PetSmart megadeal sees brisk demand; new Oshkosh, USG also strong; Intelsat off on guidance

By Paul A. Harris and Paul Deckelman

New York, Feb. 18 – PetSmart, Inc. was the big dog in Junkbondland on Wednesday, as the $1.9 billion eight-year offering financing the leveraged buyout of the company priced amid intense investor demand.

Traders said that the new bonds firmed smartly when they were freed for aftermarket activity.

Traders also reported brisk dealings in both of the drive-by issues that had priced during Tuesday’s session, from USG Corp. and Oshkosh Corp. Each of those deals was trading well above its par issue price on active volume.

With the holiday-shortened week thus off to a flying start, despite the current earnings blackout, primaryside players expressed optimism, feeling that strong market technicals, including continued flows of investor cash into junk bond mutual funds and exchange-traded funds, could pave the way for some opportunistically timed new issues.

In the secondary market, besides the new deals from Tuesday and Wednesday, there was continued solid activity in recently priced issues such as Wynn Las Vegas LLC, Gtech SpA, and Dollar Tree, Inc.

Away from the new and recent deals, California Resources Corp.’s bonds traded strongly, despite a fall in crude oil prices.

But Intelsat SA’s bonds all lost altitude, even though the company reported better-than-expected fourth-quarter earnings and revenue, as it also issued reduced 2015 revenue guidance.

Statistical indicators of junk market performance were mixed for a third straight day on Wednesday.

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