Lamar, Nexstar, ManTech price; crowded calendar for Friday; junk funds take in $417 million

By Paul Deckelman and Paul A. Harris

New York, April 8 - For the first time in three days, there were no super-sized mega-deals pricing in Junkbondland. But primaryside players saw ample action on Thursday.

Lamar Media Corp. priced a $400 million drive-by offering of eight-year subordinated notes, but the Baton Rouge, La.-based outdoor advertising company's deal came too late in the day for any kind of aftermarket trading.

That was also seen with Nexstar Broadcasting Inc./Mission Broadcasting Inc.; the Irving, Tex.-based television station company priced a $325 million offering of seven-year senior secured notes, but that issue too came to market too late for any kind of secondary action.

However, that was not the case for ManTech International Corp., which priced a $200 million offering of eight-year notes at par earlier in the day, high yield syndicate sources said. When the Fairfax, Va.-based information technology company's new deal was freed for secondary dealings, traders saw the bonds move higher.

Syndicate sources heard price talk emerge on a slew of forward-calendar deals expected to price on Friday - Integra Telecom Holdings Inc.'s $500 million of six-year senior secured first-lien notes, Radiation Therapy Services Inc.'s $310 million tranche of seven-year senior subordinated notes, Patheon Inc.'s $280 million issue of seven-year senior secured notes and American Residential Services LLC/ARS Finance Inc.'s $150 million offering of five-year senior secured second-lien notes.

Also seen pricing Friday with talk heard out on Thursday - just hours after the deal surfaced on investors' radar screens - is a $150 million add-on offering from Houston-based natural gas operator NFR Energy LLC.

Out of Europe came word that Spanish construction company Obrascon Huarte Lain, SA will hit the road Monday on the Continent to market a benchmark-sized issue of five-year notes.

Junk funds gain $417 million

As trading was winding down for the session, market participants familiar with the weekly high yield mutual fund-flow numbers compiled by AMG Data Services of Arcata, Calif. - considered a reliable barometer of overall junk market liquidity trends - said that in the week ended Wednesday $417 million more came into those weekly-reporting high yield funds than left them, a sign of continued investor support for the junk market.

It was the seventh consecutive weekly cash infusion. Since that winning streak started in late February, $3.429 billion has come into the funds in that time, according to a Prospect News analysis of the AMG figures, including the latest inflow and the $296.7 million cash injection seen in the previous week, ended Wednesday, March 31.

In the 14 weeks since the beginning of this year, inflows have now been seen in 11 of those weeks and outflows in the remaining three, including two massive cash hemorrhages seen in mid-February, each of them north of $900 million, that totaled $1.9 billion, according to the Prospect News analysis.

The mutual funds have more than fully bounced back from that big cash exodus to show a year-to-date cumulative net inflow of $3.072 billion, according to the analysis - a new peak level for the year, eclipsing the old mark of $2.655 billion seen the previous week.

The year-to-date fund flow totals have gyrated between that new peak cumulative inflow level and a net outflow of $357 million seen in the week ended Feb. 17, which had been the first such year-to-date net loss for the funds since early April of 2008, according to the analysis.

EPFR sees $669 million cash gain

Another fund-tracking service - Cambridge, Mass.-based EPFR Global, whose methodology differs somewhat from AMG - meantime also reported that some $669 million more came into the funds than left them in the latest week.

That cash infusion followed the $972 million inflow seen in the previous week. Following the pattern of the AMG figures, the EPFR statistics have now shown seven straight weeks of inflows, lifting the funds from their two-week rut in the Feb. 10 and Feb. 17 weeks which had seen some $1.76 billion of combined outflows.

Reflecting the difference in the way AMG and EPFR calculate their respective fund-flow totals, the latter - which includes results from certain non-U.S. domiciled funds as well as the domestic funds - said that on a year-to-date basis, the mutual funds are now showing around a $5.5 billion net inflow, the peak level for the year.

Any and all cumulative fund-flow totals, whether for AMG or EPFR, can include unannounced revisions and adjustments to figures from prior weeks.

The flow of money into and out of the junk bond funds is seen as a generally reliable barometer of overall high yield market liquidity trends - although they comprise less of the total monies floating around the high yield universe than they did in the past. Last year's strong pattern of inflows - with AMG reporting over $20 billion having come in to the weekly-reporting funds over the course of the year, along with over $10 billion more into funds which only report on a monthly, rather than weekly basis, and EPFR posting similarly robust numbers - was seen as a proxy for the overall surge of liquidity into the junk market from all sources, which helped to fuel record 2009 new-issuance of over $160 billion and unprecedented secondary returns topping 57%.

Lamar prices at tight end

The primary market saw three issuers, each bringing a single tranche of notes, raise $923 million on Thursday.

Meanwhile, the stage was set for a $1.5 billion-plus Friday session, as price talk surfaced on a handful of deals set to price before the weekend.

Lamar Media Corp. priced a $400 million issue of eight-year senior subordinated notes (B1/B+) at par to yield 7 7/8% on Thursday.

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

JP Morgan ran the books for the quick-to-market deal.

Proceeds will be used to fund a tender for the company's 7¼% senior subordinated notes due 2013.

Nexstar brings $325 million

Nexstar Broadcasting, Inc. and Mission Broadcasting, Inc. priced a $325 million issue of 8 7/8% seven-year senior secured second-lien notes (B3/B-) at 99.364 to yield 9%.

The yield printed on top of the price talk.

Bank of America Merrill Lynch, UBS Investment Bank, Deutsche Bank Securities and RBC Capital Markets were joint bookrunners.

Proceeds, together with borrowings under Nexstar's and Mission's amended senior secured credit facilities, and cash on hand, will be used to repurchase Nexstar's outstanding senior subordinated PIK notes, to refinance Nexstar and Mission's credit facility, and for general corporate purposes.

ManTech comes tight to talk

ManTech International Corp. priced a $200 million issue of eight-year senior notes (Ba2/BB+) at par to yield 7¼%.

The yield printed at the tight end of the 7¼% to 7 3/8% price talk.

Bank of America Merrill Lynch and J.P. Morgan Securities Inc. were the joint bookrunners.

Proceeds will be used for general corporate purposes and to support future growth through acquisitions. As an interim measure, the company will pay down existing funded debt on its $350 million revolver, which will remain in effect following the offering and which matures in April 2012.

Talking the deals

The stage was set for what figures to be a busy Friday session, as a handful of prospective issuers set price talk during the Thursday session.

Integra Telecom Holdings, Inc. talked its $500 million offering of six-year senior secured first-lien notes (B2/B-) to yield in the 10¾% area.

Deutsche Bank Securities Inc., Goldman Sachs & Co., Jefferies & Co. and Morgan Stanley & Co. Inc. are the joint bookrunners.

Radiation Therapy Services, Inc. talked its $310 million offering of seven-year senior subordinated notes (Caa1/CCC+) to yield 10% to 10¼%, including an original issue discount of 1 to 2 points.

Wells Fargo Securities, Bank of America Merrill Lynch and Barclays Capital are joint bookrunners.

Patheon Inc. talked its $280 million offering of seven-year senior secured notes via JP Morgan to yield 8½% to 8¾%.

American Residential Services LLC and ARS Finance, Inc. talked their $150 million offering of five-year senior secured second-lien notes (B2/B) to yield in the 11¾% area.

UBS Investment Bank is the left bookrunner. Jefferies & Co. is the joint bookrunner.

Finally, NFR Energy LLC and NFR Energy Finance Corp. talked a $150 million add-on to their 9¾% senior unsecured notes due Feb. 15, 2017 to yield 9¾% to 10%.

The books close at noon ET on Friday.

UBS Investment Bank is the left bookrunner. Bank of America Merrill Lynch, JP Morgan and BNP Paribas are joint bookrunners.

Proceeds will be used to repay the Houston-based oil and gas exploration and development company's outstanding senior secured revolver, to fund land acquisitions and for general corporate purposes.

The original $200 million issue priced at 98.733 to yield 10% on Feb. 9, 2010. That issue was downsized from $250 million.

ManTech moves up

When the new ManTech International 7¼% notes due 2018 were freed for secondary dealings, a trader said that the new bonds got as good as 101 5/8 bid, 101 7/8 offered, but "then they came in a little versus the highs," to finish at around 101¼ bid.

A second saw the bonds move as high as 102, before finishing at 100¼ bid, 101¾ offered.

Another trader, however, saw the bonds going home "wrapped around 102," versus the par level at which the $200 million issue had priced earlier in the day. "ManTech did pretty well," he declared.

ManTech was the only one of the day's pricings to make it to the aftermarket; both the Nexstar Broadcasting 8 7/8% senior secured notes due 2017 and the Lamar Media 7 7/8% senior subordinated notes due 2018 priced too late for secondary dealings.

Freescale comes back

Traders saw Freescale Semiconductor Inc.'s new 9¼% senior secured first-lien notes due 2018 having strengthened a little after Wednesday's up-and-down aftermarket performance.

A trader saw the Austin, Tex.-based computer-chip manufacturer's new bonds as having "moved up a little" to around 101, versus levels around 100 3/8 bid, 100½ offered. The bonds had priced at par on Wednesday, then advanced to 101 bid, before coming off that peak to return to the issue price and then nose up slightly from there to close out Wednesday's dealings.

Another trader saw the new bonds come back up to around 101 bid, 101¼ offered.

LIN up a little

Another deal from Wednesday, Providence, R.I.-based television station owner and digital media company LIN Television Corp.'s 8 3/8% notes due 2018, was seen by a trader "right around 101," which he called up a point on the day from the par level at which that $200 million issue had priced.

Another trader pegged the bonds at 100¾ bid, 101 offered.

Valmont shows value

A trader said that Valmont Industries Inc.'s 6 5/8% notes due 2010 spent "most of the day" at 101 1/8 bid. That was well up from the 99.998 level at which the Omaha-based maker of metal light poles, tower structures and mechanical irrigation systems had priced its split-rated (Ba1/BBB-) $300 million tranche of bonds, upsized from the originally shopped $250 million, in a drive-byoffering.

Market indicators turn northward

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index up by ¼ point on the session Thursday, pegging it at 99 bid, 99¼ offered, after having lost ¼ point in Wednesday's dealings.

The KDP High Yield Daily Index meantime gained 6 basis points on Thursday to end at 72.17, after having held steady on Wednesday, while its yield tightened by 3 bps Thursday to 7.78%, after having narrowed by 1 bp on Wednesday.

Advancing issues led decliners on Thursday, although the previous session's roughly seven-to-six advantage had dwindled to just a couple of dozen issues out of the more than 1,500 tracked.

Overall market activity, represented by dollar-volume levels, was up 2% on Thursday from levels seen the previous session

A trader said that "everything was new-issue driven," as aftermarket trading in the new deals continued to overshadow the established bonds.

Traders were mixed as to the impact that Thursday's telecast of the Masters professional golf tournament had on trading activity levels, since televised sports events - especially big ones such as the much-awaited return to the links of Tiger Woods - usually provide a distraction and seem to give some market participants an excuse for doing nothing.

One trader acknowledged that was probably the case on Thursday, with Woods' teeing off coming right in the middle of the afternoon.

However, another said that despite that distraction "activity was fair - it wasn't stellar by any means, but it was busier than earlier in the week," when some people were still straggling back from the three-day weekend.

GM lower in busy dealings

A trader saw "a lot of activity" in General Motors Corp.'s benchmark 8 3/8% bonds due 2033, which "bounced around a little," trading in a range between 34 and 36, on "good volume." He saw the bonds going out at 35 bid, 35½ offered, which he said was around where they had traded on Wednesday, but with "a lot of volume today."

A market source at another desk said that by mid-afternoon, nearly $40 million of the benchmark bonds had traded, making them clearly the day's volume leader. Another source said the final tally was over $55 million, calling the bonds down ½ point around 35, while its 7.20% notes due 2011 lost more than a full point, also in busy dealings, to end at 34 bid.

Trader said that the benchmarks had traded between 34 and 35, finally settling around the latter number, which he said was down "about another 1/2" point, while seeing the 7.20s down 1½ points at 34. "So yeah, they're off, still."

On Wednesday, GM's bonds had skidded down to around the 37 level from prior levels as high as the 36 area after the top U.S. carmaker released its numbers for the 2009 year following its emergence from bankruptcy last summer.

In releasing what it termed its "fresh-start" accounting for the period between July 10 and Dec. 31, the company reported revenue of $57.5 billion and a net loss of $4.3 billion. The loss includes a $2.6 billion pre-tax impact related to the settlement loss of its UAW retiree medical plan, as well as a $1.3 billion foreign currency re-measurement loss.

Traders seemed to ignore the positive news contained in the GM announcement, including the fact that the carmaker said it had generated $1 billion in cash from operating activities, remained committed to repaying the outstanding balance of the bailout funds it received from the Canadian and U.S. governments "by June 2010 at the latest" - and envisioned possibly turning a profit for the current full-year period.

Ford falters a little

A trader meantime saw GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 as having "sort of tailed off" to end at 91½ bid, 92½ offered, down ½ point on the session. He said that the Number-Two U.S. carmaker's paper "went on a wild ride," gyrating at time at bid levels between 91½ and 92½ - with "a couple of small pieces lower" - before settling in "on decent size" at the lower end of that range. "That's where they traded," he declared - "in that range, both sides of it and in the middle."

A second trader said that Fords "were pretty active," with the 7.45s around 92, which he called down 5/8 to ¾ point on the day.

Massey struggles in disaster aftermath

A trader said that Massey Energy Co.'s paper "has been pretty active since that stuff [i.e. the West Virginia mining disaster in which more than two dozen coal miners were killed on Monday] went down."

He saw its 6 7/8% notes due 2013 at 98½ bid, 99 offered, which he called "maybe down another ½ today, but kind of hanging in there at this point." He said the bonds were "pretty active," with an estimated $15 or $20 million, or possibly even more, having traded.

However, another trader saw the Richmond, Va.-based coal company's bonds quoted as high as par - up nearly 2 points from some of the levels seen on Wednesday.

Gaming gains on good Vegas numbers

In the gaming arena, a trader saw "strength in the casino names, on the back of the monthly numbers out of Las Vegas." He saw improvement in Harrah's Operating Co. and particularly in its cross-town rival MGM Mirage, noting that the latter's New York Stock Exchange-traded shares were up more than 10%, at $14.73, on volume of some 98 million shares, nearly four times the norm.

He said that Las Vegas-based MGM Mirage's unsecured notes, like its 6 5/8% issue due 2015 were a point or two higher on the day at 84 bid, 85 offered. He said that the company's secured bonds, like its 13% notes due 2013 - currently hovering above 116 - "are unchanged, but they traded a bunch tighter to begin with."

Another trader said that Harrah's paper "looked pretty active," with the Las Vegas-based casino giant's 10% notes due 2018 seen at 84¼ bid, although he said that looked unchanged. The first trader, meantime, saw the paper up a point at that same 84ish level.

Nevada's Gaming Control Board said Thursday that revenue on the all-important Las Vegas Strip jumped by around one-third in February from a year earlier to $568 million for the month, up from $427 million a year earlier. With The Strip leading the way, overall statewide gambling revenue rose by about 14% to $947 million.

Among the factors boosting the latest February figures versus a year ago were the easy comparisons, since February 2009 revenues had fallen sharply from their year-earlier comps due to the economic problems prevalent at that time.

Another factor was the added gaming revenues generated by MGM Mirage's newest casino resort, the Aria, which the company rolled out in mid-December to anchor to its massive new CityCenter development project.

The state officials also noted a surge in revenues from baccarat - a high-stakes card game popular among high-rolling "whales," as big players are known. Baccarat win on the Strip soared by 255% year over year; without those revenues, overall casino numbers would have shown a decline, since slot machine revenues were off by 8%.

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