Upsized Reliant mega-deal, Actuant price; WCI higher, troubled autos cruise

By Paul Deckelman and Paul A. Harris

New York, June 6 - Reliant Energy, Inc. successfully upsized its billion-dollar-plus two-part offering late Wednesday. However that deal came to market way too late for any kind of aftermarket dealings.

Earlier in the session, Actuant Corp. priced a considerably smaller single-tranche 10-year deal. Those bonds edged up a little when they were freed for secondary activity.

Elsewhere in the primary sphere, Sanmina-SCI Corp. unveiled plans to sell $600 million of new bonds in a quickly-shopped two-part deal that is expected to price during Thursday's session. And pre-deal market price talk emerged on scheduled forward calendar offerings for Bristow Group Inc. and W&T Offshore Inc.

In the secondary arena, the major mover, traders said, was troubled Dana Corp., whose bonds rose smartly in very active dealings, helped, they said, by asset-sale news.

Other names out of that same distressed sector such as Dura Automotive Systems Inc. and Remy International Inc. came along for the upside ride.

Apart from the autos, a trader saw a nice gain in WCI Communities Inc. bonds on the news that billionaire investor Carl Icahn is back in the hunt for the Bonita Springs, Fla.-based homebuilder.

Late Wednesday, with the stock market taking its lumps, a high yield syndicate official told Prospect News that the broad junk market was hanging in, and added that volatility in stocks usually takes a little time to seep into the high yield bond market.

Meanwhile the Banc of America Securities BAS High Yield Broad Market Index was down 0.11% on the day.

Nevertheless the primary market continued to churn out new issues. More than $1.5 billion of new paper was issued on Wednesday.

Reliant Energy upsizes

Houston-based Reliant Energy placed $1.3 billion of senior unsecured notes (B3/B-/B+) in an upsized transaction on Wednesday, according to an informed source.

The company priced a $575 million tranche of seven-year notes at par to yield 7 5/8%.

Meanwhile Reliant Energy priced a $725 million tranche of 10-year notes, also at par, to yield 7 7/8%.

Both tranches were priced on top of the price talk.

Goldman, Sachs & Co., Deutsche Bank Securities, JP Morgan, Merrill Lynch & Co. were joint bookrunners for the debt refinancing deal which was upsized from $1.25 billion.

Actuant at a discount

Actuant priced a $250 million issue of 6 7/8% 10-year senior notes (Ba2/BB-) at 99.607 to yield 6.93%.

The yield came 5.5 basis points above the mid-point of the 6 7/8% area price talk.

Banc of America Securities LLC ran the books for the Glendale, Wis., industrial equipment manufacturer's debt refinancing deal.

Sanmina to sell $600 million

Sanmina-SCI plans to price a quickly shopped $600 million two-part offering of senior floating-rate notes (Ba3/B+) on Thursday.

The San Jose, Calif., electronics company intends to sell $300 million of three-year notes and $300 million of seven-year notes.

Both tranches are talked at 275 basis points spread to Libor.

Banc of America Securities LLC is the left bookrunner for the debt refinancing deal.

Talking the deals

Meanwhile the remainder of the June 4 to June 8 week took shape during the Wednesday session, with prospective issuers setting price talk on their respective deals.

Bristow Group set price talk for its $250 million offering of 10-year senior unsecured notes (Ba2/BB) at 7¼% to 7½%.

The Goldman Sachs and Credit Suisse led deal is expected to price on Thursday.

Hub International Ltd. talked its $790 million three-part notes offering on Wednesday.

The Chicago-based insurance broker is in the market with two tranches of seven-year senior notes (B3/CCC+). The floating-rate notes are talked at a 350 to 375 basis points spread to Libor. The fixed-rate notes are talked at 8½% to 8¾%.

Hub also intends to place a tranche of eight-year senior subordinated notes (Caa1/CCC+) which it has talked at 9¾% to 10%.

Tranche sizes remain to be determined.

The Morgan Stanley and Merrill Lynch-led deal is expected to price on Friday.

Elsewhere W&T Offshore Inc. set price talk for its $450 million offering of seven-year senior notes (B3/B-) at 7 ¾% to 8%.

The Morgan Stanley-led deal is expected to price by the end of the week.

And from South Africa, Edgars Consolidated Stores (Edcon) set price talk for its €1.83 billion three-part notes offering on Wednesday, according to a market source.

The South African clothing retailer talked its proposed €1.18 billion tranche of seven-year senior secured floating-rate notes (B2/B+) at the Euribor plus 275 basis points area.

Meanwhile Edcon set price talk for €650 million of senior unsecured notes (Caa1/B-) in two tranches.

A tranche of unsecured fixed-rate notes, with three years of call protection, is talked at the 8 1/8% area.

A tranche of unsecured floating-rate notes, non-callable for two years, is talked at the Euribor plus 425 basis points area.

The sizes of the senior unsecured notes tranches remain to be determined.

Barclays Capital, Credit Suisse and Deutsche Bank Securities are joint bookrunners for the deal which is also expected to price by the end of the week.

New Actuant bonds move up slightly

When the new Actuant 6 7/8% senior notes due 2017 were freed for secondary dealings, a trader saw them move up to 100.5 bid, "but small," indicating restrained trading activity.

Another trader saw the bonds at 100.25 bid, 100.75 offered, up only slightly from their par issue price.

He also saw the new Pinnacle Entertainment Inc. 7½% senior subordinated notes due 2015, which had hovered around their 98.525 issue price initial trading on Tuesday, remaining in that same 98.375 bid, 98.625 offered context in Wednesday's trade.

Market generally quiet, unchanged to easier

"Not too much was going on," the second trader said, noting that the widely followed CDX junk bond performance index was unchanged on the session at 100 9/16 bid, 100 11/16 offered.

He saw the benchmark automotive names off slightly, with General Motors Corp.'s 8 3/8% notes due 2033 at 92.5 bid, and arch-rival Ford Motor Co.'s flagship 7.45% notes due 2031 at 81.5 bid, both down 3/8 point on the day.

Dana leads distressed autos higher

The big movement on the day, traders said, came in another part of the autosphere - the bankrupt and other troubled automotive supplier companies that provide the GMs and Fords of the world with the components they turn into cars and trucks.

A trader called Dana "the big mover of the day," seeing the bankrupt Toledo, Ohio-based automotive parts maker's bonds up on the news that the U.S. Bankruptcy Court for the Southern District of New York, which is overseeing the company's reorganization, had approved the sale of the two businesses that compose Dana's Fluid Products operations.

He saw the company's 6½% notes due 2006 jump to 101.5 bid, 102.5 offered from prior levels at 98.75 bid, 99.75 offered, while its other bonds "were up by about the same amount," the 5.85% notes due 2015 finishing at 94 bid, 95 offered and its 7% notes due 2028 three-point winners at 98 bid, 99 offered.

Another trader agreed that it was "the asset sale" that boosted Dana's 6½% notes due 2009 by three points to 101.5 bid, 102.5 offered.

Yet another proclaimed that they were "up pretty good" on the day to finish at that level.

A market source said that Dana's several issues of bonds were among the most actively traded names on the day, with the 2008 and 2009 6½ bonds each up about 2½ points, the 8 5/8s up around 1 3/8 and the 2028 and 2029 7% long bonds a full 3 points better.

Dana said that the court had okayed the transfer of its fluid products hose and tubing division to Bursa, Turkey-based Orhan Holding AS for $85 million, and had also given the green light to the sale of its coupled products business to Coupled Products Acquisition LLC, a subsidiary of Wanxiang Holdings Corp. - one of China's largest automotive parts manufacturers - for a nominal price of $1.00.

The units being sold have facilities in Rochester Hills, Mich., near Detroit, and elsewhere in the United States, as well as overseas, and have a combined employee contingent of just under 4,000 people.

The sales are the latest in Dana's efforts to shed non-core assets as it tries to restructure itself, after having filed for Chapter 11 protection in March of last year.

Dura, Remy Cooper also gain

Elsewhere in the distressed automotive sector, Dura Automotive Systems' bonds continued their march upward - a trader said that the bankrupt Rochester Hills-based components maker's 8 5/8% senior notes due 2012 were up 5 points on the session to 63.5 bid, 64.5 offered, noting that the bonds are up 13 points since the start of trading on Monday. However, he saw no fresh news out about the company.

Another saw the bonds 6 points better at the 63 bid, 64 offered level, and said the company's 9% subordinated notes due 2009 were a point better at 15 bid, 16 offered.

Yet another source pegged them up 6 points on the day at 64.5 bid.

Trading in the bonds was said to have been brisk.

The first trader also saw Remy International's 8 5/8% notes slated to come due on Dec. 15 at 97.5 bid, 98.5 offered, up ½ point, while the Anderson, Ind.-based automotive electronics and electrical systems manufacturer's 11% notes due 2009 were 1½ points up at 69 bid, 71 offered.

Unlike Dana and Dura, Remy has not filed for bankruptcy, although like them, the company has struggled with the downturn in its major market, the U.S. "Big Three" domestic carmakers.

But on Wednesday, the hard times were temporarily forgotten, as "all of the distressed autos, from Delco Remy to whoever, were up," another trader said.

Also seen moving in the automotive sector on Wednesday, the non-distressed Cooper-Standard Automotive Inc.'s 8 3/8% notes due 2014 were seen a point better at 95 bid, 96 offered.

The Novi, Mich.-based maker of sealing, noise and vibration control components for the automotive industry said Wednesday that it plans to buy eight sealing systems manufacturing plants in Europe, as well as interests in several joint ventures in Asia, from Metzeler Automotive Profile Systems for an undisclosed sum. The plants being acquired, located in Germany, Italy, Poland Belgium, India and China, have annual sales of about $400 million, and service such customers as Fiat, BMW, DaimlerChrysler and Volkswagen Group.

WCI gets Icahn boost

Apart from those auto names, a trader said that WCI Communities were "among the bonds that popped, given a boost by the Carl Icahn M&A news.'

He saw the company's 7 7/8% notes due 2008 push up a point to 97.5 bid, while its 9 1/8% notes due 2012 were up ¾ point at 100.75, and its 6 5/8% notes due 2015 were a point ahead at 95.75.

The trader cited the re-entry of acquisition-hungry billionaire Icahn into the company picture as the likely catalyst for the rise, although he cautioned that the 2008 bonds "have change-of-control puts at 101, so they're not going to go up that much from present levels."

WCI said that an Icahn affiliate has signed a confidentiality agreement and wants to participate in a formal sales process launched by WCI earlier this year.

At that time, Icahn made a $22 per share tender offer for the company stock that he didn't already own - but WCI's board recommended against that offer, calling it "financially inadequate" and adopting a "poison-pill" defense to thwart any hostile takeover try. Icahn's tender offer expired on May 18, with his affiliates taking no action.

The company said it has been talking to several potential buyers other than Icahn, but has not revealed how many.

Although its annual meeting is scheduled for June 15, Icahn has asked the company to postpone that meeting until after the sales process is complete.

The canny tycoon, unfazed by the failure of his tender offer last month, has nominated his own slate of officers for the board - but WCI has urged the other shareholders to keep the current officers in place, saying Icahn's slate will not work in the best interest of all shareholders.

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