price talk, the deal came wide to initial guidance, which was in the mid-6% range, according to a syndicate source.

The managers were J.P. Morgan, Barclays, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, Natixis, RBC, RBS, Scotia, SunTrust, UBS and US Bancorp.

The Bethpage, N.Y.-based media and telecommunications company plans to use the proceeds to refinance debt and for general corporate purposes.

American Axle drives by

American Axle & Manufacturing Holdings priced a $200 million issue of non-callable eight-year senior notes (B1/B) at par to yield 7¾%.

The yield printed at the tight end of the 7¾% to 8% price talk.

J.P. Morgan and Bank of America Merrill Lynch were the joint bookrunners for the drive-by debt refinancing.

CNH Capital's $500 million

The Monday session also saw a buildup of the forward calendar.

CNH Capital LLC announced plans to price a $500 million offer of non-callable five-year senior notes during the present week.

Credit Suisse, Bank of America Merrill Lynch and BNP Paribas are the joint physical bookrunners.

The Burr Ridge, Ill.-based company, the financial services business of CNH Global NV, plans to use the proceeds for general corporate purposes including debt repayment and the purchase of receivables or other assets.

Faurecia starts roadshow

The European primary market also generated news during the Monday session.

French automotive equipment supplier Faurecia SA began a roadshow on Monday for its €300 million offering of five-year senior notes (Ba3//).

The roadshow for the debt-refinancing deal wraps up on Thursday.

BNP Paribas and Credit Agricole CIB will bill and deliver.

BNP, Credit Agricole and Natixis Bleichroeder are the global coordinators.

BNP, Credit Agricole, Natixis and SG CIB are the joint bookrunners.

HSBC and Mitsubishi UFJ are the co-managers.

Com Hem unsecured deal

On the heels of its successful placement of Swedish kroner-denominated secured notes late last week, Swedish cable operator Com Hem will begin a roadshow on Tuesday in London for a €287 million offering of eight-year senior unsecured notes (expected ratings Caa1/CCC+).

Goldman Sachs, Deutsche Bank, Morgan Stanley, UBS, Bank of America Merrill Lynch and Nordea are the joint bookrunners.

The proceeds will be used to help fund BC Partners' acquisition of Com Hem from Carlyle Group.

Last Thursday, Com Hem priced an SEK 3.5 billion issue of 9¼% seven-year senior secured notes (B1/B) at 96.938 to yield 9 7/8%.

That deal was also part of the acquisition financing.

American Axle settles in

A trader at first said that he had not "heard boo" on the Detroit-based automotive drive train components manufacturer's new $200 million issue.

However, a little later on, he reported that after having priced at par, American Axle's bonds initially moved as high as 101¼ bid on a few trades before coming off that peak.

He said the majority of the paper that did trade did so around the 1001/2-to100 5/8 area "until recently."

He saw the new bonds going home at 100¼ bid.

A second trader saw the bonds at 100¼ bid, 100¾ offered.

No aftermarket for CSC

The second trader also said that he had not seen any activity in the new upsized CSC Holdings' 10-year notes, which came to market very late in the day, pricing at par.

There also was not much trading seen in the Bethpage, N.Y.-based cable and sports team operator's existing bonds. Several series of which are scheduled to be taken out via a tender offer to be partly funded by the company's new bond and bank debt.

A market source said that CSC's 8½% notes due 2015 moved up more than 2 points on the day from the 106½ level at which the bonds had closed on Friday. However, trading volume was very muted with only about $2 million actually changing hands. That was the most active of the three sets of notes being bought back in that tender.

CSC's 8½% notes due 2014 also moved up about 2 points to 111 bid, but only on a couple of odd-lot pieces. And no trading at all was seen in the third bond being tendered for the 6 ¾% notes due 2012. It was last previously traded at 102 bid.

CSC's 8 5/8% notes due 2019, which is not being taken out via the tender offer, was down a deuce, at 1131/2, but again trading was very thin.

Parent Cablevision's 8½% notes due 2020 were quoted more than 2 points lower on the day at 105½ bid.

New Ford issue steady

A trader said that Friday's 3 7/8% notes due 2014 from Ford Motor Credit were holding near the par level at which the Dearborn, Mich.-based financial arm of Ford Motor Co. had priced its $1.25 billion drive-by deal.

He quoted the bonds at 99 7/8 bid, 100 1/8 offered.

Another trader quoted the bonds right at par "give or take one-eighth of a point, depending on what time of day it was."

He said the new Ford Credit issue was one of the busiest bonds of the day with more than $56 million of the three-year paper changing hands.

A third trader said that parent carmaker Ford's 7.45% bonds due 2031 were down by three-quarters of a point at 118¼ bid, 119¼ offered.

'Kind of an MF day'

But as impressive as the volume on the new Ford Credit issue was, it paled in comparison with the really big trader of the day: MF Global Holdings.

A trader said that between the faltering New York-based investment banking firm's 6¼% notes due 2019, its 9 3/8% bonds due 2038 and its two convertible issues - the 1.875% notes due 2016 and the 3.375% notes due 2018, "gazillions" of the bonds traded.

Another trader was a little more specific. He said that more than $200 million of the 61/4s changed hands.

He said that first thing this morning, the bonds were trading down at 35, which was well below the levels around 50 at which they had gone out on Friday.

That initial movement, in fact, replicated Friday's activity pattern, which saw the notes fall to 35 from a 50 opening before creeping back up into the upper 40s, with almost $200 million trading.

On Monday, the trader said the bonds initially plunged, but then "fought their way back up." The bonds first traded at 38 to 42, but eventually climbed back to the closing levels around 48½ bid.

In view of the company's bankruptcy filing, the trader said the bonds began trading flat or without the accrued interest.

The trader noted that bonds typically begin trading flat if the company misses an interest payment. But in this case they technically never made a coupon payment, at least not on the 61/4s.

The company priced an upsized $325 million of the notes at par on Aug. 2 with the first coupon scheduled for this coming February.

"Once you declare bankruptcy, it protects you from having to make a coupon payment, so that's why everybody trades them flat," after a bankruptcy filing, the trader said.

"It was an MF kind of a day," another trader declared, seeing the two straight bond issues trading around 49 bid, 50½ offered; and the converts in a 47-49 context. Both levels were well below where those bonds had traded last week.

One of the traders noted that "the high-grade guys are all dumping it. Prior to last week, the bonds were rated investment-grade by all three of the major agencies.

"And the junk and distressed guys are coming in," the trader said.

"Now the thing is rated 'D,' and if you're one of these accounts that can't own something rated like that or a non-performing asset, you've got to dump it."

In the short-space of three months, "This bond went from investment-grade to garbage. It looks like there's going to be a lot of lawsuits flying around" from disgruntled investors, the trader said.

"It's one messy picture," he opined.

The meltdown of MF Global began last week when Moody's Investors Service downgraded the firm, citing its heavy exposure in the billions of dollars to Europe's troubled sovereign-debt issues.

The hits continued on last Tuesday on the back of disappointing earnings and didn't let up through the rest of the week.

News reports out last week indicated that the company - led by former Goldman Sachs chairman and ex-New Jersey Gov. Jon Corzine - had found a buyer for some of its assets.

But over the weekend, that deal fell through, which lead the company to file.

Interactive Brokers Group Inc. was the reported prospective buyer.

Additionally, the New York Federal Reserve suspended the firm from conducting new business with the central bank and CME Group Inc. ICE Futures U.S. and Singapore Exchange all halted the broker's operations in some form.

On the news, Standard & Poor's dropped its rating to D from BBB-.

The world beyond MF

Apart from the MF Global debacle, a trader said that Clear Channel Communications Inc. paper had traded slightly better after the San Antonio-based media company released quarterly results.

But, the paper ended the day "virtually unchanged, characterizing the results as being in line with expectations," the trader said.

He saw the 10¾% notes ending at 72-74, its 11% notes at 66-68 and its 9% notes due 2021 at 88-891/2.

In the mortgage insurance sphere - recently roiled when Arizona state officials seized the assets of PMI Group - a trader saw MBIA Inc.'s 14% surplus notes due 2033 down 1 point at 47-49. He estimated that Radian Group Inc. and MGIC's paper was likely also quoted lower because "as one goes, so they all go."

MGIC's 5 3/8% notes due 2014 were perhaps ¼ point off at 63 1/2-64 1/2, while Radian's bonds eased by 1 point to 56 - 58.

Stephanie N. Rotondo contributed to this report

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