Advance Auto drives by, Lennar, AK, American Renal, Syncreon next; GM up in strong secondary

By Paul Deckelman and Paul A. Harris

New York, April 26 - Advance Auto Parts Inc. opened the new week on Monday with a $300 million drive-by offering of split-rated (Ba1/BBB-) 10-year notes aimed at the high-grade market as much, if not more so, than high yield. Also pricing was a deal from the latest in a growing line of Chinese property companies, Yanlord Land Group Ltd.

Talk came out on Lennar Corp.'s opportunistically timed $250 million of eight-year notes, announced during the morning along with a $250 million offering of convertible debt with proceeds earmarked to fund a tender for several outstanding series of bonds. Although there was chatter among some players that the Miami-based homebuilder's deal would price during the session, no terms had emerged by press time Monday evening.

Junk bond primary players meantime awaited expected pricings on Tuesday from AK Steel Corp., which is doing a $400 million 10-year deal, as well as from American Renal Holdings Inc. and Syncreon Global (Ireland) Ltd./Syncreon Global Finance (US) Inc.; price talk emerged on both of those eight-year note offerings on Monday, as well as on Reynolds Group Issuer LLC, whose $1 billion bond transaction is expected to price after the final closing of the books on Wednesday morning.

Also on the primary front, Patriot Coal Corp. announced a $250 million eight-year offering, while syndicate sources likewise heard a prospective new deal being shopped around by Lantheus Medical Imaging, Inc.

Among overseas issuers, besides Yanlord, price talk surfaced on Dutch cabler Ziggo Bond Co. BV, which is expected to price a euro-denominated mega-deal early Tuesday. Other coming deals were heard from Spain's Cirsa Funding Luxembourg SA and Argentina's Pan American Energy LLC.

Apart from the primary, traders saw widespread firmness in the junk secondary. Among the bigger gainers was General Motors Corp.'s bonds, seen up more than 2 points in brisk trading.

Yanlord prices $300 million

Chinese property developer, Yanlord Land Group Ltd. priced Monday's sole junk deal, a $300 million issue of seven-year senior notes (Ba2/BB) at came par to yield 9½%.

That matched the 9½% yield at which the deal launched earlier in the session.

HSBC, RBS and Standard Chartered were bookrunners.

Advance Auto sells split-rated deal

Meanwhile from the crossover space, Advance Auto Parts Inc. priced $300 million of 5 ¾% 10-year senior unsecured notes (Ba1/BBB-) at a spread to Treasuries of 200 basis points.

They were talked in the 212.5 bps area.

The notes priced at 99.587 to yield 5.805%.

Active bookrunner was J.P. Morgan Securities, with Bank of America Merrill Lynch passive.

Proceeds are being used to repay debt and for general corporate purposes.

Tuesday's scheduled deals

Meanwhile, the stage was set for a busy Tuesday session in the primary market.

Syncreon Global (Ireland) Ltd. talked its $300 million offering of eight-year senior unsecured notes (B3/B) to yield in the 9½% area.

The books close at 10 a.m. ET on Tuesday, and the deal is set to price mid-day Tuesday.

J.P. Morgan Securities Inc. and Goldman Sachs & Co. are the joint bookrunners.

American Renal Holdings Inc. talked its $225 million offer of eight-year senior secured notes (B2/B) to yield 8½% to 8¾%, and to price at a to-be-determined discount.

The books close at noon ET on Tuesday. The deal is set to price on Tuesday afternoon.

Bank of America Merrill Lynch, Barclays Capital Inc. and Wells Fargo Securities are the joint bookrunners.

AK Steel Corp. will host an investor call at 10:30 a.m. ET on Tuesday for a $400 million offering of 10-year senior notes.

That deal is set to price on Tuesday afternoon.

Credit Suisse and Bank of America Merrill Lynch are joint bookrunners for the debt refinancing deal.

Lennar Corp. talked a $250 million offering of eight-year senior notes (B3//) to yield 7 1/8% area, late Tuesday, according to market sources.

The deal, which is being transacted off Citigroup's high-grade desk, was expected by some market watchers to price late Monday.

However, no terms were available as Prospect News went to press on Monday night.

JP Morgan is a joint bookrunner, according to a market source.

Proceeds, along with funds from a concurrent $250 million offering of convertible securities, will be used to fund a tender for $200 million of the company's 5 1/8% senior notes due 2010, 5.95% senior notes due 2011 and 5.95% senior notes due 2013, and for general corporate purposes, which may include the repayment or repurchase of its existing senior notes or other debt.

Meanwhile in Europe, Ziggo Bond Co. BV talked its €1.2 billion offering of eight-year notes to yield in the 8¼% area.

Books close at 7 a.m. ET on Tuesday.

Credit Suisse and Goldman Sachs are joint physical bookrunners. BNP Paribas, Deutsche Bank, ING and JPMorgan are the joint bookrunners.

Reynolds Group talks $1 billion

Reynolds Group Issuer LLC talked its $1 billion offering of eight-year senior unsecured notes (Caa1//) with an 8½% area yield.

The books close at 5 p.m. ET on Tuesday, except for West Coast accounts, for whom books close at 10 a.m. ET on Wednesday. The deal is set to price after that.

Credit Suisse has the books.

Patriot Coal $250 million

Patriot Coal Corp. is expected to price a $250 million offering of eight-year senior unsecured notes (expected ratings B3/B+) on Thursday, following a brief roadshow.

Citigroup, Bank of America Merrill Lynch and Barclays Capital are joint bookrunners for the public offering.

The notes come with four years of call protection.

Proceeds will be used for general corporate purposes.

Lantheus begins marketing

Lantheus Medical Imaging, Inc. began a roadshow on Monday for a $225 million offering of seven-year senior notes.

The roadshow wraps up on May 4.

Jefferies & Co. is the bookrunner.

Credit ratings in the mid-to-high single-B range are expected to be assigned to the notes.

Proceeds will be used to refinance the company's existing credit facilities and to repurchase a portion of its outstanding preferred stock.

Cirsa starts brief roadshow

Meanwhile Spain's Cirsa Funding Luxembourg SA will begin a brief roadshow on Tuesday in Europe for a €400 million offering of eight-year senior notes (/B+/).

The roadshow is expected to conclude on Wednesday and the notes to price after that, subject to market conditions.

Deutsche Bank is the bookrunner.

The Madrid-based gaming firm is also putting in place a €30 million revolver.

Proceeds will be used to repay its existing €270 million of unsecured bonds due 2014, repay other debt, and for general corporate purposes.

Pan American plans dollar deal

Argentina's Pan American Energy LLC, Argentina branch, will start a brief roadshow on Tuesday for its dollar-denominated offering of amortizing notes (Ba2//BB-).

The roadshow wraps up on Thursday.

The notes will have an 11-year final maturity, and a 10-year average life.

Credit Agricole CIB, HSBC and J.P. Morgan are joint bookrunners.

Recent issues stay up there

Among recently priced issues, a trader said that Phillips-Van Heusen Corp.'s 7 3/8% notes due 2020, which priced on Friday at par and then moved as high as 102¾ bid, 103 offered, were "pretty much unchanged, or maybe down slightly, depending on what time of the day you were quoting them."

He saw the New York-based apparel maker's $600 million offering - upsized from the originally announced $525 million - trading in a 102 to 102½ range.

He saw no further activity in another Friday deal, Thermon Industries Inc., which had priced $210 million of 9½% senior secured notes due 2017 at par. The San Marcos, Tex.-based heat tracing equipment maker's new bonds then proceeded to firm to 102 1/8 bid, 102¾ in Friday's aftermarket.

Live Nation Entertainment's $250 million of 8 1/8% notes due 2018 were trading at 102 3/8 bid, 102 5/8 offered, about the level at which the Beverly Hills, Calif.-based concert promoter and ticket seller's new deal had reached after pricing on Thursday at par.

"Anybody that got cut back, or decided they wanted to flip out of it, they do that stuff on the first day or so," the trader said. "Everybody's kind of got their position the way they want it, and then it just sits there."

One exception, however, was Cleaver-Brooks Inc.'s 12¼% senior secured notes due 2016, which were being bid at 1011/4, although he said he had not seen any offers yet on it.

The Milwaukee-based industrial manufacturer's $185 million issue of those bonds - downsized from the originally planned $200 million - priced last Wednesday, at par. The trader expressed some surprise that an issue which had to be downsized because the underwriters couldn't get enough initial buyers was being bid higher.

The trader saw Standard Pacific Corp.'s new 8 3/8% notes due 2018 trading around the 101½ bid level; the Irvine, Calif.-based homebuilder's $300 million offering of the bonds, upsized from the originally announced $200 million, also priced at par last Wednesday.

Berry Plastics Corp.'s $500 million offering of 9½% second priority senior secured notes due 2018, which priced at par on Thursday but then went nowhere, remained in that same territory, the bonds at 99¾ bid, 100½ offered. The trader said that the Evansville, Ind.-based plastic packaging maker's deal "has not graduated to the Trading At A Premium Club yet."

Market indicators continue climb

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index gain 1/8 point on Monday to end at 101 bid, 101¼ offered, after having gained ¼ point on Friday.

The KDP High Yield Daily Index meantime was up by 10 basis points on Monday at an even 73.00, after having gained 4 bps on Friday, while its yield tightened by 6 bps to 7.49%, after having widened by 1 bp on Friday.

Advancing issues led decliners for a second straight session on Monday, holding the same better than seven-to six edge seen on Friday.

Overall market activity, represented by dollar volume, rose by 26% on Monday from levels seen the previous session.

A trader declared that "a lot of things were moving today," almost all of them to the upside.

Another opined that "we didn't have much of a primary, but there were a lot of things happening in the secondary. The tone was better, and we hit some new highs."

GM drives higher, Ford along for the ride

One of the more notable names posting gains on Monday was General Motors Corp.

A trader said that the Detroit-based top U.S. carmaker's paper "was up nicely," with its benchmark 8 3/8% benchmark bonds due 2033 a point better in a 39-39½ context, on "really good volume." GM's 8.8% notes due 2021 were up by a point on the session to the 35 5/8 mark, while its 7 1/8% notes due 2013 gained 3 points to finish at 38.

He meantime said that GM domestic arch-rival Ford Motor Co.'s bonds "didn't seem to have as much volume. He quoted the 7.45% bonds due 2031 around 93-94, which he said was up "maybe a half point," but added that "they're quoted up, no volume, really."

As for Ford's shorter paper, like its 2012 and 2013 notes, there too, there was "not much activity, just quoted higher. He pegged them up a point, with the 7% notes due 2013 at 103 bid.

He said that "GM was the volume leader in that [automotive] arena, real size trades."

A second trader also noted that GM paper "seemed to be kind of active today," quoting the benchmark bonds at 391/4, up from "either side of 38" where they had traded on Friday. While there was "lot of volume": at the 39½ level, he said that some odd-lot pieces had gotten as high as 401/4.

Another trader also noted the push above what he called the psychologically important 40 mark, noting that "this was a pipe dream a year ago," with GM mired in bankruptcy and its paper trading in the low teens, but now, "it's easy to get to."

He noted that along with GM and Ford, "all the auto components guys continue to trade up."

News reports Monday said that GM plans to announce on Tuesday that it will invest more than $850 million to upgrade five North American factories - another in a series of developments indicating that the company is confident of its continuing recovery. GM's chief executive officer, Ed Whitacre, has raised the possibility that GM could return to profitability as early as this year, while last week, GM announced that it had repaid some $4.8 billion in bailout loans from the federal government, years ahead of schedule.

The company is scheduled to make announcements of plant investments at several facilities, including one near Buffalo, N.Y., and in Ohio, Michigan and Indiana.

Meanwhile, Dearborn, Mich.-based Ford is scheduled to report first quarter earnings on Tuesday morning, with Wall Street expecting a profit of some $1.2 billion, or about 30 or 31 cents per share, on $30.5 billion in revenue - a sharp turnaround from its year-earlier loss of $1.43 billion, or 75 cents per share, on $21.4 billion of revenue. Since that year-ago loss, recorded when the nation was in the depths of its recession and the auto industry was among the hardest hit, Ford - the sole member of Detroit's traditional "Big Three" carmakers to not require a government bailout - has recorded three straight profitable quarters, looking to make it four in a row on Tuesday.

Qwest continues CenturyTel gains

Away from the autosphere, a trader said that Qwest Communications International Inc. paper, and those of its subsidiaries, remained well bid for in the wake of last week's announcement that the investment-grade rated CenturyTel Inc. plans to acquire Denver-based telecom operator Qwest in a roughly $22 billion deal that includes assumption of more than $11 billion of Qwest net debt.

He said that its Qwest Corp. floating-rate notes due in June 2013 were among the most active of junk credits, topping the 102 mark with well over $30 million having changed hands by mid-afternoon, and probably more after that point.

He meantime saw Qwest Corp.'s 8 3/8% notes due 2014, which had risen more than 2 points on the initial announcement to above the 114 mark, holding steady at 114¼ bid, 114½ offered.

Another market source saw the parent company's 7½% notes due 2014 up nearly a point at just below the 103 level, in busy trading.

Otter Tail's tale

A trader saw Otter Tail Corp.'s 9% notes due 2016 moving around for the first time in weeks, or maybe even months.

"It's kind of odd," he said, "because you never see it, but first thing this morning, we saw a 103 bid, then out of the blue a 103½ bid, a 104 bid, and it kind of went out on the day at 105 bid - but this is one of those names that you never see or hear from."

The Fargo, N.D.,-based company, which runs offers electric utility, manufacturing, health services, food ingredient processing and infrastructure businesses, priced $100 million of the split-rated (Ba1/BB+/BBB-) bonds on Dec. 1 at 99.994 to yield 9%. After that, the trader said, "the last time we had a $1 million trade was in February - so this is sort of out of the blue."

There was no fresh news on the company seen out on Monday.

Tribune trips up

A rare exception to the generally upside tone of the market Monday was Tribune Corp.'s 4 7/8% notes slated to come due this Aug. 15, which were among the most actively traded junk issues on the session, with over $50 million of the bankrupt Chicago-based newspaper publisher's bonds changing hands. A trader saw the bonds mostly trading in a 29-29 context, which he said was down from levels around 30-31 at which those bonds had been seen going home last week, so he characterized them as down 1½ points on the day.

Aside from the Tribune bonds, he said: "I didn't see anything fall out of bed,"

A second trader said he saw no fresh news out on Tribune, suggesting the bonds retreated because "maybe people are disappointed with the bankruptcy process" - although the authoritative Audit Bureau of Circulations , which tracks circulation trends of major newspapers, said that the company's flagship publication, the venerable Chicago Tribune, saw its daily circulation slide 10% during the latest yearly reporting period, between the end of March 2009 and March 2010, although circulation was also well down at its smaller rival, the Chicago Sun-Times, as part of a general slide among most major-market papers. Tribune's Los Angeles Times meantime dropped 15% year-over year.

Another trader saw the Tribune bonds trade into a 28½ bid, well down from Friday's levels and from 31½ at the opening on Monday - but he saw them later in the day bounce off those lows to come back up to around 301/4, as "somebody had a change of heart." He said that there had been "a lot of activity in working their way back up."

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