Martin prices, trades near issue; Fairpoint, Tervita next; Virgin busy again on Liberty news

By Paul Deckelman and Paul A. Harris

New York, Feb. 6 - Martin Midstream Partners LP priced a $250 million issue of eight-year notes on Wednesday. The new bonds were anchored around their issue price when trading began.

The midstream petroleum and by-products company's deal was the only dollar-denominated, junk-rated transaction to come to market, representing a slowing of the pace seen earlier in the week.

The euro-denominated market meantime saw several pricings during the day, including from German industrial equipment manufacturer KION Group GmbH, which upsized its planned offering to €650 million, adding a tranche of floating-rate notes to the original fixed-rate notes.

And French laboratory operator Labco SAS brought a €100 million add-on deal to its existing 2018 notes.

Back among the dollar-denominated borrowers, price talk emerged on telecommunications company Fairpoint Communications, Inc.'s $300 million offering of 6.5-year secured notes, which is expected to price on Thursday.

High-yield syndicate sources were also expecting Canadian environmental services company Tervita Corp.'s $850 million equivalent dual-currency secured notes deal to price on Thursday.

In the secondary market, it was another busy day for Virgin Media Finance plc's bonds, with the official news that Liberty Global Inc. will acquire Virgin's parent company. Those bonds had also been busy on Tuesday on market speculation - later vindicated - that such a deal was in the works. Liberty, meantime, unveiled its plans to tap the debt market to help fund the giant media deal.

Statistical measures of junk market performance extended their recent losing streak yet again.

Martin Midstream atop talk

Just one dollar-denominated high-yield deal priced during Wednesday's primary market session.

Martin Midstream Partners LP and Martin Midstream Finance Corp. priced a $250 million issue of eight-year senior notes (B3/B) at par to yield 7¼%.

The yield printed on top of yield talk.

Wells Fargo was the left bookrunner for the debt refinancing. BofA Merrill Lynch, RBC, RBS and SunTrust were the joint bookrunners.

Virgin rolls out £2.3 billion

Virgin Media began an international roadshow on Wednesday for its £2.3 billion equivalent multi-tranche bond offer, which is expected to price before the end of the week.

Lynx I Corp. intends to place £1,717,700,000 equivalent of eight-year senior secured notes (expected ratings Ba3/BB-). Target sizes are £1,100,000,000 and $1,000,000,000.

Meanwhile Lynx II Corp. intends to place £578,000,000 equivalent of 10-year senior unsecured notes (expected ratings B2/B), in tranches with target sizes of £300,000,000 and $450,000,000.

Global coordinator Credit Suisse will bill and deliver. Barclays, BNP Paribas, BofA Merrill Lynch and Deutsche Bank are joint bookrunners.

Proceeds will be used to help finance the acquisition of Virgin Media by Liberty Global Inc.

Dell could open the spigot

Meanwhile Dell Inc. expects to use proceeds from $3.25 billion of bonds and get a new $7.5 billion credit facility to help fund the acquisition of the company by Michael Dell, founder, chairman and chief executive officer, and Silver Lake.

BofA Merrill Lynch, Barclays, Credit Suisse and RBC are the leads.

A fund manager whose portfolio includes junk bonds and bank loans lamented that much of the business coming into the new issue market right now is comprised of refinancings and repricings.

"You are being taken out of good-paying paper as you get into new, lower-paying paper," the source remarked.

"And with all of the cash that's coming in, right now, it's as difficult as ever to stay invested.

"What we need is the LBO market to heat up, so that there are actually some deals that bring new paper without taking you out of existing paper.

"Dell just might open the spigot."

Tervita talks downsized bonds

Tervita Corp. shifted $250 million of proceeds to its credit facility from its concurrent bond offer, downsizing its offering of senior secured notes due November 2018 (B2/B-) to $850 million equivalent from $1.1 billion equivalent.

The Calgary, Alta.-based company also set price talk for the notes.

A dollar-denominated tranche with a minimum size of $500 million is talked with a yield in the 8% area.

Meanwhile a Canadian dollar-denominated tranche, the final size of which also remains to be determined, is talked to yield 75 basis points to 87.5 bps behind the dollar-denominated notes.

The books close at 2 p.m. ET on Thursday, and the notes are set to price thereafter.

Joint global coordinator and physical bookrunner RBC will bill and deliver. Goldman Sachs is a joint global coordinator and joint bookrunner. TD and Deutsche Bank are also joint bookrunners.

FairPoint talks secured notes

FairPoint Communications talked its $300 million offering of 6.5-year senior secured notes (B2/B) to yield 8½% to 8¾%.

The order books are set to close at noon ET on Thursday.

Morgan Stanley, Credit Suisse and Jefferies are the joint bookrunners.

KION upsizes, adds floater

The European high-yield primary market continued to generate news on Wednesday.

Germany's KION Group priced an upsized €650 million two-part seven-year senior secured notes transaction (B2/B/).

The deal included an upsized €450 million tranche of fixed-rate notes which priced at par to yield 6¾%.

The tranche was increased from €350 million. The yield printed on top of yield talk.

KION also added a €200 million tranche of floating-rate notes to the transaction. Those notes priced at 99.5, and will pay a coupon of three-month Euribor plus 450 basis points.

Global bookrunner BofA Merrill Lynch will bill and deliver for the debt refinancing deal. Deutsche Bank was also a global bookrunner.

BNP Paribas, Commerzbank, Goldman Sachs, KKR and UniCredit were joint bookrunners.

Elsewhere in the European market, France's Labco priced a €100 add-on to its 8½% senior secured notes (existing ratings B3/B+/) at 103 to yield 7.753%.

Barclays, Deutsche Bank and Natixis were the joint bookrunners for the quick-to-market deal.

And Germany-based do-it-yourself retailer Hornbach-Baumarkt AG talked its €250 million offering of seven-year senior notes (Ba2/BB+) with a yield in the 4½% area.

Commerzbank, HSBC and UniCredit are the leads.

Corus sells split-rated deal

There was also Canadian primary market news on Wednesday.

Corus Entertainment Inc. priced C$550 million of seven-year senior guaranteed notes (/BB+/DBRS: BBB) at par to yield 4¼%.

The split-rated debt refinancing deal was led by TD and BMO.

And Alliance Grain Traders Inc. talked its C$125 million offering of five-year senior secured second lien notes (/B/DBRS: B) with a yield in the 8¾% area.

The deal, via Scotia, CIBC and GMP, is set to price on Thursday.

Martin trades near issue

In the secondary market, a trader initially did not see any dealings in Martin Midstream Partners' new 7¼% notes due 2021, but later on said that the bonds had broken around par bid, 100½ offered.

A second trader saw the Kilgore, Texas-based midstream petroleum and by-products company's new deal at 99¾ bid, 100¾ offered, right around its par issue price.

Revlon in retreat

Tuesday's new deal from Revlon Consumer Products Corp. was seen by a pair of traders at different shops to have retreated from the initial aftermarket levels seen after that deal had priced.

They said the New York-based cosmetics company's 5¾% notes due 2021 dropped back to 99¾ bid, par offered from the previous session's levels in a par to 100¼ bid context.

The quick-to-market deal had priced at par, after having been upsized

Genesis off highs

Another issue which priced on Tuesday was Genesis Energy, LP's 5¾% notes due 2021. The Houston-based oil and gas exploration and production company's quickly shopped $350 million offering had priced at par after having been upsized from an originally announced $300 million, and then firmed smartly, with one trader seeing the bonds having gone home at 101¾ bid, 102¼ offered and a second pegging them above the 102 bid mark.

On Wednesday, a trader said that the new deal had come in by ½ point on the bid side, locating it at 101¼ bid, 101 5/8 offered.

Caesars holds steady

Monday's megadeal from Caesars Entertainment Corp. was seen by a trader to be hanging around the levels seen on Tuesday, when those 9% notes due 2020 had gone home at 98 5/8 bid, 98¾ offered.

On Wednesday, he quoted the Las Vegas-based casino giant's $1.5 billion add-on to its existing '20s at 98 5/8 bid, par offered.

That was up from the 97.5 level at which the company's Caesars Operating Escrow LLC and Caesars Escrow Corp. subsidiaries had priced that quick-to-market deal to yield 9.497%. The bonds had come to market too late in the day on Monday for any trading at that time.

The existing 10% notes due 2018 issued by the former Harrah's Entertainment were down for a second consecutive session Wednesday, losing ¾ point to close at 66 bid, after having dropped by as much as 2¾ points on Tuesday.

The Harrah's 11¼% notes due 2017 were going out at 106½ bid.

Vector gain continues

One of Monday's other pricings, for Miami-based tobacco and real estate holding company Vector Group Ltd., was seen up solidly for a second straight session on Wednesday.

A trader said the bonds were finishing at 101¼ bid, 101½ offered, calling them up 3/8 point on the day

That $450 million of 7¾% senior secured notes due 2021 had priced at par Monday after the deal was upsized from an originally announced $375 million. The issue came to market too late in the session for an initial aftermarket.

However, when they finally began trading on Tuesday, the new bonds moved up to 100 7/8 bid, 101 1/8 offered.

Securitas Direct flat

Among recently priced euro-denominated issues, Securitas Direct AB's three-month Euribor plus 650 basis points series A floating-rate notes due 2018 traded "where they were issued" at 101, according to a bond source on Wednesday.

Securitas Direct sold a €100 million add-on to the notes at 101 on Jan. 31.

The Malmo, Sweden-based company provides monitored home alarm systems.

Odigeo up

Odigeo's €325 million issue of 7½% senior secured notes due 2018 edged up to 99¾ bid on Wednesday, a London-based bond source said.

The notes had traded at 99½ bid, 100½ offered on Friday.

The Barcelona, Spain-based online travel services provider Odigeo's special purpose vehicle and issuing entity, Geo Debt Finance SCA, sold the notes at par on Jan. 23.

Arrow Global dips

Arrow Global Finance plc's £220 million issue of 7 7/8% senior secured notes due 2020 traded lower at 983/4, a bond source in London said.

The company sold the seven-year notes at par on Jan. 22.

Arrow Global Finance is a Manchester, England-based purchaser of defaulted consumer debt.

Virgin very active, again

For a second straight session, bonds of Virgin Media plc were among the most active junk issues, spurred by the news, officially announced Tuesday night, that international media tycoon John Malone's Liberty Global Inc. will acquire Virgin, a New York-based provider of television, phone and internet service in the United Kingdom in a nearly $24 billion cash and stock deal.

The bonds had gyrated around at mostly lower levels on Tuesday on expectations such a deal would be announced.

On Wednesday, a trader saw the company's 5¼% notes due 2022 at 101 1/8 bid, 101 3/8 offered, calling them about unchanged on the session.

He saw Virgin's 4 7/8% notes due 2022 as having moved up to 101 1/8 bid, 101¼ offered from prior levels around par bid, 100½ offered.

A market source saw the latter bond topping the Junkbondland most actives list for a second straight session Wednesday, with over $58 million having changed hands by mid-afternoon. On Tuesday, volume in the credit had topped the $68 million mark.

Market measures continue slide

Statistical junk market performance indicators were losing ground for a third consecutive session Wednesday and for the sixth session in the last seven.

The Markit Series 19 CDX North American High Yield fell by 3/16 point on Wednesday to end at 102 bid, 102¼ offered, after having gained 5/16 point on Tuesday.

The KDP High Yield Daily Index suffered its third straight loss, dropping 6 basis points on Wednesday to close at 75.30, after having tumbled 18 bps on Tuesday.

Its yield rose for a third straight session, up 1 bp to 5.68%, after having widened by 5 bps on Tuesday.

And the widely followed Merrill Lynch High Yield Master II index dropped by 0.011% on Wednesday, its third straight retreat, which followed Tuesday's 0.102% downturn.

Wednesday's loss dropped its year-to-date return to 1.188% from Tuesday's 1.20%. It was also well down from its peak level for 2013 so far of 1.991%, set last Monday, Jan. 28.

Cristal Cody contributed to this review

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