Invitel prices as calendar continues to fatten; Wind, SandRidge, Pinnacle expected Wednesday

By Paul Deckelman and Paul A. Harris

New York, Dec. 8 - Tuesday was another busy day in the high yield primary market, although once again -- as seems to have frequently been the case recently - there was not much actual pricing going on, but considerable building-up of the year-end forward calendar, already bulging with well over a dozen upcoming deals totaling more than $6 billion.

Junkbondland's lone pricing of the day came from Hungarian telecommunications operator Invitel Holdings A/S, which successfully brought €345 million of seven-year senior secured notes to market, slightly upsized from the originally announced €340 million.

Meanwhile, the already crowded calendar continued to build, with new offerings announced by a quintet of energy-related companies - Geokinetics Holdings, Inc., Infinis plc, SandRidge Energy Inc., Solargy Systems Inc. and Vantage Drilling Co. - as well as by non-energy borrower Pinnacle Foods Finance, LLC.

Computer equipment, accessories and software distributor Intcomex announced a five-year offering of secured notes, while Italian telecommunications company Wind Acquisition Holdings Finance SA was seen readying a new two-part, dual-currency deal, which could price as soon as Wednesday. The SandRidge and Pinnacle Foods deals were likewise seen likely to price late Wednesday after morning investor conference calls, or at the very latest, by Thursday morning.

High yield syndicate sources meantime said timing emerged on American Axle & Manufacturing, Inc.'s upcoming $400 million offering of secured bonds, with price talk on the Detroit-based automotive components maker's issue expected out on Wednesday and pricing anticipated for early Thursday.

Infinis was heard to have begun a roadshow for its sterling-denominated deal, while Geokinetics is expected to hit the road on Monday, with pricing expected the latter part of next week.

In the secondary realm, American Axle's bonds - which had been moving up smartly over the previous several sessions, first on anticipation of the company's new deal and then, on Monday, on confirmation of such market scuttlebutt - were seen having retreated by several points.

The new Ford Motor Credit Co. 10-year bonds which priced on Monday continued to struggle, with only their offer price edging just above the level at which the $1 billion issue came to market.

Among the names with no new-deal connections, CIT Group Inc.'s bonds were seen active and higher, following a bankruptcy judge's approval of the New York-based commercial lender's reorganization plan, clearing the way for its emergence from Chapter 11 later this week.

Against a backdrop of falling stock prices, junk was trading flat on Tuesday, a syndicate banker said.

"You didn't see much trading," the banker remarked.

"That's because all eyes are on the primary market."

SandRidge's $400 million for Wednesday

In the primary market, no U.S. deals priced on Wednesday.

However a massive forward calendar of deals to price, likely during the next eight market sessions, continued to build.

"People probably have until Dec. 18 to get their deals done," the syndicate banker said.

"After that, the market could be finished for the year."

In the new issue market, SandRidge Energy will host an 11 a.m. ET investor call on Wednesday for its $400 million offering of senior notes due Jan. 15, 2020.

The deal is expected to also price on Wednesday.

Bank of America Merrill Lynch, Deutsche Bank Securities, JP Morgan, Mitsubishi and RBC Capital Markets are joint bookrunners for the deal to fund the acquisition of oil and gas properties in the Permian Basin from Forest Oil Corp. and one of its subsidiaries.

Pinnacle plans $300 million add-on

Elsewhere, Pinnacle Foods Group will host an investor call at 10:30 a.m. ET on Wednesday for a $300 million add-on to its senior notes due April 1, 2015.

The deal is expected to price on Wednesday afternoon.

Credit Suisse, Barclays Capital, Bank of America Merrill Lynch, HSBC and Macquarie Capital are joint bookrunners for the deal to help finance the $1.3 billion acquisition of Birds Eye Foods Inc.

The original $325 million price at par in March 2007.

Wind to sell two-piece deal

Meanwhile Wind Acquisition Holdings Finance expects to price €500 million equivalent of 7.5-year senior PIK notes in euro- and dollar-denominations on Wednesday or Thursday.

The notes will pay PIK interest until Jan. 15, 2014, after which interest payments are to be made in cash.

Morgan Stanley, Banca IMI, Calyon Securities, Citigroup, JP Morgan and Natixis Bleichroeder are leading the deal to fund cash distribution to Weather Group.

The prospective issuer is a subsidiary of Italian telecommunications company, Wind Telecomunicazioni S.p.A.

Geokinetics starts marketing Friday

There were also roadshow announcements on Tuesday.

Geokinetics Holdings will begin a roadshow on Friday for its $275 million offering of five-year senior secured notes.

The deal is expected to price late next week.

RBC Capital Markets is the lead bookrunner for the notes, proceeds from which will fund the cash portion of the PGS Onshore acquisition and repay debt.

Vantage Drilling to sell $135 million

P2021 Rig Co., a financing unit of Vantage Drilling, is marketing a $135 million offering of senior secured notes due 2013 this week in Asia and Europe.

A Dec. 14 to Dec. 17 U.S. roadshow will follow.

Jefferies & Co. has the books for the deal to fund the completion of the acquisition of Topaz Driller.

Intcomex secured deal

Elsewhere, Intcomex Inc. plans to sell $120 million of senior secured notes due 2014 (B3/B-).

Bank of America Merrill Lynch will be the bookrunner.

Infinis starts roadshow.

Northampton, U.K.-based renewable energy generating company Infinis began a roadshow on Tuesday for a £275 million offering of senior notes due December 2014 (expected ratings B1/B+).

The deal is expected to price before the end of the week.

Deutsche Bank Securities and JP Morgan are joint bookrunners.

American Axle moves up timing

Finally, American Axle & Manufacturing moved up timing on its $400 million offering of seven-year senior secured first-lien notes (existing first-lien ratings B3/B-).

Books will close on Wednesday, with the deal expected to price on Thursday morning.

Initially the roadshow was expected to run through Thursday.

JP Morgan and Bank of America Merrill Lynch are joint bookrunners for the bank debt refinancing from the Detroit-based automotive supplier.

How much is too much?

A trader said that "it just seems like there's a huge forward calendar coming."

He noted the fact that at least $6.6 billion of new dollar-denominated bonds and another €1.3 billion of euro notes are being marketed, and added that "it will be interesting to see what gets done before Dec. 31" - or, perhaps more realistically, before Dec. 21, the start of the week which will culminate with an abbreviated pre-holiday session on Thursday, Dec. 24, followed by a full market close the following day.

He also took note of the sense of foreboding among some market participants that the currently expansive market conditions that have fueled this year's strong junk rebound from last year's absolute debacle may not last much longer, given fears that heavy government spending may stoke the fires of inflation and drive interest rates back up.

"Everybody is trying to rush to that [borrowing] window before the music stops. They're running to the punch bowl before it's empty."

A second trader described the market as "a new-issue extravaganza. We're up to 15 or 16 deals - and still waiting around for Clear Channel [Communications Inc.], which is rumored to be any day now. So we've got a lot to look at over the next week or so."

He said "it's really interesting how things have played out - but now, it's just a game for the banks to get as much out there [as they can] and see what can be priced, to generate the fees."

He agreed with the suggestion that with so many deals now building up on the calendar, a finite, though large, amount of investor cash and a dwindling time window to get everything done, some deals might be left behind.

"Some of those deals are obviously going to get left by the wayside, simply because of size, leverage, quality or lack of [investor] focus," either not pricing at all this year, or pricing and doing poorly, or "some combination thereof.

"It's going to be an interesting couple of weeks."

Energy a suddenly hot sector

A market source at an investment house primarily oriented toward energy credits noted the plethora of deals coming from out of that sector, such as exploration and production operator SandRidge, contract driller Vantage and oilfield services providers Expro Group and Geokinetics, not to mention renewable energy operators Infinis and Solargy, and such other energy related-prospective issuers like McJunkin Red Man Inc., which makes pipes and valves for the energy industry, and Aquilex Corp., which maintains and repairs energy industry infrastructure.

He said that "Each of the deals for Geokinetics, SandRidge and Vantage has been done to fund growth - to raise the capital while the capital markets are open."

He added that "in general, we have seen a massive amount of high yield energy debt and equity being used to take out the banks this year, as the latter are contracting their loan portfolios."

American Axle backs up

A trader saw American Axle & Manufacturing Inc.'s 7 7/8% notes due 2017 trading at 81½ with "a couple of million traded," which he called down ½ point on the day, and saw the company's 5¼% notes due 2014, which had gotten as good as 87 on Monday, trading around the 84 level Tuesday. He said the latter bonds were more active than the 17s.

"You had a couple of million trade at 87 - and then the next trade we saw today, it was trading down at the 84 level."

The company's existing bonds had firmed solidly on both Friday and Monday, presumably rising several points each session first on the speculation, and then later, on the actual news, that it will bring a new junk issue, among some other financing moves.

That trader suggested that the bonds may have risen Friday and Monday because "somebody may have been covering a short, you never know."

An alternate theory was that the bonds had risen on the news of the company's new deal, but then faded Tuesday as that momentum died out - and as investors realized that the new bonds, which are first lien senior secured, will rank ahead of the current bonds in the capital structure, pushing the latter's holders further to the back of the payment line in the event of an event of default.

Ford Credit still spinning wheels

Among the recently priced names, for a second straight session, the new Ford Motor Credit 8 1/8% notes due 2020 were seen struggling, trading below the 98.304 level at which the Dearborn, Mich.-based auto loan arm of Ford Motor Co. had priced its $1 billion offering on Monday to yield 8 3/8%.

A trader said the bonds "have kind of been trading around" - but with not much to show for it in the way of gains from the 97¾ bid, 98¼ offered level at which they were seen going home after their initial aftermarket dealings late Monday.

He saw the bonds opening Tuesday at 97 7/8 bid, 98¼ offered, and said that by the day's end, they were going out around a 98-98½ context.

"You're seeing it quoted a lot, and some trading taking place," he said, when asked about the level of activity in the new paper, but agreed with the suggestion that the trading level would seem to indicate a distinct lack of enthusiasm for the deal on the part of junk players.

Still, he added, "at least now, you have the offering above the issue price, and I think the underwriters are doing what they can do to keep that above issue, even though the bid doesn't seem like it's quite there yet."

A second trader was more blunt. The new Ford Credit bonds, he flatly declared "are sucking wind."

At another desk, a trader cynically pointed out that "it's a $1 billion issue. They [Ford] raised their money. Once it's priced - they don't care."

JDA stays strong

The previous session's other new deal, for JDA Software Group, Inc., meantime was seen pretty much hanging onto the robust gains which those bonds notched in initial secondary dealings late Monday, though on not much activity.

A trader saw those 8% notes due 2014 at 101½ bid, 102 offered - about even with where the bonds had finished on Monday, but he added that was "the only thing we heard from them."

The Scottsdale, Ariz.-based supply chain services provider had priced its $275 million issue at 98.988 to yield 8¼%., and then advanced in the aftermarket to around that 1011/2-102 area.

Hanes continues to trade

A trader saw Hanesbrands Inc.'s recently priced issue of 8% notes due 2016 "a little active today," quoting those bonds as trading inside of a 100 5/8-101 market, tightening "at times" to 100¾ bid, 100 7/8 offered, so "there's been some activity there."

Hanes, a Winston-Salem, N.C.-based maker of popular brands of underwear and hosiery for men, women and children, priced its $500 million issue of those bonds last Thursday at 98.686 to yield 8¼%. The new bonds pushed up above the par level later that same session, and have hovered above par ever since.

Market indicators seen steady

Back among statistical measures of market performance not related to the new-deal market, a trader saw the CDX Series 13 index unchanged Tuesday at 95¼ bid, 95¾ offered, after having risen by ¼ point on Monday.

Meanwhile, the KDP High Yield Daily Index edged upward by 1 basis point on Tuesday, to 70.24, on top of the 13 bps gain seen on Monday. Its yield, however, tightened by 5 bps, to 8.36%, after having come in by just 1 bp the previous session.

In the broader market, advancing issues continued to lead decliners for a sixth consecutive session by a seven-to-six margin.

Overall market activity, as measured by dollar volume, rose 21% from Monday's pace.

A trader said that the secondary market "has got that tone - people are putting some things out right now in the secondary, but nobody is really reaching for anything," so as not to make any last-minute bad trades that could harm the hefty gains seen so far this year.

The secondary, another trader said, "was a grind - the biggest volume was in stuff like CIT, Ford and Sallie Mae [SLM Corp.]" - the latter actually a split-rated "crossover" name that also attracts attention from high-grade accounts. He also saw activity in "some of the hybrids" issued as junk by investment-grade rated big banks like Wells Fargo and its Wachovia unit, and Citigroup Inc.

He also saw "modest volumes in some of the healthcare names and some of the recent deals" - but "not a whole lot that traded into the double digits," in terms of millions of dollars of trading volume as recorded on the Trace system.

Flows, he continued "were spotty. There was a lot of blocking and tackling to get trades done, and everybody and their brother is trying to 'triage' the new-issue calendar, to figure out what they're going to play, and what they won't."

Of the recently priced deals, he said that "those that were put away are doing okay - and those that seem to either have some hair on them or not exactly a lot of euphoria" - he mentioned the Ford Credit issue - "are all sucking wind."

CIT celebrates coming emergence

Among specific issues not linked to the new-deal market, traders noted considerable activity in some credits of distressed companies.

One saw CIT Group' bonds better as the troubled commercial lender's reorganization plan won approval from a federal bankruptcy judge, clearing the way for its emergence from Chapter 11 as early as Thursday.

He said that the bonds mostly finished around 75, up a little from where they had been on Monday, while CIT's 6.10% subordinated bonds due 2067 gained 1½ points on "very good volume" to end the day at 111/2. He said the issue "equates to the equity of CIT, so obviously, people are feeling good about how CIT is coming out of bankruptcy."

He saw some $20 million of the 6.10s trading, quoting them between 10½ and 11 7/8. Meanwhile, he saw its 4¼% notes due 2010 trading between 75 and 76, which he called "up probably a good point or 1½ points," on $16 million traded.

He further saw about $16 million of its floating-rate notes due July 2011 having finished the day around 76¼ bid - well up from its opening price of 74, and up further still from the 71-73½ range in which those floaters had moved on Monday on "lots of volume."

In Tuesday's dealings, he said that there had been "a lot of activity" in the bonds between 75 and 751/2, before they turned higher later in the day.

Aventine climbs on plan filing

A trader said that "there was one huge mover today"-Aventine Renewable Energy Inc.'s 10% notes due 2017. He said that a little over $6 million traded on the day, closing at 90½ -- which he said was up over 18 points from the most recent previous print on Trace.

The big gain in the Pekin, Ill.-based ethanol producer's bonds was apparently sparked by the news that Aventine - which had filed for Chapter 11 protection back in April - had finally filed its plan of reorganization with the U.S. Bankruptcy Court in Wilmington, Del., after having been granted two extensions of its exclusivity period by the court.

According to the disclosure statement filed Friday along with the plan, Aventine will issue $105 million in notes on the effective date of the plan that will be used to fund distributions and post-emergence working capital needs. Aventine said in the document that the holders of about 70% of its pre-bankruptcy unsecured notes have agreed to purchase up to $105 million of the new senior secured notes, which will have a coupon of either 13%, payable in cash, or 15% if the company elects to pay the interest in kind through the issuance of new notes.

The senior secured notes will be issued in units containing a $1,000 face amount note and a share of 20% of the total shares of the reorganized company to be issued with the notes.

Aventine also said it will enter into a $20 million asset-based lending facility to fund post-emergence liquidity and working capital needs.

Aventine further asked the court to authorize an extension of its exclusive period to file a plan of reorganization to March 4 from Dec. 4, and to extend the exclusive period for soliciting support for its plan to May 3 from the current Feb. 1 deadline "to allow the confirmation process to continue unhindered by competing plans."

Dubai issue hammered down

A trader said that Dubai development company Nakheel PJSC's paper slipped badly on Tuesday, seeing its 3.172% notes slated to come due on Dec. 4 falling to a 47-49 context versus a closing level of 52 on Monday. He saw its floating-rate notes due 2010 at 33-35, down from 38 bid previously, and saw its 2¾% notes due 2011 dipping to 36-39 from Monday's levels around 42.

The latest slide comes amid a backdrop of potentially ominous developments.

News reports indicated that Dubai officials - who last month said they would ask the creditors of Nakheel parent Dubai World for a six-month "standstill" on its debt to allow it to reorganize, throwing world financial markets into a tizzy -- now are saying that six months will not be enough time for the troubled company to completely restructure its $59 billion of debt, with the prospect of additional delay creating the conditions for a further erosion of investor confidence.

The country's finance minister, Abdulrahman al-Saleh, said in a televised interview that "the period of six months would be too short for a full restructuring," and would only allow Dubai World to "focus on the creditors, the contractors and so on," rather than completely restructuring its obligations.

The official was also ambiguous about what role his government would play in standing behind the state-run development company's debt, saying that Dubai would support the group "as an owner" - but then adding that "we would like to emphasize the distinction between guaranteeing and backing. The company has received [a lot of] backing from the government since its inception."

On the other hand, a group of more than 25% of the holders of the Dec. 14 bonds - enough to block any agreement they do not like - reportedly said Tuesday that they would not go along with the emirate's request for a standstill on the debt of Dubai World and that of its subsidiaries like Nakheel, and warned that they expect to be paid in full when the $3.5 billion sukuk bond issue matures less than a week from now.

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