Williams, Vicorp price; calendar keeps building as Allied Waste plans $650 million deal

By Paul A. Harris

St. Louis, April 6 - The high yield primary market carried on at what sources characterized as an uncharacteristically brisk pre-holiday pace during Tuesday's session, with two deals pricing.

And the pipeline continued to build, most notably with a $650 million two-tranche offering from Allied Waste North America, Inc. The Scottsdale, Ariz. solid waste management company will waste no time making roadshow rounds, as it intends to price the deal Wednesday afternoon.

Meanwhile a trader reported seeing firmness in the existing bonds of Levi Strauss, in an otherwise quiet session in the aftermarket.

Prospect News mentioned the robust forward calendar of pending junk bond deals to one buy-side source Tuesday. The investor expressed the belief that for the foreseeable future the dramatic build-up, which others have noted in these pages, is likely to continue.

"If you as an issuer take the view that rates are going to go up, you want to bring your deal sooner than later," the investor reasoned.

"And as far as the investment banks go, 'Now' is always the time to get your deal done."

Having said that, the investor added that not all credits are faring well these days in junk land.

"It seems like every deal is a blowout or it fizzles," said the buy-sider. "Nothing trades at par. It's either 103 or 98.

"So it's kind of a schizophrenic market."

Allied Waste wastes no time

The busy pre-holiday calendar continued to build on Tuesday.

Allied Waste North America announced plans to price $650 million of bonds in two tranches on Wednesday afternoon.

A conference call is scheduled for 11 a.m. ET Wednesday.

The company is offering $400 million of 10-year non-call-five senior unsecured notes (Fitch B+). UBS Investment Bank, JP Morgan and Deutsche Bank Securities are joint bookrunners.

The company also plans to sell a $250 million bullet tranche of seven-year senior secured notes (Fitch BB-) via joint bookrunners UBS Investment Bank, Citigroup and Credit Suisse First Boston.

Elsewhere, Curative Health Services has scheduled an April 7-19 roadshow for a $185 million offering of seven-year senior notes (B3/B-).

UBS Investment Bank is the bookrunner for the acquisition deal from the Hauppauge, N.Y.-based specialty pharmacy services and specialty healthcare services provider to patients with chronic and serious medical conditions.

Two deals price

Terms emerged on two offerings during Tuesday's session.

The Williams Cos. Inc. and Credit Linked Certificate Trust sold $400 million of five-year senior unsecured certificates of beneficial ownership at par to yield 6¾% via Citigroup.

The certificates came in the middle of the 6 3/8%-6 5/8% price talk.

The above-quoted buy-sider commented that although the Tulsa, Okla.-based natural gas transportation and storage company is a high yield name, the securities it priced on Tuesday were not very "high yielding."

Also pricing was a downsized issue from Vicorp Restaurants Inc.

The Denver-based owner-operator of Village Inn and Bakers Square restaurants brought $125 million proceeds of 10½% seven-year senior notes (B3/B) at 98.791 to yield 10¾%. That level was well wide of the 10% area price talk and the deal was cut in size from $150 million.

JP Morgan and CIBC World Markets were joint bookrunners on the deal.

Proceeds will be used to repay debt. The company canceled its plans to use proceeds from the sale to fund a dividend payment, according to the source.

Seat Pagine Galle talk

Price talk was heard Tuesday on three of the week's remaining deals

The price talk is 8%-8¼% on Seat Pagine Gialle SpA's upcoming €1.15 billion of 10-year senior notes (B3), expected to price on Thursday via Credit Suisse First Boston, Barclays Capital, BNP Paribas and Royal Bank of Scotland.

Meanwhile price talk emerged Tuesday on the two-tranche $415 million offering from Mueller Group Inc., also expected to price Thursday.

Talk is Libor plus 475 basis points on $100 million of 7.5-year senior secured second priority floating-rate notes (B3/B-).

And talk is 9¾%-10% on $315 million of eight-year senior subordinated notes (Caa1/B-).

Credit Suisse First Boston is the bookrunner.

Finally price talk emerged on a $275 million two-tranche offering of notes from Delco Remy International, Inc., expected to price on Thursday.

The Anderson, Ind. manufacturer of automotive products is selling $125 million of five-year second priority senior secured floating-rate notes (B1/B-), which are talked at Libor plus 400 basis points area. Call protection on the floaters was increased to two years from 1.5 years.

The company is also selling $150 million of eight-year non-call-four senior subordinated notes (B3/CCC+), which are talked at a yield in the 9½% area.

Credit Suisse First Boston and Deutsche Bank Securities are joint bookrunner.

Levi paper up

Characterizing Tuesday's session as an extremely quiet one, a trader told Prospect News that the paper of Levi Strauss was headed north, although the source was at a loss to explain its positive trajectory.

The trader said the San Francisco clothier's 7% notes closed at 78.5 bid, 79.5 offered, up 3½ points from the opening level of 75 bid, 77 offered.

The Levi Strauss 12¼% notes rose three points to 79 bid, 80 offered from the open of 76 bid, 77 offered.

Finally, the 11 5/8% gained more than three points to 80 bid, 82 offered from 76.75 bid, 77.75 offered.

Another secondary market source had Levi's notes trading higher by four to five points, with the 121/4s moving to 80 from 76.

NTL dollar notes keep going

Elsewhere a trader saw more firmness in the new dollar-denominated 8¾% notes due 2014 of NTL Cable plc.

The New York City-based cable TV company sold $425 million and €225 million of fixed-rate paper due 2014 (B3/B-) at par last Friday as part of an £811 million multi-tranche bond sale.

"They're going to close 103 bid, 104 offered. They're up three on the bid," the trader said.

The trader specified that they opened the day with a 102.5 bid.

Nortel shrugs off SEC probe

Elsewhere, Monday's news that Nortel Networks Corp. announced that the Securities and Exchange Commission has issued a formal order of investigation in connection with the company's previous restatement of its financial results, did not appear to register a particularly adverse impact on the company's existing bonds.

"The bonds keep hanging in there," a trader said. "They got beaten down a little today but not a lot."

The 6 1/8% notes due 2006 finished at 102 bid, 102.5 offered versus the opening level of 101.5 bid, 102.5 offered.

"They haven't gotten kicked too hard," the trader commented, adding that the "high was 103.75 bid, 104.75 offered, I would say."

Elsewhere, the trader added, telecom paper was largely unchanged.

"There doesn't seem to be much happening. Level 3 is pretty much flat.

"You don't see a whole lot of Nextel today; that one should be going the way of investment grade within six months.

"Lucent is a little stronger - the long end - 84.5 bid, 85.5 offered, up about a point from last week. There is some strength there, but nothing crazy."

Charter deal sparks interest

Finally, news that a Charter Communications operating subsidiary plans to tap the junk market for $1.5 billion - a deal that hits the road Wednesday - perhaps sparked a little play in the St. Louis company's off-the-run debt.

"The 8 5/8% opened up this morning at 83.75 bid, 84.75 offered," a trader said That's the bellwether, and it's up about a half from last week.

"The 8¼% also looks to be a little stronger," the trader added.

"The 11 1/8% and the 10¾% and the 10% are all in that 86-88 or 88-89 kind of range.

"I don't see any movement there from last week."

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