General Maritime, William Hill deals price; Cricket active; Yankee parade quiets market

By Paul Deckelman

New York, Nov. 6 - General Maritime Corp. successfully priced a $300 million offering of eight-year notes on Friday, closing out a moderately busy week which saw about $2 billion in dollar-denominated paper price, plus the equivalent of at least another $1 billion in sterling-denominated bonds.

One of those sterling names, William Hill plc, priced an upsized £300 million of seven-year bonds during the session.

That set the stage for primary market participants to look forward to the upcoming week, when offerings from Belo Corp., Viasystems Inc., Triumph Group Inc. and Columbus International Inc. are expected to price, with still other deals coming to market a distinct possibility.

In the secondary arena, the new General Maritime bonds were seen having moved solidly higher - a gain of around 2 full percentage points.

Among secondary names without any new-deal connections, traders saw the volume on Cricket Communications Inc.'s 9 3/8% notes due 2014 leap skyward, although the bonds themselves were easier following the company's release of quarterly numbers.

But apart from names with news attached to them, traders saw most bonds little traded; what did emerge, one said, was a "mish-mosh" of various assorted names with no overriding theme.

Several mentioned the Broadway ticker-tape parade for the World Series champion Yankees as a factor in holding down the activity level, noting that it certainly gave New York-based market participants a perfect excuse to cut out early and make a de facto three-day weekend rather than trade bonds.

General Maritime sails in

General Maritime, a New York-based oil tanker fleet operator, priced a restructured $300 million offering of eight-year senior unsecured notes (B3/B) during the afternoon. Those 12% notes due 2017 priced at 97.512 to yield 12½%.

The Rule 144A/Regulation S offering, which was sold with registration rights, came to market after having been tweaked a little to make it more attractive to potential investors. An informed source told Prospect News that an extra year of call protection had been added at mid-week, increasing the non-call period to four years from the originally proposed three years.

J.P. Morgan Securities Inc. and Goldman Sachs & Co. were the joint bookrunners.

The company plans to use the proceeds to repay outstanding borrowings under its bank credit facilities and for other general corporate purposes.

General Maritime bonds move up

When the new General Maritime bonds were freed for secondary dealings, a trader said that "it looks like they had a very good move up - over 200 basis points."

He saw the notes rise from their 97.512 issue price to a 99-99¾ range in initial deals, before finally tightening a little to end in a 991/4-99¾ context.

William Hill places a bet

The day's other new deal came from British bookmaking and gaming concern William Hill, which priced £300 million of new 7 1/8% senior guaranteed bonds (Ba1/BB+) due 2016 at 99.324 to yield 7¼%.

The 7¼% yield was at the tight end of pre-deal market price talk which had circulated on Thursday, envisioning a yield in the area of 7 3/8%.

The issue, guaranteed by the William Hill Organization Ltd., was upsized to £300 million from the originally size of up to £250 million.

Barclays Capital Inc., RBS Securities and Lloyds TSB Bank plc ran the books on the deal.

William Hill said it plans to use the proceeds to pay down some of its bank debt, part of its previously announced strategy to diversify its debt facilities. The company will pay two debt facilities scheduled to mature in 201, thus shifting that £300 million from bank debt to bonds, while leaving another bank facility, totaling £538.5 and coming due in March 2012, in place.

William Hill said that as of June 30, its net debt for covenant purposes was £636.7 million. It said that its interest costs for 2009 and 2010 will be unchanged as a result of the bond issue.

Recent deals trading around

Among recently priced issues, a trader saw Norwegian Cruise Line's 11¾% senior secured notes due 2016 firm slightly at 99 - but that was all that he saw in the credit.

The Miami-based cruise ship operator had priced its $450 million of bonds on Wednesday at 98.834 to yield 12%.

He also saw Service Corp. International's 8% notes due 2021 at a wide 971/2-99 range "first thing this morning," but said the bonds tightened later to 97 7/8-981/4.

The Houston-based deathcare giant priced its $150 million of notes on Thursday at 98.115 to yield 8¼%

Another trader, however, said he had not seen any trace of the Service Corp. bonds, noting that it was "a small issue and likely got put away" by a few accounts.

Colt Defense LLC's 8¾% notes due 2017 were seen having firmed to par bid, 101 offered "first thing in the morning," later coming in to be left bid at 100 5/8. It was still well up from the 98.591 at which the Hartford, Conn.-based military small-arms maker had priced its $250 million of notes - upsized from $200 million - on Tuesday to yield 9%.

A busy week ahead

A high yield syndicate source said Friday that apart from the General Maritime and William Hill deals, there was nothing going on Friday in the primary sphere. He said that the near-term forward calendar really consisted of four items expected to price during the upcoming week.

Dallas-based TV broadcaster Belo Corp. is shopping $275 million of senior notes due 2016 around via J.P. Morgan and Bank of America Merrill Lynch. It began a short roadshow for the issue on Thursday, and is expected to remain on the road until Tuesday, when pricing is expected.

Viasystems, a St. Louis-based electronic components provider, is marketing $220 million of senior secured notes (B+) due 2015 via Goldman Sachs and Wells Fargo Securities. Exact timing of the pricing is still up in the air at this point.

Triumph Group, a Wayne, Pa.-based supplier of aerospace systems and components, plans to bring $175 million of senior subordinated notes due 2017 (Ba3/B+) to market via joint bookrunners B of A Merrill Lynch and J.P. Morgan.

And Columbus International, an undersea network cable services provider, will price $450 million of senior secured notes due 2016 (B2/B) via Citi, Standard Bank and RBC Capital markets as joint bookrunners. The deal is scheduled to roadshow through Nov. 12, with pricing expected after that.

Besides those four deals a banker told Prospect News during the week that he anticipates being involved in as many as five transactions, including a deal in the $500 million range from the industrial sector. That banker also had visibility on as many as four additional deals - including one that would be substantially larger than the aforementioned deal from the industrial sector.

Market indicators mostly steady

Back among the existing bonds not connected with the new-deal market, a trader saw the CDX Series 13 index unchanged at 92½ bid, 93 offered on Friday, after having risen 3/8 point on Thursday. The widely followed market gauge thus firmed on the week from the 91¾ bid, 92 level at which it had closed out the previous week on Friday, Oct,. 30

Meanwhile, the KDP High Yield Daily Index edged up by 2 basis points on Friday to end at 69.41, after having gained 12 bps in Thursday's dealings. Its yield narrowed by 1 bps to 8.68%, after having come in by 4 bps the previous session. The KDP index was thus little changed from the levels it held the previous Friday - 69.44, with a yield of 8.70%

In the broader market, advancing issues held their lead over decliners for a seventh consecutive session on Friday, although their lead dwindled to less than two dozen issues, out of nearly 1,500 tracked.

Overall market activity, as measured by dollar-volume levels, slid by 25% from Thursday's pace.

"It was a little boring" was how one trader put it,.

There was "not a whole lot" going on," another trader said

Several traders noted the impact the Yankees victory parade up lower Broadway - right through the heart of the Financial District - had on reducing market activity. "People in New York were watching the Yankee parade instead of CNBC," one trader not based in New York said.

Another said that after 11 a.m. ET - about the time the parade was kicking off - "volume really slowed down."

He agreed with the suggestion that market players would latch onto "any chance for a celebration," and added that a lot of participants were "not anxious" to do anything - a sentiment which would only intensify going toward the end of the quarter and fiscal year.

Cricket trades lower

Leap Wireless International's bonds remained among the most active traders, one day after the company posted its quarterly report.

A trader said about $60 million to $70 million of the 9 3/8% notes due 2014 issued by Cricket Communications Inc. traded. However, they were unchanged around 951/4.

San Diego-based Leap reported revenues of nearly $600 million for the third quarter. That was up 20.7% year-over-year, but down from market estimates of $619.7 million.

The net loss was $65.4 million, or 85 cents per share, compared to a loss of $47.3 million, or 72 cents per share, in the third quarter of 2008.

"The company delivered solid financial performance in what is seasonally our most challenging quarter, as reflected in our 25% year-over-year growth in adjusted OIBDA and 35% year-over-year increase in total customers," said Doug Hutcheson, president and chief executive officer, in a statement published Thursday.

"We also delivered these results in the midst of an increasingly competitive landscape in the pre-paid wireless space as well as a turbulent economic environment, which included rising unemployment and reduced discretionary income in our key demographic segments. The competitive and economic environment contributed to the year-over-year increase in churn in our existing markets which affected net customer additions.

CIT disappears

A trader said that CIT Group Inc. "is done" as far as any kind of real moves or volumes, now that most of the bonds have converged in the high 60s following the New York-based commercial lender's bankruptcy filing, announced this past Monday.

"They're quoted 68-69, and everybody's just waiting for the new paper to come out." He said that "they're still trading - but it was not actively quoted."

"68-69 covers most of them. I wouldn't say there was that much activity," he added.

In other names, Catalyst Paper 's 8 5/8% notes due 2011 "were pretty much unchanged," though he saw them actively traded again. He pegged them in the high 50s, around 581/2-591/2, on "good volume."

Another trader - who noted that the paper had fallen earlier in the week to as low as 57½ on bearish guidance from the company and lackluster results, said that it had traded back up on Friday, up ½ point to 58½ bid, 59½ offered.

He also saw its 7¾% notes due 2014, which had fallen as low as 48¾ bid at mid-week, were "up 1 or 2" points Friday to 50½ bid.

Stephanie N. Rotondo contributed to this story

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