Intelsat sells notes, Mohegan slates deal; market awaits Sinclair; Tronox up more, CIT rebounds

By Paul Deckelman and Paul A. Harris

New York, Oct. 14 - Intelsat Jackson Holdings, Ltd., a unit of Bermuda-based communications satellite company Intelsat Ltd., successfully priced a quickly shopped $500 million offering of 10-year notes on Wednesday. Those notes were later quoted having gained a point in the aftermarket.

Elsewhere on the new-deal front, Sinclair Television Group Inc.'s planned $430 million offering of senior secured notes, which had been expected by market participants to price during Wednesday's session, was heard by high yield syndicate sources to have been floated off till Thursday.

The sources also heard price talk emerge on Drummond Co.'s $250 million five-year bond deal, which could price on Thursday or Friday.

Mohegan Tribal Gaming Authority, the operator of the eponymous Connecticut casino, announced plans to bring a secured notes offering to market, a deal which is expected to price next week.

Demonstrating that there is a key role in the high yield market for non-U.S. issuers, a trio of such companies was making news on Wednesday. German-based HeidelburgCement AG priced a three-part bond deal, sharply upsized to €2.5 billion from the €1 billion minimum originally talked around the market. Brazilian conglomerate Odebrecht Finance Ltd (Construtora Norberto Odebrecht SAB) also priced, bringing an upsized $500 million issue to market. U.K.-based motorsports track operator Donnington Holdings was heard shopping a £135 million issue of seven-year secured notes.

In the secondary realm, Tronox World Wide LLC's bonds were up by multiple points for a fourth consecutive session, with traders marveling at that continued climb, even though the good news which ostensibly began boosting those bonds last Thursday is now over a week old.

The see-saw saga of CIT Group Inc. continues, as the troubled New York-based commercial lender's bonds - which had been sliding badly over the last several sessions on indications investors may yet shun its pending debt-exchange deal, likely bringing on a bankruptcy - were now rebounding, apparently helped by news reports about company efforts to secure new financing.

Intelsat brings $500 million

Intelsat Jackson Holdings priced a $500 million issue of 8½% 10-year senior notes (B3/B+) at 99.166 to yield 8 5/8% on Wednesday.

The yield printed at the tight end of the 8¾% area yield talk. The reoffer price came in line with the discount talk of approximately 1 point.

Bank of America Merrill Lynch, Barclays Capital, Credit Suisse and Morgan Stanley were joint bookrunners for the quick-to-market debt refinancing and general corporate purposes deal.

HeidelbergCement upsizes to €2.5 billion

In Europe, HeidelbergCement completed an upsized, restructured €2.5 billion three-part senior unsecured notes transaction on Wednesday.

The German cement and building materials company priced €1 billion of 7½% five-year notes at 98.465 to yield 7 7/8%, at the tight end of the 8% price talk.

The company also priced €1 billion of 8% seven-year notes at 97.349 to yield 8½%, on top of price talk.

In addition HeidelbergCement priced €500 million of 8½% 10-year notes at 96.739 to yield 9%, 12.5 basis points better than the 9¼% area price talk.

Deutsche Bank and Royal Bank of Scotland were global coordinators and, along with Bank of America Merrill Lynch and Commerzbank, were joint bookrunners.

The transaction was upsized and restructured from the original €1 billion two-part offering. The 10-year tranche was added during the time that the deal was being marketed.

Drummond sets price talk

Elsewhere on Wednesday Drummond Co. talked its $250 million offering of five-year senior notes (B1) at the 9½% area.

The deal is expected to price Thursday morning.

Citigroup Global Markets Inc., Bank of America Merrill Lynch, HSBC Securities, Wells Fargo Securities and Scotia Capital are working the debt refinancing deal from the Birmingham, Ala., coal producer.

Mohegan kicks off $200 million

Mohegan Tribal Gaming is marketing a $200 million offering of eight-year senior secured second-lien notes.

The roadshow is expected to run through Oct. 20, with the deal expected to price after that.

Deutsche Bank Securities, Goldman Sachs & Co., Bank of America Merrill Lynch, Wells Fargo Securities, Calyon Securities and Citigroup are joint bookrunners for the debt refinancing.

Deals on the way

Elsewhere in the primary market, the news stream thinned out on Wednesday.

However the traffic in issuer names remained brisk.

Donington Holdings is in the market with a £135 million offering of seven-year first-lien notes, according to a market source.

Citigroup is leading the deal.

The U.K.-based motor racing enterprise will use the proceeds to refinance redevelopment of Donington Park for Formula One racing.

The buzz around the Donington bonds is that they will be printed with a 15% yield, a market-watcher told Prospect News.

Meanwhile Superior Plus Corp. is in the market with a C$150 million offering of bonds via Scotia Capital.

And Hertz Global Holdings Inc. may do $500 million of notes, a sell-side source said on Wednesday.

New Intelsats quoted higher

When Intelsat Jackson 's new 8½% 10-year notes were freed for secondary activity, a trader quoted the $500 million issue as having firmed to par bid, 101 offered.

That was up from the 99.166 level at which those bonds had priced earlier in the session.

Mohegan issue moves up

The news that Mohegan Tribal Gaming is bringing a new deal was the likely catalyst behind the gain in some of the Uncasville, Conn.-based Native American casino operator's existing bonds, notably its 8% notes due 2012.

Those bonds pushed up to 87½ bid, a market source said, up from 84 a week ago, on volume of about $5 million.

American Tower again active

For a second consecutive session, American Tower Corp.'s existing bonds were seen actively traded in the wake of the Boston-based communications antenna tower operator's split-rated (Baa3/BB+/BBB-) new issue.

A market source quoted its 7% notes due 2017 as having pushed up to 109½ bid, a 11/2-point gain over Tuesday's levels, and estimated that nearly $40 million had changed hands, on top of the $55 million which traded on Tuesday.

Ironically, there was considerably less activity - under $10 million total - in the company's 7 1/8% notes due 2012, which are expected to be taken out using the proceeds of Tuesday's new offering. The 7 1/8s were little changed on a round-lot basis, hanging in at slightly above 102, about where they had been last Friday, although several smaller trades late in the day brought their closing level down a little to about 101¾ bid.

The new 4 5/8% notes due 2015, $600 million of which priced on Tuesday, upsized from the originally proposed $400 million, were seen by junk traders to have very little presence in the high yield market, with most of the interest in the issue coming from investment-grade investors.

Market indicators firm solidly

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index shoot up 1¼ points Wednesday at 94 3/8 bid, 94 7/8 offered, after having risen by around ¼ point on Tuesday.

The KDP High Yield Daily Index jumped Wednesday by 25 basis points to end at 96.38, after having been up by 4 bps in Tuesday's dealings. Its yield narrowed by 7 bps to 8.67%.

In the broader market, advancing issues jumped back ahead of declining issues after two sessions on the slide, leading the laggards by a better than three-to-two margin.

Overall market activity, as measured by dollar-volume levels, rose about 14% from Tuesday's fairly busy post-holiday session.

However, a trader saw few real features in the market, noting "we were pretty dead - except that everything was well bid for. The market was on fire. Everything was moving up."

He saw nothing really standing out. "It was just across the board - everything was firmer," with sentiment no doubt helped by equities' return to the lofty levels above the psychologically potent 10,000 mark on the bellwether Dow Jones Industrial Average for the first time since early October of last year. The Dow managed to hold that hard-fought gain - seen by some as a concrete sign that the big Wall Street downturn of the past two years may have finally run its course - rising 144.80 points, or 1.47%, ending at 10, 015.86, its best level in more than a year. Broader indices like the Standard & Poor's 500 (up 1.75%) and the Nasdaq Composite (up1.51%) echoed that gain.

He cited the market impact of good third-quarter earnings reports from equity benchmarks JP Morgan Chase & Co. and Intel Corp. However, he cautioned that he "hadn't heard much. It's been quite a slow day."

While seeing Junkbondland's firm tone, he continued that "we're getting to the point where the market is just not moving up as much as the equity market is today."

Junk, he reiterated, "was firmer - but it was just kind of [there]. Bonds were trading - but it wasn't very liquid stuff out there.

Tronox triumphant, again

Among specific issues, a trader saw Tronox's 9½% notes due 2012 continuing to rise, even on a lack of fresh positive news about the Oklahoma City-based maker of chemical pigments. He saw the bonds trading around 60 bid in the morning, up from around a 57-58 context on Tuesday, and then rising to around a wide 62-64 range, before tightening to around 62-64.

Another trader saw the company's bonds continuing to go up "for whatever reason," pegging them at around 64-65, which he called a six point gain on the day, on "a lot of trading."

Noting the fact that the bonds are up nearly 30 points over the pace of a week, "you would think someone would know something," he said, referring to the lack of any meaningful consensus as to why the notes have shot up so strongly in the wake of the one piece of recent positive news the bankrupt company has had - its Oct. 7 financial projections through 2013. "Exactly a week ago," he said, it was 36. "Nice."

Tronox announced the improved projections after the financial markets had closed last Wednesday - and the 9½% notes immediately began moving up when trading opened last Thursday, jumping around 10 points on the day to end in a 47-48 context. Last Friday, the bonds advanced another 6 or 7 points to around the 54 level, and pushed up yet another 3 or 4 points on Tuesday, ending at 57-58 before advancing into the 60s on Wednesday.

"We're trying to get accounts involved in this, or to see who is involved, and it's one of these things - it doesn't seem like there are a lot of participants in this name," which at about $350 million is not one of the market's big liquid issues.

He said that usually with such a credit, "you send out a message - hey, these things are up over 20 points in the last few days, and you tend to have more people look at it and respond to you. But [even with those kind of advisories] it just didn't have that feel that a lot of participants were in the name."

Still, he added, "someone is buying them. They're up more than 20 points. Someone likes this name."

CIT rallies on financing hopes

A trader saw CIT Group bonds "whipping around" in the wake of the latest news about the struggling commercial lender.

He saw the short end of the company's curve, like the notes maturing next month, back up to around 70-72 from recent levels in the middle 60s, to which they had fallen over the last few days on investor sentiment that the company's debt-for-debt exchange offer was not attracting sufficient bondholder support. "So that's just whipping around, waiting for a deal to happen. There was a lot of trading."

News reports indicated that CIT was close to finalizing a $3 billion to 6.5 billion financing deal with a group of lenders, with Bank of America acting as lead arranger.

The trader said that the company's somewhat longer paper, like the 7 5/8% notes due 2012 , probably did not move as much, although here too, there was "a lot of trading in these things all day, all the CITs." He saw those bonds around a 62-63 context, estimating that to be "up 4 or 5 points, as well."

TXU trades actively

A trader saw "a lot of trading" in the bonds of the old TXU Corp. - now Energy Future Holdings Corp. and its Texas Competitive Electric Holdings Co. unit. He saw the parent's 10 7/8% notes due 2017 trading around 71-72.

"They've been 71-72 for days," he said, "and if the last trade is at 72, it's up ½ [point] and if it's 71, it's down 1/2. So it was unchanged, on a lot of volume, for that particular issue, " which, he added, "always trades in size."

A market source saw Dallas-based utility operator Texas Competitive Electric's 10¼% notes due 2015 up some 1¾ points to the 70 level, while another called them 2 point gainers, ending at just over 70, on volume of more than $22 million, making the issue one of the most active junk credits on the day.

Smurfit Stone bonds better

A trader saw Smurfit Stone Container Corp.'s bonds up, with issues such as the Jefferson Smurfit Corp. 8¼% notes due 2012 finishing in a 79-80 context, which he called up 3 or 4 points on the day.

A market source at another desk saw the packaging company's 81/4s ending up more than 5 points, closing just below 80 bid.

The most active Smurfit issue of the day, the 8% notes due 2030 jumped nearly 6 points on the session, also to around the 80 level, with over $30 million of the bonds having changed hands by day's end.

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