Upsized Cimarex Energy deal prices; Intelsat drops on LBO fears as owners shop company

By Paul Deckelman and Paul A. Harris

New York, April 17- Cimarex Energy Co. priced an upsized and "many times oversubscribed" offering of 10-year notes on Tuesday, junk bond syndicate sources said. Secondary traders meantime saw those bonds firming smartly after they were freed for aftermarket activity.

Mobile Mini Inc. is meantime expected to launch a $125 million high-yield deal, either later this month or early next, while French cable manufacturer Nexans SA is seen bringing a new euro-denominated bond offering to market, perhaps as early as next week.

In the secondary sphere, traders saw the bonds of Intelsat Ltd. losing altitude on the news that the satellite communications operator is being shopped around by its private-equity owners - and investor fears that a leveraged buyout transaction would sharply lever the company up.

On the other hand, statements by Ford Motor Co.'s chairman that the troubled automotive giant attempted to sell itself last year - one of many options it investigated - and could conceivably pursue that course sometime in the future - had little or no impact on the company's bonds.

In the distressed debt arena, Delta Air Lines Inc.'s bonds sere seen continuing to move upward, as the bankrupt Atlanta-based Number-Three airline operator gets ever closer to its anticipated April 30 emergence from Chapter 11.

A senior high yield syndicate official said that the broad market was up a touch on the day.

Cimarex's nearly $3 billion of orders Cimarex

Tuesday's sole junk transaction came form Cimarex Energy.

The company priced an upsized $350 million offering of 10-year senior notes (B1/BB-) at par to yield 7 1/8%, in the middle of the 7% to 7¼% price talk.

JP Morgan and Lehman Brothers were joint bookrunners for the deal, which was upsized from $300 million.

An informed source said that the book contained just under $3 billion of orders.

The source added that the market is in very good shape, especially for existing issuers.

The official also expressed the expectation that the new issue calendar would begin to build, but added that it would likely do so at a "reasonable" rate.

Nexans brings €300 million

Paris-based manufacturer of telecommunications cable Nexans will start an investor roadshow on Monday for its €300 million offering of bullet notes (BB), which is expected to come with a maturity of between seven years and 10 years.

BNP Paribas, SG Corporate & Investment Banking and UBS Investment Bank are leading the general corporate purposes - including debt refinancing - deal.

Mobil Mini's $150 million

Phoenix-based portable storage solutions provider Mobile Mini, Inc. is expected to launch a $125 million offering of senior notes late this month or early in May.

Deutsche Bank Securities and CIBC World Markets will be joint bookrunners for the debt refinancing deal, the exact structure of which remains to be determined.

Junk to back Universal Hospital acquisition

Part of the acquisition of Universal Hospital Services, Inc. by Bear Stearns Merchant Banking is expected to be financed through the issuance of new high-yield bonds.

On Monday the Edina, Minn.-based provider of medical equipment lifecycle services announced that it has entered into a definitive agreement to be acquired by the private equity affiliate of The Bear Stearns Companies, Inc. for $712 million, in a transaction which is expected to close during the present fiscal quarter.

Peermont talks two-parter

South African gaming and lodging firm, Peermont Global, has set price talk on its ZAR 5.866 billion equivalent two-part bond offering, which is expected to price on Wednesday.

Peermont Global's ZAR 4.979 billion equivalent euro-denominated seven-year senior secured notes (B3/B) are talked at the 7 7/8% area. The deal size, on an exchange adjusted basis, is approximately €520 million.

Meanwhile Peermont Global II (Pty.) Ltd. has set talk for its ZAR 887 million offering of eight-year senior PIK notes at 18% to 18¼%.

Citigroup is the bookrunner for the acquisition financing.

Finally, an informed source said that price talk on Pfleiderer Finance BV's €200 million to €250 million offering of perpetual subordinated hybrid bonds (B1//BB-) should emerge on Wednesday.

ABN AMRO and Barclays Capital have the books for the deal from the Neumarkt, Germany, forest products company.

Cimarex climbs in secondary

When the new Cimarex Energy 7 1/8% senior notes due 2017 were freed for secondary dealings, traders said that the bonds quickly "popped up," as one said, to 101.5 bid, 102 offered from their par issue price earlier in the session.

A second trader also saw the bonds climbing to those higher levels.

Among other recently priced names, one of the traders saw KAR Holdings Inc.'s billion-dollar-plus issue of new bonds still hanging in at 102.5 bid, 103 offered, also well up from the prices at which the several tranches of bonds had been issued last Wednesday.

And he also said Realogy Corp.'s new multi-part issue, which "at one point last week was at its lows, [has] drifted back up to par."

Secondary activity muted

Back among the established issues, the trader called Tuesday "a pretty light day, again," adding that "the market still seems to be firm. We're still kind of moving around in sympathy with the equity markets, which have been relatively strong" - especially so on Tuesday in the wake of the government's release of unexpectedly tame inflation data, which encouraged stock and bond investors to hope that the Federal Reserve Board will take a less hawkish view on inflation and forego any new interest-rate hikes.

He said that "the activity in the derivatives market," such as CDS contracts that require the surrender of the underlying junk bonds, "is still creating demand [for paper] in the cash market that hasn't been fulfilled."

He saw "nothing really standing out.

"It would be tough to tell you that there was a lot happening today."

Intelsat bonds dip

One area where there seemed to be a lot going on was in the bonds of Intelsat, seen lower on leveraged buyout fears.

A trader saw the company's 6½% notes due 2013 down 2 points at 84.5 bid, 85.5 offered, citing those LBO concerns.

Another market source quoted those bonds at 84.75, calling that down 2 3/8 points on the session.

Yet another source saw a similar-sized fall, leaving the bonds at 85 bid, while the company's 7 5/8% notes due 2012 were pegged down 3½ points at 91.5 bid, with both issues among the most actively traded bonds of the day. However, its Intelsat (Bermuda) 11¼% notes due 2016, though also actively traded, gyrated around within a 1 point range before closing unchanged on the day at 113.625.

The bonds were roiled by speculation that the company was up for sale, with buyout specialist The Blackstone Group LP said to be a leading potential buyer.

The Wall Street Journal reported that owners Apax Partners Worldwide LLP, Permira Advisers LLP, Madison Dearborn Partners LLC and Apollo Management LP might reap as much as $6 billion for the company - more than 10 times the $515 million which they paid for it back in 2003

The Journal noted that about a year after it was acquired by those private-equity firms, Intelsat bought rival communications satellite operator PanAmSat Holding Corp. for $3.2 billion. This created the world's biggest satellite operator - but left the company saddled with about $11 billion of long-term debt.

Bondholders fear that an LBO for Intelsat now will only add to the size of that debt burden, while pushing the bonds further down in the capital structure below any new bank debt which is issued to fund the buyout.

Ford steady despite buyout possibility

The notion of a buyout, on the other hand, did not spook investors in Ford Motor Co.'s bonds, with the Dearborn, Mich.-based company's 7.45% notes due 2031 seen holding steady at 78 bid, 79 offered.

Company chairman Bill Ford, Jr. reportedly told Conde Nast's Portfolio Magazine that the auto giant considered a sale of the company, partnership or other transaction last year when it was trying to see how to restructure its debt. And Ford said that it was not ruling out a sale or other transaction at some point in the future.

Remy, Dana up, Delphi steady

Also in the automotive realm, a trader said Remy International Inc. "moved today," with the company's bonds "up a couple of points," including the 8 5/8% notes due 2007 at 93-94. He said that although he "saw them quoted up, I didn't see a lot of trading. At least they were better bid - but on not a lot of volume."

He also saw the company's subordinated 9 3/8% and 11% issues up 1½ points at 33-34.

At another desk, a trader called the 11s up 2 points at 33 bid, 34 offered, while the 8 5/8s were a point better at 93-94.

Also among the automotive names, Dana Corp. "moved up a little," a trader said, despite not seeing any fresh news out on it. He saw Dana's 7% notes due 2008 and 2029 up ½ to 1 point at 80-81, while the 6½% notes due 2009 were a point better at 83.25-83.75.

Another trader noted a Bloomberg report late in the day that quoted unidentified sources as saying that Cerberus Capital Management LP may withdraw its $3.4 billion offer for Delphi Corp. "because it doubts that the bankrupt auto-parts maker can generate sufficient profits to make the investment pay off." However, with trading pretty much over at this point, he said it would have no impact - at least on Tuesday - on Delphi's bonds.

Delta flies higher

A trader said "some things bounced around" - and saw the bonds of troubled Delta Air Lines Corp. and Northwest Airlines Corp. higher.

He saw Delta's 8.30% notes due 2029 up 1½ points at 60.75 bid, 61.5 offered, and saw Northwest's 10% notes due 2009 a point higher at 89.5-90.5.

Standard & Poor's Ratings Services said on Monday that it was keeping its default corporate credit rating on the airline, despite overwhelming creditor support for the company's proposed reorganization plan.

The agency did note, however, that it expects to assign a "highly speculative" or B rating on Delta once it emerges from bankruptcy. The airline has said it is aiming for an April 30 emergence.

Fremont holds firm

Fremont General Corp. was seen holding onto the big gains which it had notched during Monday's session on news that it will sell most of its remaining subprime loans as it extricates itself from that problem-plagued business - investors apparently unfazed by the potential impact of the company's disclosure that its chief executive officer had sold a big bloc of Fremont stock at the start of the year - a few weeks before the bottom began to fall out of the once-lucrative field of selling mortgages to borrowers with poor credit .

The 7 7/8% notes due 2009 were unchanged at 96 bid, 97 offered, traders said.

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