C&S closes busy week; Americold, Allbritton, Penn Virginia slate; Goldman mesmerizes market

By Paul Deckelman and Paul A. Harris

New York, April 16 - C&S Group Enterprises LLC priced an upsized offering of seven-year senior secured notes on Friday, high yield syndicate sources said. When the Keene, N.H.-based wholesale grocery distributor's new paper began trading in the secondary, market participants saw the bonds firm slightly from issue.

The C&S deal was the capstone for a moderately busy week which saw more than $6 billion of new dollar-denominated junk bonds price, including big drive-by issues from such well-known borrowers as Cablevision Systems Corp., Harrah's Entertainment Corp. and Charter Communications Inc.

The forward calendar was replenished as several prospective new deals emerged on investors' radar screens. Penn Virginia Resource Partners LP, a Radnor, Pa.-based coal and natural gas company, announced plans to sell $300 million of five-year notes. Sources heard the company primed to start a roadshow for the deal on Monday, with pricing expected late in the upcoming week. The sources also heard Atlanta-based Americold Warehouse Investment Partnership, a REIT specializing in refrigerated warehouse facilities, hitting the road on Monday in hopes of raising $300 million of cold cash through a sale of 10-year secured notes. And Allbritton Communications Corp., an Arlington, Va.-based-based media company, was heard to be shopping a $455 million issue of eight-year bonds.

Besides those domestic deals, the sources reported that Spanish engineering and construction company Obrascon Huarte Lain, SA priced €700 million of five-year senior secured notes - the latest in a series of pricings from a recently revived overseas junk market which this week alone priced €2 billion of new paper.

Away from the new deal arena, traders said much of the secondary market was becalmed, as investor interest was centered around the news of the Securities and Exchange Commission alleging fraud on the part of Goldman Sachs, which hammered the equity market wickedly and pushed the overall junk market down as well. One exception was Teck Resources Ltd., which firmed as Standard & Poor's returned the Canadian mining company's ratings to investment grade.

C&S upsizes

Friday's sole junk deal in the dollar market came from C&S Group Enterprises LLC.

The Keene, N.H.-based wholesale grocery distributor priced an upsized $300 million issue of seven-year senior secured notes (B2/BB-) at par to yield 8 3/8%.

The yield printed in the middle of the 8¼% to 8½% price talk.

J.P. Morgan Securities Inc. was the left bookrunner for the debt refinancing deal which was upsized from $250 million. Barclays Capital Inc. and Bank of America Merrill Lynch are joint bookrunners.

$6.2 billion week

With C&S into the tally, the week of April 12 saw junk issuers raise just over $6.2 billion of proceeds in an even dozen dollar-denominated tranches.

That takes the year-to-date total to $82 billion in 187 dollar-denominated, junk-rated tranches, according to Prospect News data.

Obrascón Huarte Laín plays to €10 billion book

In Europe, Obrascón Huarte Laín, SA priced a €700 million issue of five-year senior secured notes (expected ratings Ba1//BB-) at par to yield 7 3/8%.

The yield printed on top of price talk that had tightened from previous talk of the 7½% area.

Credit Agricole Corporate & Investment Banking, Citigroup, RBS Securities, Santander and SG Corporate & Investment Banking were the bookrunners.

Proceeds will be used to repay the company's revolver and for general corporate purposes.

The deal played to a €10 billion-plus order book, according to an informed source.

The euro-junk market saw considerable activity during the April 12 week.

On Thursday, Thomas Cook Group plc priced an upsized two-part unrated unsecured senior fixed-rate notes transaction.

The Peterborough, England-based travel and tourism company priced an upsized €400 million tranche of 6¾% five-year notes at 99.44 to yield 6 7/8%.

The tranche was upsized from €300 million. The yield printed at the tight end of the 7% area price talk.

In addition, Thomas Cook Group priced an upsized £300 million tranche of 7¾% seven-year notes at 99.168 to yield 7¾%.

The sterling tranche was upsized from £200 million. The yield printed at the tight end of the 7 7/8% area price talk.

The euro-denominated tranche played to €2.7 billion of orders, according to an informed source. The sterling-denominated piece saw orders totaling £1.7 billion.

Allbritton to bring $455 million

Looking to the week ahead, Allbritton Communications Co. will begin a brief roadshow on Monday for its $455 million offering of eight-year senior unsecured notes (expected ratings B3/B-, or better).

The roadshow wraps up on Wednesday. The Rule 144A with registration rights deal is expected to price on Thursday.

Deutsche Bank Securities is the left bookrunner for the debt refinancing deal. Bank of America Merrill Lynch is the joint bookrunner.

Penn Virginia to market $300 million

Meanwhile, Penn Virginia Resource Partners, LP and Penn Virginia Resource Finance Corp. will begin a roadshow on Monday for their $300 million offering of eight-year senior notes.

The debt refinancing deal is expected to price late in the week ahead.

Wells Fargo Securities is the left lead bookrunner. Bank of America Merrill Lynch, JP Morgan and RBC Capital Markets are joint bookrunners.

Americold plans 10-year deal

Also, Americold Warehouse Investment Portfolio will start a roadshow on Monday for its $300 million offering of 10-year senior secured notes.

Goldman Sachs & Co., Deutsche Bank Securities and RBC Capital markets are bookrunners.

Proceeds, in addition to funds raised from a concurrent initial public offering of common shares, will be used to fund the company's planned acquisition of assets from Versacold, and for general corporate purposes.

New C&S slightly firmer

A trader said that when the new C&S Group 8 3/8% senior secured notes due 2017 were freed for secondary dealings, the bonds broke at 100¼ bid, and then traded up to a 100½ bid, versus their par issue price. He later saw the bonds at 100½ bid, 100¾ offered. "It was a small deal, and was quiet."

Another trader proclaimed that C&S "did pretty well" in the aftermarket, firming to 100½ bid, 101½ offered.

Recent Rylands remain below issue

A trader said that Ryland Group Inc.'s new $300 million of 6 5/8% notes due 2020 were quoted at 99¼ bid, 100¼ going home, down from the par level at which the Calabasas, Calif.-based homebuilder priced its $300 million offering on Thursday afternoon, though not too far away from the 993/4-100½ area at which the bonds had traded after breaking into Thursday's aftermarket.

"There was not a heck of a lot of activity in them," he observed. Earlier in the morning, he saw the bonds at 99 5/8 bid, 100¼ offered - "but that was before the Goldman news came out, and in the whole market, stuff just got a little backed up a little bit."

Harrah's issue gets hit

The trader saw the new Harrah's Operating Escrow LLC/Harrow's Escrow Corp. 12¾% second-priority senior secured notes due 2018 trade as low as 99 5/8 bid, down from the 100 3/8 bid, 100½ offered level at which the bonds had traded on Thursday.

The big Las Vegas-based gaming company had priced the $750 million issue - upsized from its originally announced $500 million - on Tuesday at 98.778 to yield 13%.

Charter paper hangs in

Charter Communications' new $1.6 billion of eight-year and 10-year senior notes - which had priced at par on Wednesday and then had moved to levels above 102 on both tranches in Thursday's dealings - remained in that neighborhood on Friday, with a trader quoting the St. Louis-based cable and broadband operator's $700 million of 8 1/8% notes due 2010 at 102 1/8 bid, 102 5/8 offered - well up from issue, but off Thursday's highs at 102½ bid, 103 offered.

He also saw its $900 million of 7 7/8% notes due 2018 at 102 bid, 102½ offered - up from Wednesday's par issue price, though a little off from Thursday's aftermarket peak of 102¼ bid, 102¾ offered.

"They were pretty much in there for most of the day

He meantime saw no trading in the other big cable-company issue that came during the week - Bethpage, N.Y.-based Cablevision's upsized $1.25 billion of eight- and 10-year notes, which had priced at par on Monday to yield 7¾% and 8%, respectively.

Market indicators mostly stronger

Among bonds not connected with the new-deal market, a trader saw the CDX Series 14 index fall by ¾ point on the day Friday to end at 100¼ bid, 100¾ offered, after having risen ½ point on Thursday. That put the index well below its peak level for the week, 101¼ bid, 101¾ offered, but still left it up from the 99½ bid, par offered level seen at the end of the previous week on Friday, April 9.

The KDP High Yield Daily Index meantime was up by 7 basis points on Friday at 72.75, after having risen by 11 bps on Thursday, while its yield came in by 2 bps, to 7.60%, after having narrowed by 4 bps in each of the previous three consecutive sessions. The index thus ends the week improved from its 72.71 reading a week earlier, while the yield is tighter than last Friday's 7.77%.

The widely followed Merrill Lynch High Yield Master II Index firmed to a closing level of 5.569% on Friday - a new peak level for 2010 -- from 6.416% on Thursday and from 5.435% the preceding Friday. Its yield to worst tightened to 8.36% from 8.67% on Thursday and from 8.311% the previous Friday.

Advancing issues once again led decliners on Friday, although their previous advantage of better than four to three had dwindled to just about three dozen issues out of more than 1,400 tracked.

Overall market activity, represented by dollar-volume levels, fell by 17% on Friday from levels seen the previous session.

A trader characterized Friday as "a sort of blah day for my desk," pointing out that "all the news is in the stock market. Goldman Sachs is the story of the day," with Wall Street reacting extremely negatively to the SEC fraud suit against the New York-based banking behemoth.

Another said that "it is very dead" in Junkbondland, "and very quiet.

"To let you know how exciting it is out there," he said, "one of the CIT [Group Inc] issues has a locked market - $6 million up, and nobody cares." He continued that "everyone has been focusing on the Goldman news, and getting ready for the weekend.

"[Thursday] was busy as hell. Today? It's like a three-day weekend, almost."

MGM Mirage unmoved by convert deal

A trader noted that MGM Mirage upsized the amount of five-year convertible notes it was selling to $1 billion from $750 million previously, with the deal proceeds going to pay down debt.

However, he said that the news had no impact on the Las Vegas-based casino giant's junk bond levels.

"I have not seen anything in MGM bonds today," he declared.

At another desk, MGM's 6 5/8% notes due 2015 were quoted down 1½ points at 861/2, while a source elsewhere saw those bonds down a deuce at 86 bid.

Mariner move looks over...

A trader said that Mariner Energy Inc.'s bonds looked "pretty much unchanged" Friday, in contrast to the hectic trading seen on Thursday of the Houston-based oil and gas exploration and production company's $300 million of 7½% senior notes due 2013, its $300 million of 11¾% guaranteed senior notes due 2016 and its $300 million of 8% guaranteed seniors due 2017.

Those bonds had firmed smartly on Thursday - to levels around 104 1/8 bid, 130¼ bid and 113¼ bid, respectively, on the news that Mariner agreed to be acquired by Apache Corp. for $2.7 billion, with Apache to also assume $1.2 billion of Mariner debt.

....Same for Spheris

A trader said that the Spheris Inc. 11% senior subordinated notes due 2012 ended at around 30-32, which he called "down a little bit" from the 30-32 level at which the bankrupt Franklin, Tenn.-based medical transcription service company's bonds finished on Thursday - when they shot up some 20 points after the Delaware bankruptcy judge overseeing the company's reorganization okayed the sale of virtually all of its assets to units of CBaySystems Holdings Ltd. for $116.3 million.

That sum - which will go to the company's bondholders and other creditors to partially repay their $225 million of claims - is about 50% higher than the original $78.3 million bid by another would-be-suitor, Transcend Service Inc.

Teck trades up

Teck Resources' bonds were seen better after the Vancouver, B.C.-based mining company's credit ratings were upped to investment grade by Standard & Poor's.

A market source saw its 10¼% notes due 2016 at 121, up more than a point, while a second source pegged its 9¾% notes due 2014 up 2 points at 122. Its 10¾% notes due 2019 gained 1½ points to 125.

"Teck has improved its financial risk profile to a level commensurate with an investment-grade rating and that its better-than-average cost profile will enable it to maintain intermediate credit metrics in the medium term," S&P credit analyst Maude Tremblay said.

Teck remains at Ba1 with Moody's Investors Service. Fitch Ratings also has the bonds as investment grade.

Paper, packaging names mixed

A trader saw NewPage Corp.'s 10% notes due 2012 end "down a couple" [of points] at 72-74, versus the 74-75ish levels at which the Miamisburg, Ohio-based coated-paper company's bonds had traded during the week, on no news.

He saw Smurfit-Stone Container Corp.'s bonds, such as its Jefferson Smurfit 8¼% notes due 2012 around 92 bid, 93 offered, which he called about unchanged, on "good volume. They had a decent amount of activity in the name."

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