Giant HCA deal leads $4.6 billion pre-holiday primary, Precision, Polypore deals firm solidly

By Paul Deckelman and Paul A. Harris

New York, Nov. 10 - With Junkbondland and the other fixed-income markets in the United States set to close for the Veteran's Day holiday on Thursday, high yield primaryside players shifted into high gear on Wednesday to price nine new deals carrying a collective face value of $4.6 billion, making it the busiest session this week, this month and the busiest in many weeks.

Leading the way was hospital operator HCA Holdings Inc.'s $1.525 billion offering of 101/2-year notes. The quickly-shopped deal initially traded below its issue price, but traders said that by the end of the day its condition had improved and it was back above par.

Berry Plastics Corp. came in with an $800 million offering of 10-year secured notes, which was seen trading a little above issue in the aftermarket.

There were also deals from a pair of Canadian oilfield service sector names - Precision Drilling Corp. and Calfrac Holdings, LP. Each priced an upsized offering of 10-year senior notes off the forward calendar. When the bonds went into the secondary, Precision popped by more than 2 points and the Calfracs gained a least a point.

Also on the upside in the aftermarket was a $365 million drive-by offering from Polypore International Inc.

New issues also priced from Global Crossing Ltd., Mercer International Inc. and Mobile Mini Inc., with the latter two appearing too late in the day for any kind of trading around.

Away from the new issues Seitel Inc.'s bonds were on the upside for a second straight session on good quarterly numbers from the Houston-based provider of seismic services to the energy industry. General Motors Corp.'s bonds gyrated around, even as the recovering carmaker posted a $2 billion quarterly profit.

For the first time in a while, market performance measures were all pointing southward.

HCA prices $1.525 billion

The primary market saw $4.565 billion face amount of issuance on Wednesday, as nine issuers each priced a single tranche.

However the intense new issue volume began to be reflected in Wednesday's executions, sources said.

Two of the nine transactions priced wide of price talk, three priced at the wide end, and three priced on top of price talk. Only one priced at the tight end.

HCA Holdings priced a $1.525 billion issue of 10.5-year senior notes (Caa1/B-/CC) at par to yield 7¾%, on top of the price talk.

Citigroup Global Markets Inc. was the left bookrunner for the quick-to-market dividend deal. Bank of America Merrill Lynch, J.P. Morgan Securities LLC, Barclays Capital Inc., Credit Suisse Securities, Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley & Co. Inc. and Wells Fargo Securities were the joint bookrunners.

Berry Plastics at wide end

Berry Plastics priced an $800 million issue of 10-year second priority senior secured notes (Caa1/CCC) at par to yield 9¾%, at the wide end of the 9½% to 9¾% price talk.

Credit Suisse Securities, Barclays Capital, Bank of America Merrill Lynch and Goldman, Sachs & Co. were the joint bookrunners for the debt refinancing deal.

Precision Drilling prices

Precision Drilling priced an upsized $650 million issue of 10-year senior notes (Ba2/BB+) at par to yield 6 5/8%, 12.5 bps beyond the wide end of the 6 3/8% area price talk.

Credit Suisse and RBC Capital Markets were the joint bookrunners for the debt refinancing and general corporate purposes deal.

The company shifted $100 million to the bonds from its planned new revolver, reducing the size of the revolver to $550 million from $650 million.

Calfrac upsized

Calfrac Holdings priced an upsized $450 million issue of 10-year senior notes (B2/B+) at par to yield 7½%, on top of the price talk. The amount was increased from $400 million.

RBC Capital Markets and Morgan Stanley were joint bookrunners.

Proceeds will be used to repurchase the company's 7¾% senior notes due 2015, to repay bank debt and for general corporate purposes, including future capital expenditures.

Polypore drives by

In an a.m.-to-p.m. Wednesday drive-by, Polypore International priced a $365 million issue of seven-year senior notes (B3/B-) at par to yield 7½%.

The yield printed at the tight end of the 7½% to 7¾% price talk.

J.P. Morgan Securities LLC, Goldman Sachs & Co. and UBS Investment Bank were joint bookrunners for the debt refinancing deal.

Mercer sells $300 million

Mercer International priced a $300 million issue of seven-year senior notes (B3/B) at par to yield 9½%, at the wide end of the 9¼% to 9½% price talk.

RBC Capital Markets and Credit Suisse were the joint bookrunners for the debt refinancing deal.

Mobile Mini at the wide end

Mobile Mini priced a $200 million issue of 10-year senior notes at par to yield 7 7/8%, at the wide end of the 7¾% area price talk.

Deutsche Bank Securities Inc. was the left bookrunner for the debt refinancing. Bank of America Merrill Lynch was the joint bookrunner.

Global Crossing wide of talk

Global Crossing priced a $150 million issue of nine-year senior notes (/CCC+/) at par to yield 9%, 37.5 basis points beyond the wide end of the 8½% area price talk.

Credit Suisse and Goldman Sachs & Co. were joint bookrunners for the debt refinancing.

Star Gas matches talk

Finally, Star Gas Partners LP priced a $125 million issue of 8 7/8% seven-year senior notes (B2/B-) at 99.35 to yield 9%.

The yield printed on top of the 9% area price talk.

J.P. Morgan Securities LLC ran the books.

The Stamford, Conn-based home heating oil company plans to use the proceeds to redeem its 10¼% notes due 2013 and for general corporate purposes.

Allen Systems sets talk

Among upcoming deals, Allen Systems Group Inc. talked its planned $300 million offering of six-year senior secured second-lien notes (B3//) with a 10½% area yield on Wednesday.

The deal is set to price on Friday.

Bank of America Merrill Lynch has the books for the debt refinancing and dividend-funding deal.

Burlington starts roadshow

Burlington Coat Factory Warehouse Corp. is marketing a $500 million offering of eight-year senior notes on an investor roadshow that is scheduled to run through Monday.

Goldman Sachs & Co. is the left lead bookrunner. J.P. Morgan Securities LLC, Bank of America Merrill Lynch and Wells Fargo Securities are joint bookrunners.

The Burlington, N.J.-based department store retailer will use the proceeds to repay its term loan, to repurchase or redeem its 11 1/8/% senior notes due 2014 and the parent company's 14½% senior discount notes due 2014, as well as to make a distribution to the company's equity holders, and for general corporate purposes.

American Media exit financing

AMO Escrow Corp. and American Media Operations, Inc. began a roadshow on Wednesday for a $475 million two-part seven-year secured notes offer.

The deal features a $385 million tranche of first-lien senior secured notes and a $90 million tranche of second-lien senior secured notes.

J.P. Morgan Securities LLC has the books for the deal to fund the company's exit from bankruptcy.

ClubCorp plans $415 million

Elsewhere, ClubCorp Club Operations, Inc. announced plans to price a $415 million offering of eight-year senior notes late in the week ahead.

Citigroup is the bookrunner.

Proceeds, along with new credit facilities, other funds received in connection with reorganization transactions, and cash on hand, will be used to repay debt under the company's existing credit facilities.

Nortek for Nov. 15 week

Nortek, Inc. plans to price a $300 million issue of eight-year senior notes during the middle part of the week ahead.

Bank of America Merrill Lynch, Credit Suisse and UBS Investment Bank are the joint bookrunners.

The Providence, R.I.-based diversified building products manufacturer will use the proceeds to redeem and/or repurchase a portion of its 11% notes due 2013 and for general corporate purposes, including but not limited to acquisitions.

Thermadyne secured deal

Thermadyne Holdings Corp. will begin a roadshow on Veterans Day for a $250 million offering of seven-year senior secured notes (expected ratings B3/B-).

The roadshow wraps up on Nov. 17.

Jefferies & Co. and RBC Capital Markets are joint bookrunners for the LBO deal.

Even though Veterans Day is an official bond market holiday, some accounts have expressed a willingness to look at the deal on Thursday, said a source close to the transaction.

HCA deal a late bloomer

A trader quipped that "you can pretty much make up" whatever was happening outside the new-deal arena - "the world today continues to be all new issues."

A trader said that after pricing at par during the morning, the big deal of the day, HCA's 101/2-year issue, "went nowhere for a while - the bonds actually traded even a little below issue right away."

However, he said the mega-deal "got better as the day progressed," to go home trading around 100¾ bid.

A second trader agreed that the Nashville-based hospital operator's bonds seemed to get healthier as the day went on after an anemic start.

"When it first came, the bonds were trading into a par bid several times," he said, "but I think they went out at 100¾ bid, 101¼ offered."

But yet another trader, speaking still later in the day, quoted the bonds down around 1001/4.

The first trader said that there was "a decent amount" of trading in the HCA deal - but added that it was "not as much as you would have expected for $1.5 billion - but a decent amount."

Still, he concluded, the activity level was "not like some of the other ones we've seen recently, with that kind of size."

New Berry a little better

The trader said that Berry Plastics' new 10-year secured notes "really didn't go anywhere" after the Evansville, Ind.-based plastic packaging maker's transaction priced at par.

He saw the bonds trading around 100¼ bid.

"They went nowhere," he reiterated.

A second trader said that he had seen the new Berry bonds hitting a bid of 100 3/8 in the afternoon, and then heading down to around 100 1/8 bid, 100¼ offered.

Still another trader pegged the bonds at 100¼ bid, 100¾ offered.

Canadian energy deals climb

The pair of Canadian oilfield services operators' new issues, on the other hand, moved solidly higher in the secondary.

Calgary, Alta.-based Precision Drilling's new 10-year notes "traded well," one of the traders said, seeing the bonds go home bid in the 1021/4-102½ area, well up from their par issue price.

Another trader saw the bonds initially around the 101 area when they broke, but said they had moved up above 102 by the end of trading, "so they did well," echoing the first trader's sentiment.

Meanwhile, Calfrac Holdings' 10-years, which also priced at par, moved up to around the 101 bid level, a trader said, while a second saw the Calgary company's new deal edging above that to close at 101¼ bid, 101¾ offered.

Polypore pops up

Several traders saw Polypore International's seven year deal trading around the 101½ bid level in the aftermarket.

One saw no offerings, while a second saw a two-sided market at 101½ bid, 102¼ offered.

The Charlotte, N.C.-based maker of films, filters and membranes for various medical and industrial uses had priced its deal at par.

Global Crossing firms

Hamilton, Bermuda-based telecommunications company Global Crossing's new nine-year notes were quoted by a trader late in the session having firmed to 100½ bid, 101 offered.

The bonds had priced earlier at par.

Latecomers miss the aftermarket

Traders said that the new deals for Mercer International, Mobile Mini and Star Gas Partners - the latter a particularly late deal - did not price in time for any kind of aftermarket on Wednesday.

Tuesday's Mylan deal struggles

A deal which came way too late on Tuesday to trade then - Mylan Inc.'s 6% notes due 2018 - was seen finally breaking on Wednesday.

However, a trader said that the issue "didn't do too well, quoting the bonds at 98 bid, 98½ offered, versus the Canonsburg, Pa.-based specialty pharmaceutical company's 98.45 pricing level.

A second trader said that he "didn't see too much of" the Mylan deal, estimating it at 98½ bid, 98¾ offered.

A third trader agreed that for a deal of that size - $800 million - "very little was said about it, very little." He quoted the bonds at 98 5/8 bid.

Univision, WEST around issue

A trader said that two other late-appearing deals from Tuesday, Univision Communications Inc. and WEST Corp. "traded right around issue," which for both drive-by deals was par.

Univision, a Los Angeles-based Spanish-language broadcaster, priced $500 million of 8½% notes due 2021.

WEST, an Omaha, Neb.-operator of call centers, priced a $650 million issue of 7 7/8% notes due 2019

Checkout holds around issue

Another Tuesday deal seen having ventured little from around where it priced was Checkout Holding Corp., which priced $439 million face amount of new senior discount notes due 2015 to generate proceeds of $260 million for the St. Petersburg, Fla.-based targeted advertising company.

Those bonds priced at 59.276 to yield 10¾%.

A trader saw them on Wednesday bid at 591/4, with "no follow through after that."

He said that it seemed like the deal had been "on the forward calendar for a year" under the name of Catalina Marketing Corp., a subsidiary of Checkout.

He also marveled that the company would bring a straight senior discount offering, suggesting that "it's been four or five years, maybe more" since such a structure was seen in the junk precincts. "Back in the day, we saw a lot of them."

Indicators head south

Away from the new-deal world, a trader saw the CDX North American Series 15 HY index ending down 1/8 on Wednesday to finish at 101 15/16 bid, 102 1/16 offered, after having lost ½ point on Tuesday.

The KDP High Yield Daily index meantime slid by 33 basis points on Wednesday to finish at 74.91, after having fallen by 7 bps on Tuesday. Its yield ballooned upward by 15 bps on Wednesday to 7.06%, after rising by 3 bps on Tuesday.

And for the first time since Oct. 20 - 15 sessions ago - the Merrill Lynch High Yield Master II index failed to climb, falling by 0.26% on Wednesday after having risen by 0.043% on Tuesday. The retreat pushed its year-to-date return down to 15.301%, versus Tuesday's level of 15.602%, which had been its 14th consecutive new peak level for 2010.

Advancing issues fell behind decliners on Wednesday, after nine straight sessions on top. The losing issues led the gainers by a better than seven-to-six margin. On Tuesday, the advancing issues held a relatively slight edge of just a few dozen issues out of the more than 1,400 that traded, for a second straight day.

Overall activity, represented by dollar-volume levels, dwindled by 29% on Wednesday ahead of the next day's holiday, after having jumped by 80% on Tuesday from the previous day's level.

Wednesday was "a little bit of a weird day," a trader said, noting that prices on a lot of things, including many of the new issues, were off from Tuesday's closing levels early in the session, "but then they came back pretty good late in the day" from the early weakness.

Still, he said, the non-new-deal secondary market was "kind of dead. [Tuesday] was a little more active."

At another desk, a trader opined that "the market was definitely weaker on the day, by around a half-point, and more in spots, obviously."

He agreed with the proposition that with some $10 billion of new junk bonds having come to market during the first three days of the week - about $2.15 billion on Monday and $3.5 billion on Tuesday, in addition to Wednesday's more than $4 billion tally - "the market was getting a little bit of indigestion. I don't think anyone would characterize it as a trend-changer, but clearly, there is some weakness."

Go-go names go lower

For instance, he said that "Rite Aid, Sprint - those go-go names are definitely weaker today by a point or so."

Overland Park, Kan.-based wireless operator Sprint Nextel Corp.'s 6 7/8% bonds due 2028 issued by its Sprint Capital Corp. unit were ending the day at just over 90 bid, down 1 3/8 points on the day, while Sprint Capital's 8¾% bonds due 2032 lost nearly 3 points on the day to close at 104. The parent company's 6% notes due 2016 lost nearly a point on the day to close at 98.

Meanwhile, Camp Hill, Pa.-based drugstore chain operator Rite Aid's 9 3/8% notes due 2015 were down more than a deuce on the day to end around the 88 bid level.

GM gyrates despite profit

A trader said that the Motors Liquidation Corp. - i.e. General Motors - 8 3/8% benchmark bonds due 2033 were ending around 35½ bid, 36 offered, off from the 361/2-37 neighborhood seen over the last couple of days. He said the 35½ bid, 36 offered level was "pretty much where they were [Tuesday]. They stopped going up, but they held their own."

He said that the issue saw "decent volume."

At another desk, a trader said that the GM benchmark issue ended at 35¾ bid, 36¼ offered, down from 36 bid, 36½ offered on Tuesday.

But late in the day, another market source said the GM bonds were trying to rally, quoting them as having pushed as high as 37½ bid in late trading, apparently helped by the news that the carmaker had posted a $2 billion profit in the third quarter. But culling out the small odd-lot trades at higher levels as non-representative, the source saw the bonds finishing around unchanged on the session at 36 bid.

They managed to "recover a little bit towards the end," another trader said.

He saw the benchmark notes trading around 35 in early trading, but finishing around 36.

Meanwhile, its 7.20% notes due 2011 slipped as much to 343/4.

The gyrations in the Detroit automaker's debt came as the company reported a $2 billion quarterly profit on revenues of $34.1 billion.

The quarter marks GM's third consecutive profit and the company's chief executive, Dan Akerson, reiterated his expectation that the company would post its first full-year profit since 2004 in 2010.

Investors are also waiting for the company's highly anticipated initial public offering, which is expected to price Nov. 17, with trading to commence on Nov. 18.

GM domestic arch-rival Ford Motor Co.'s 7.45% bonds due 2031 meantime declined to 111 bid, 112 offered, down nearly 2 points on the day, and were well below the credit's recent highs in the 115-116 area.

Another market source pegged the Ford long bonds down 2 5/8 point on the day at 111.

Seitel strong on numbers

Elsewhere, a trader said that Seitel's 9¾% notes due 2014 were better for a second straight session, "the first full day after their earnings."

He saw the bonds having moved up on Tuesday to 94 bid, 95 offered from previous levels around 93 and from previous round-lot levels of 911/2.

On Wednesday, "they were again better," closing out at 96 bid, 97 offered.

Seitel announced Tuesday that it had cut its losses during the third-quarter to $15.9 million, versus the 2009 third-quarter net loss of $28 million.

For the first nine months of 2010, the net loss was $60.7 million versus $78.5 million a year earlier. A higher level of revenue was the primary driver of the improvement in both periods, the seismic data provider said.

Stephanie N. Rotondo contributed to this report

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