Freescale drive-by, Symbion, Norske Skog price; Arch, Teleflex ahead; Sino-Forest sours again

By Paul Deckelman and Paul A. Harris

New York, June 7 - Freescale Semiconductor Inc. priced a quickly shopped $750 million issue of 8.5-year notes on Tuesday, high-yield syndicate sources said. However, the computer chip maker's issue came too late in the day for any kind of aftermarket activity.

Earlier in the session, health-care facilities operator Symbion, Inc. priced a five-year offering of senior secured notes. As was the case with the Freescale deal, the new bonds came to market at a discount to par. Unlike Freescale, they did trade around a little, although there really wasn't much aftermarket activity.

Also pricing was a downsized euro-denominated five-year deal from Norwegian paper company Norske Skogindustrier ASA.

Price talk meantime emerged on several deals, notably Arch Coal, Inc., which is bringing a $2 billion offering of eight- and 10-year notes in support of its pending acquisition of International Coal Group Inc. That mega-deal could price Wednesday after a mid-morning book closing.

Talk also was heard on medical devices provider Teleflex Inc., whose $250 million subordinated paper deal is also expected to price Wednesday morning.

Belgian telecommunications operator Telenet Finance IV Luxembourg SCA's 10-year secured euro-denominated deal has also been penciled in for possible pricing on Wednesday.

Back in the domestic market, energy operator Endeavour International Corp. announced plans for a $250 million five-year deal.

Secondary market traders reported another blah and soggy day, with statistical indicators mostly pointing lower. And that was the direction that the beleaguered Sino-Forest Corp.'s bonds and shares were moving after Moody's Investors Service said it was considering a downgrade in the company's ratings.

Freescale drives by

The Tuesday primary market saw three issuers, each bringing a single dollar-denominated tranche, raise $1.24 billion.

Freescale Semiconductor priced a $750 million issue of 8.05% 8.5-year senior notes (Caa2/CCC+) at 98 to yield 8 3/8%.

The yield printed at the wide end of price talk that was set in the 8¼% area.

Barclays Capital Inc. ran the books for the quick-to-market debt refinancing.

The notes were 97 1/8 bid after the Tuesday close, according to a market source, who added that they had traded as low as 97 bid.

Symbion, in the middle of talk

Symbion priced a $350 million issue of 8% five-year senior secured notes (B2/B) at 98.492 to yield 8 3/8%.

The yield printed in the middle of the 8¼% to 8½% yield talk. The reoffer price came in line with discount talk of 1 to 2 points.

Morgan Stanley & Co. Inc., Barclays Capital and Jefferies & Co. Inc. were the joint bookrunners for the refinancing deal.

WireCo taps 9½% notes

WireCo Worldgroup, Inc. priced a $150 million add-on to its 9½% senior notes due May 15, 2017 at 104.75 to yield 8.063%.

Goldman Sachs & Co. and Deutsche Bank Securities Inc. were the bookrunners for the quick-to-market deal.

Proceeds will be used to prepay a portion of the company's existing term loan and for general corporate purposes.

The original $275 million issue priced at 97.529 to yield 10% on May 14, 2010

Norske Skog prices

Norway's Norske Skogindustrier priced a downsized €150 million issue of 11¾% five-year senior notes (/B-/) at 95.491 to yield 13%.

The deal was downsized from €300 million.

The yield printed at the wide end of the 12% to 13% price talk, which had been upwardly revised from previous talk in the 12% area. Initial guidance on the notes was 11% to 12%.

Citigroup, DnB NOR, SEB and Nordea were the joint bookrunners for the debt refinancing deal.

Arch Coal talks $2 billion

Arch Coal set price talk for its $2 billion dual-tranche offering of senior notes (B1/B+).

The eight-year notes are talked with a yield in the 7% area, and the 10-year notes are talked to price with a yield that is 25 basis points behind the eight-year notes.

Tranche sizes remain to be determined.

Morgan Stanley, PNC Capital Markets, Bank of America Merrill Lynch, RBS Securities Inc. and Citigroup are the joint bookrunners.

Teleflex restructures

Teleflex revised the structure of its $250 million offering of senior subordinated notes (B1/BB-), reducing the tenor to eight years from 10 years and decreasing the call protection to four years from five years, an informed source said on Tuesday.

Price talk is set in the 6 7/8% area.

Bank of America Merrill Lynch, Goldman Sachs and J.P. Morgan Securities LLC are the bookrunners.

Telenet talks floaters

In quick-to-market action from Europe, Telenet Finance IV Luxembourg talked its €300 million offering of 10-year senior secured floating-rate notes with an interest rate in the Euribor plus 400 bps area.

The deal was unveiled on Tuesday and is set to price on Wednesday.

JPMorgan and Credit Suisse are the managers for the debt refinancing.

Endeavor starts brief roadshow

Endeavor International began a brief roadshow on Tuesday for its $250 million offering of five-year senior notes (expected ratings Caa2/CCC).

Citigroup has the books for the debt refinancing and general corporate purposes deal.

Symbion bonds firm slightly

After the Symbion deal priced, several traders said that they had not seen any levels in the Nashville-based short-stay surgical facilities operator's new five-year secured notes. One of them, queried after 4 p.m. ET, said he thought that was "a little odd, because that came out an hour-and-a-half ago at least. I don't know why they're holding them up. We were looking for it before but couldn't find it."

However, at another shop, a trader saw those bonds going out at 99 bid, 99½ offered, which was up a little from the 98.492 level at which the $350 million deal priced.

There meantime was no activity in Austin, Texas-based computer chip maker Freescale Semiconductor's $750 million offering, which came to market too late for any dealings.

New Vulcan deal eases again

For a second straight session, there was little to do in terms of trading the really new deals on Tuesday, so market participants focused on paper that has recently come to market and has now moved over to the secondary side.

For instance, a trader on Tuesday saw Vulcan Materials Co.'s new 6½% notes due 2016 trading in a range of 100 1/8 to 1001/2, which he called "off a little bit with the entire market."

On Monday, those bonds had been seen trading around at 100¼ bid, 100½ offered - which in turn was well under the initial levels around 100¾ bid, 101¼ offered that the bonds had moved to on Friday. The Birmingham, Ala.-based maker of construction aggregates such as asphalt mix and concrete priced the $500 million tranche earlier Friday at par as part of its two-part deal, which was upsized to $1.1 billion from the originally announced $1 billion amount.

The other half of that deal - the $600 million of 7½% notes due 2021 - was seen by a trader on Tuesday at 100¾ bid - down from Monday's peak level of 101 5/8 bid, which matched the highs the bonds hit in the aftermarket on Friday after having priced earlier that session at par.

At another desk on Tuesday, a trader pegged the new Vulcan 6½% notes at par bid, 100½ offered, while seeing the 7½% paper at 100½ bid, 101 offered.

Endo stays strong

However, one of Friday's other deals - from Chadds Ford, Pa.-based drug maker Endo Pharmaceuticals Holdings Inc. - continued to hold its own in aftermarket dealings on Tuesday.

A trader saw its 7% notes due 2019 having gotten as good as 101½ bid, 102 offered and its 7¼% notes due 2022 at 100 7/8 bid, 101 3/8 offered.

On Monday, the 7% notes had been trading at 100 3/8 bid, 100¾ offered while the 7¼% notes were at 100¾ bid, 101 1/8 offered.

The company had priced the $500 million of 7% notes and $400 million of 7¼% paper at par very late on Friday, too late in fact for an aftermarket that day.

The overall deal size was raised to $900 million from the originally announced $700 million.

Chrysler in a ditch

A trader noted that the recent Chrysler Group LLC mega-deal - which has struggled since the No. 3 domestic carmaker priced its massive two-part issue on May 19, when both tranches priced at par and then proceeded to retreat from that point - was even further behind on Tuesday.

He noted that "a week or so ago, the bonds were around or a little under par" - but now, he said, they had fallen back to around 98 1/8 bid on both the $1.5 billion of 8% secured notes due 2019 and the $1.7 billion of 8¼% secured notes due 2021.

He said that was indicative of a new tone of caution that's been seen in the marketplace since about May.

"Folks are getting a little more selective. It's almost like they've taken their foot off the accelerator and are starting to downshift." Certainly, he added, compared with the heady days of just a couple of weeks ago, when people were jumping enthusiastically into the new deals and the secondary market was at its peak levels of the year in terms of statistical performance, "now nobody is burning rubber."

Market signs turn mixed

Away from the new-deal arena, traders called the secondary market performance mostly weak and soggy. Statistical measures of market performance, which have been lower the previous three sessions, were mixed on Tuesday, though with a downside bias.

A trader saw the series 16 CDX North American High Yield index end up 1/16 on the day Tuesday at 100¾ bid, 100 7/8 offered. It "was up earlier in the day," he noted. The index fell by 3/8 of a point for a second straight session on Monday.

The KDP High Yield Daily index lost 5 bps on Tuesday to end at 75.66 after losing 10 bps on Monday. Its yield rose by 1 bp, to 6.59%, after having widened out by 5 bps Monday.

The Merrill Lynch High Yield Master II index was lower for a fourth consecutive session, retreating by 0.114% following Monday's miniscule 0.01% loss and Friday's 0.152% setback.

That dropped the index's cumulative return to 5.607% from Monday's 5.728%. This is well down from its year-to-date peak level of 6.071%, which was reached on May 20.

Sino-Forest smacked around

For yet another day, Sino-Forest's bonds grabbed the secondary market spotlight on Tuesday.

A market source characterized its 6¼% notes due 2017 "among the bigger traders today," seeing the bonds down at least 10 points on the session at 55 bid, and earlier in the day, the paper had gotten as low as 53, versus their early levels in the middle 60s.

He saw one early trade around 68, even up several points from the mid-60s level at which those bonds had gone home on Monday, but dismissed it as completely non-representative of what was going on in the market.

He termed the market moves, as well as the continued soap opera surrounding the company, "unbelievable."

Another trader said that Sino-Forest's bonds were "down a boatload" after Moody's Investors Service said that it would review the Canadian/Chinese timber company's ratings for a possible downgrade. That bad news also caused the company's already hard-hit shares to fall even further.

The trader said that the bonds were down anywhere from 3 points to 15 points, depending upon the issue involved.

He saw its shortest-dated bonds, the 9 1/8% notes slated to come due in August, down 3 points on the session at 85 bid, 92 offered, while its 10¼% notes due 2014 swooned by a dozen points to 59 bid, 61 offered.

Two other Sino-Forest issues were also down a dozen points - the 6¼% notes due 2017, at 53 bid, 55 offered, and its busted 5% convertible notes due 2013, at 52 bid, 56 offered.

He saw its busted 4¼% convertibles due 2016 plunge by 15 points to 46 bid, 51 offered.

"Down and dirty. A lot of unfortunate positions," he said.

Moody's - examining the company in the wake of allegations from Hong Kong-based investment company Muddy Waters LLC that Sino-Forest has way overstated the value of its timber holdings - said that even though Sino-Forest "has refuted the bulk of the allegations and has set up an independent committee to investigate them, Moody's is concerned that its financial position and business plan will be negatively affected in the interim and even if they prove to be unfounded."

The company has hired PricewaterhouseCoopers to conduct an independent review of Muddy Waters' charges, which were contained in a scathing report the company put out last week, causing the company's shares to tumble and its bonds to stumble along southward. After several days of freefall, Sino-Forest on Monday issued its official reply to Muddy Waters, attempting to answer the sensational charges point by point and also noting that the company, helmed by short-seller Carson C. Block, shorted its stock and would thus be in a position to make tons of money from the big fall in the shares, which have gone from about C$18 on the Toronto Stock Exchange down to about C$4 - and the report claimed they were worth no more than C$1. The shares fell another 34% in Tuesday's dealings on 12 times the normal volume.

Also on Monday, in answer to Sino-Forest's response, Muddy Waters held an analysts-only conference call on which Block reportedly indicated that he has more evidence to buttress his claims of corporate wrongdoing.

The trader said that "they must have done a good job" in defending their research on the call, which was closed to investors and the media, given the renewed slide in the bonds and shares.

"It was the big ugly name of the day," the trader said.

Paper names steady

Elsewhere, against the backdrop of what he called "another blah day," a trader saw NewPage Corp.'s 10% notes due 2012 unchanged on the day at 40 bid, 41 offered, while seeing the Miamisburg, Ohio-based paper manufacturer's 11 3/8% first-lien senior secured notes due 2014 down a half-point at 95½ bid, 96 offered.

He meantime saw sector peer Catalyst Paper Corp.'s 7 3/8% notes due 2014 at 62 bid, 64 offered, while the Richmond, B.C.-based paper company's 11% secured notes due 2016 were likewise unmoved at 92½ bid, 94 offered, the company's upside momentum from last week's announcement of a successful amend-and-extend agreement with lenders on the company's asset-based credit facility having apparently run its course.

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