Revlon bonds firmer on tender news; Revlon, Metris slate deals; awaiting Charter mega-deal

By Paul Deckelman and Paul A. Harris

New York, April 19 - Revlon Consumer Products Corp. bonds were heard to have firmed modestly Monday in response to the announcement by the New York-based cosmetics company that it would be tendering for $555 million of outstanding notes in three series as part of its ongoing efforts to beautify its balance sheet.

Those efforts include plans to sell $400 million of new senior unsecured notes, one of several calendar items that emerged during a session which didn't see anything as having priced by the closed. Another issue moving onto the calendar was Metris Cos. Inc., which starts shopping a $250 million five-year deal Wednesday.

Even though high-yield transaction terms were heard during the opening primary market session of the April 19 week, the primary bristled with news of potential issuers positioning themselves in and near the new issue pipeline. And the preponderance of those potential issuers are either euro deals, or are deals that have substantial European components and/or roadshows.

"We have not seen this in quite a while," said one American sell-side source as news piled up Monday on activity in the euro pipeline.

"It's always been a one-way street, meaning European high yield company's assets in the U.S. market," the source added.

"Now European high yield issuers seem to be able to price euro and dollar-denominated issues. NTL even priced a sterling tranche," the source added, pointing to the £811 million equivalent four-tranche offering in three denominations that New York City-based NTL Cable priced on April 2.

"We're seeing multi-currency, multi-tranche deals," the official added. "That was not the case in 2003. The European high yield was pretty quiet at this time last year.

"Now it's becoming white hot. Every day it seems like you're hearing another new euro deal."

Cognis coming with €745 million

Leading Monday's parade in terms of European action was German specialty chemicals manufacturer Cognis, which will run an April 22-28 European roadshow for €745 million equivalent of Rule 144A/Regulation S notes (expected B).

A U.S. roadshow will kick off on April 29, with pricing expected during the week of May 3.

Goldman Sachs & Co. and JP Morgan will run the books.

Issuer Cognis KG is selling €300 million of 9.5-year second lien floating-rate notes. The floaters will become callable after one year at 104, after two years at 102, and par thereafter.

And Cognis GmbH will sell €445 million equivalent in euros, with a possible dollar tranche, of 10-year non-call-five fixed-rate senior secured notes.

Meanwhile a four-day roadshow starts Thursday for a deal from Hanover, Germany-based diversified travel industry company TUI AG, which is selling €350 million of unrated seven-year bullet notes.

The deal will be marketed in Europe, and then in the U.S.

The Royal Bank of Scotland, Commerz and WestLB are joint bookrunners on the debt refinancing offering.

The notes will come with a 0.75% coupon step up if they remain unrated after 18 months.

A roadshow is expected to get underway during the week of April 26 for LBC's €150 million of high yield notes, via Deutsche Bank Securities and Lehman Brothers.

The chemical storage company will use the proceeds to finance the LBO of the company by One Equity Partners from Fimalac for €243 million.

And a little further into the future, the third quarter of 2004, Princeton, N.J. chemical manufacturer Rockwood Specialties Inc. is expected to bring a €400-€500 million high yield offering.

Credit Suisse First Boston, Goldman Sachs & Co. and UBS Investment Bank will be the underwriters for the acquisition financing.

Metris sole dollar-only announcement

In a day when almost all of the primary market news concerned the new issue pipeline, the only roadshow start heard for a dollar-denominated deal came from Minnetonka, Minn.-based bankcard issuer Metris Cos. Inc., which will begin a roadshow Wednesday for $250 million of five-year senior secured notes.

The debt refinancing deal, via Goldman Sachs & Co., Deutsche Bank Securities and Banc of America Securities, is expected to price on Wednesday, April 28.

Talk on CHC, Premcor

Price talk of 7 3/8%-7 5/8% emerged Monday on CHC Helicopter Corp.'s planned sale of $250 million of 10-year senior subordinated notes (B2/B), expected to price on Wednesday morning via Merrill Lynch & Co.

And price talk was also heard on Premcor Refining Group Inc.'s $400 million of senior notes in two tranches which are expected to price late Tuesday, via Credit Suisse First Boston, Morgan Stanley and Citigroup.

Talk is for a yield in the 5¾% area on the seven-year bullets and a yield of 6%-6¼% on the 10-year non-call-five notes.

Also on Monday details were heard on the Polypore Inc.'s $400 million equivalent offering of eight-year non-call-four senior subordinated unsecured notes (Caa1/B-).

The North Charleston, S.C. manufacturer of specialized microporous filtration products will run a European roadshow throughout the present week with a U.S. roadshow to follow beginning on April 26, with pricing expected during the week of May 3.

The company plans to sell $200 million and €165 million offerings of the notes via JP Morgan.

Revlon deal news boosts existing junk

Finally on Monday Revlon Consumer Products Corp. announced in a press release that it plans to sell $400 million new senior unsecured notes.

Citigroup and JP Morgan will be the bookrunners on the Rule 144A offering, according to a market source.

No timing or note structure were announced in the press release. And the company, a subsidiary of New York City-based Revlon, Inc., did not return a telephone call from Prospect News.

Waiting for Greenspan, Charter

In the secondary market, a trader said "not much was going on," quipping that people are "waiting for Uncle Greenspan," with the Fed chief scheduled to testify Tuesday on the state of the economy, "and waiting for Charter."

Ahead of the new deal, the St. Louis-based cable operator's existing bonds were seen as "firm," he said, quoting its 8 5/8% notes due 2009 at 85 bid, 86 offered.

Another trader agreed that Charter's existing bonds "are up, even though they're bringing a new deal," apparently on investor feeling that the big deal is a positive, as it will show that despite its well publicized problems Charter can still attract bond investors and will also give the company more liquidity and financial flexibility to get rid of some of its higher interest debt. Charter plans to use the proceeds to refinance bank debt at some of its subsidiary companies.

Revlon up a little

Another company that has had some problems and is trying to clean up its balance sheet is Revlon, which on Monday announced plans to purchase some $555 million of notes: its $363 million principal amount of outstanding 12% senior secured notes due 2005, its $116.2 million principal amount of remaining outstanding 8 1/8% senior notes due 2006, and its $75.5 million principal amount of remaining outstanding 9% senior notes due 2006 (see Tenders and Redemptions elsewhere in this issue for full tender offer details).

The tender offers are the latest step in the cosmetics maker owned by New York billionaire Ronald O. Perelman to try to turn its financial situation around, following a successful stock-for-debt exchange that concluded last month which took $800 million of indebtedness off the books, including most of the company's 8 1/8% and 9% notes.

But there was no great rush into Revlon as there had been after the initial announcement of the earlier offer, back in February; the bonds, he said were "up a point, at best."

The biggest winner, he said, was the 8 5/8% subordinated notes due 2008, which are not being tendered for; those, he said were a point better at 94.5 bid, 95.5 offered.

The 12% notes, he said, were at 114-114.25 , the anticipated takeout level when the price of the bonds will be set, while the 8 1/8% notes and the 9% notes "are trading wherever they will be taken out (101.604 for the 8 1/8% notes and 103.25 for the 9s)."

At another desk, the 8 5/8s were seen at 93 bid, although the source there said that represented a one-point move, and saw the 8 1/8s up a point at 101, the 9s up better than two points at 102.75, and the 12s in the 113-114 region.

Elsewhere, there was little or no movement in the bonds of Cole National Corp., which got an unsolicited $25 per share buyout bid from Moulin International. Cole, a Twinsburg, Ohio-based company that operates the Pearle Vision Centers chain of eyewear stores, had previously gotten a takeover bid from Luxottica Group, which the company says remains in effect, although it will mull over Moulin's move.

A trader saw the company's 8 5/8% notes due 2007 101.75 bid, 102.75 offered, their prior levels, or "maybe just a little higher."

"There were a few traders here and there," a market source, "but overall, things were quiet.

He saw Delta Airlines paper continuing to fall in the wake of last week's news that the Atlanta-based air carrier's chief financial officer is leaving, quoting its 7.90% notes due 2006 at 60 bid, down from 63, and its 8.30% bonds due 2029 at 52 bid, down from 55.

Another trader agreed that the "airlines were still sloppy," although he pegged the Delta bonds as having fallen to 51 bid, 52 offered, from 52.5 bid 53 offered on Friday.

Continental Airlines bonds eased in possible sector sympathy, its 8% notes due 2005 off a half at 94 bid.

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