MultiPlan drive-by, Gardner Denver price, MultiPlan gains; new Chemtura up in heavy trading

By Paul Deckelman and Paul A. Harris

New York, July 22 - Monday's high-yield market saw a continuation of the kind of moderate primaryside activity that had characterized the past week, with slightly over $1.3 billion of new U.S.-dollar-denominated, fully junk-rated paper from domestic or industrialized-country borrowers having priced.

The day's most notable deal came from healthcare plan company MultiPlan, Inc., which priced $750 million of five-year senior PIK toggle notes in a quickly shopped transaction. Traders said that those bonds were being quoted more than 1 point higher in the aftermarket.

There was also a pricing from industrial components manufacturer Gardner Denver Inc. However, that downsized $575 million offering of eight-year notes appeared too late in the session for any kind of secondary dealings.

There meantime was heavy volume in the recently priced eight-year offering from chemical manufacturer Chemtura Corp. Those bonds, which had priced on Thursday and which started trading on Friday, were seen continuing to trade at firm levels Monday, though they came off their peak level for the day.

The traders also saw solid levels in the recently priced notes from Smithfield Foods, Inc. and Schaeffler AG.

Away from deals which have actually priced, junk market syndicate sources saw prospective new issues from Woodside Homes Co., LLC, Parker Drilling Co. and KeHE Distributors, LLC take their places on the forward calendar.

The non-new-deal secondary market meantime remained quiet. However, investors were keeping an eye on RadioShack Corp. ahead of the scheduled release of its latest financial results on Tuesday. Over the weekend, it was reported that the struggling retailer had tapped investment firm Peter J. Solomon Co. to raise funds.

Statistical market-performance indicators turned mixed on Monday, after three straight sessions on the upside.

MultiPlan prices toggle notes

Two issuers tapped the new issue market on Monday. Both brought single-tranche deals, raising a combined total of $1.3 billion.

MultiPlan priced a $750 million issue of five-year senior PIK toggle notes (Caa1/CCC+) at par to yield 8 3/8%.

The yield printed at the tight end of yield talk set in the 8½% area.

Barclays was the lead left bookrunner for the dividend-funding holdco deal. BofA Merrill Lynch and Goldman Sachs were the joint bookrunners.

Gardner Denver downsizes

Gardner Denver priced a downsized $575 million issue of eight-year senior notes (Caa1/B-) at par to yield 6 7/8%.

The deal was reduced from $675 million, as $100 million was shifted to the concurrent bank loan.

The yield came 12.5 basis points tighter than the 7% to 7¼% yield talk.

Deutsche Bank, Citigroup, Barclays, UBS, Mizuho, RBC, Macquarie, HSBC and KKR were the joint bookrunners for the acquisition financing.

Woodside starts roadshow

The active forward calendar built up on Monday.

Woodside Homes Co., LLC and Woodside Homes Finance Inc. began a roadshow on Monday for a $200 million offering of senior notes due in December 2021.

Pricing is expected late this week.

Credit Suisse, Moelis, Citigroup and Wells Fargo are the joint bookrunners.

The North Salt Lake, Utah-based homebuilder plans to use the proceeds to refinance its existing second lien notes and put cash on its balance sheet.

Parker roadshow for Tuesday

Parker Drilling plans to begin a roadshow on Tuesday for a $225 million offering of senior notes (expected ratings B1/B+).

Goldman Sachs, Wells Fargo, BofA Merrill Lynch and RBS are the joint bookrunners for the debt refinancing and general corporate purposes deal.

KeHE to start marketing

KeHE Distributors, LLC and KeHE Finance Corp. plan to begin a roadshow on Wednesday for a $200 million offering of eight-year senior secured second lien notes.

The deal is expected to price during the July 29 week.

BMO is the left bookrunner, and J.P. Morgan is the joint bookrunner.

The Romeoville, Ill.-based specialty, natural and organic, and fresh food distribution company plans to use the proceeds to refinance debt, redeem certain preferred stock and for general corporate purposes.

Maisons du Monde prices

The European high-yield primary market continued to generate a healthy news volume.

France's Maisons Du Monde priced €325 million issue of seven-year senior secured notes (expected B3/B) at par to yield 9%.

Global coordinator Credit Suisse will bill and deliver. Commerzbank and Natixis are joint bookrunners.

Proceeds will be used to finance the acquisition of Maisons du Monde by Bain Capital and management.

The issuing entity is Magnolia (BC) SA, a special-purpose vehicle of the Brest, France-based furniture retailer.

Manutencoop plans roadshow

The European forward calendar also grew on Monday.

Italy's Manutencoop plans to roadshow a €450 million two-part offering of senior secured notes this week.

The deal is coming in tranches of seven-year fixed-rate notes, non-callable for three years, and six-year floating-rate notes, non-callable for one year.

JPMorgan, UniCredit, Banca IMI and Mediobanca are the joint bookrunners.

The Bologna, Italy-based facilities management company plans to use the proceeds to repay debt.

Gamenet promotes five-years

Italian online gaming company Gamenet SpA began a roadshow on Monday for a €200 million offering of five-year senior secured notes (B1//).

The roadshow wraps up on Thursday.

UBS and Credit Suisse are global coordinators and joint bookrunners. UniCredit and Banca IMI are also joint bookrunners.

The Rome-based company plans to use the proceeds to repay debt including shareholder loans.

MultiPlan moves up

In the secondary arena, a trader said that he had seen "zero" trace of MultiPlan's 8 3/8% senior PIK toggle notes on Monday afternoon after their pricing.

However, a second trader said that the bonds had had moved up smartly to 101¼ bid, 102½ offered in initial aftermarket dealings

The New York-based healthcare cost management company's issue had priced at par.

Chemtura up in busy trading

A market source said that Chemtura Corp.'s 5¾% notes due 2021were probably the most active purely junk-rated issue on Monday, with over $35 million having changed hands by the close.

He said that the bonds had moved as high as 101 1/8 during the session, before coming off that peak level to close at 1001/2, which he called a ½ point gain.

"They certainly saw some trading today," a trader at another desk said, in pegging the bonds at 100 5/8 bid, 100 7/8 offered, which he called up by 5/8 point on the day.

Yet another trader said that the bonds had only edged up about 1/8 point on the day overall, quoting them going home at 100½ bid, 101 offered.

Chemtura, a Middlebury, Conn.-based specialty chemicals manufacturer, had priced its quickly shopped $450 million issue at par on Thursday afternoon, after having upsized it from the originally announced $400 million size. The bonds had come to market too late in the session Thursday for any trading, market participants said, but had been seen modestly higher when they were freed for the aftermarket on Friday.

Smithfield, Schaeffler strong

Elsewhere, a trader said that both tranches of Smithfield Foods' $900 million two-art offering continued to trade at a premium to par price at which each had been issued on Friday.

He quoted the Smithfield, Va.-based hog producer and pork produce's new Sun Merger Sub, Inc. 5¼% notes due 2018 at 101 1/8 bid, 101 3/8 offered, and said that the Sun Merger Sub 5 7/8% notes due 2021 were also trading at that level.

A second trader saw the $500 million of the 2018 bonds at 101 bid, 101 5/8 offered. He said that the $400 million of 2021 notes traded in a 101 to 102 bid context.

The tranches had priced on Friday, after the overall size of the deal was increased from the initially announced $800 million. They had both been quoted by a trader having ended last week trading around 101¾ bid.

One of the traders meantime saw Schaeffler's 6 7/8% senior secured PIK toggle notes due 2018 having jumped 1¼ point on Monday to 103 bid, 103½ offered.

Schaeffler, a German manufacturer of ball bearings for use in automotive and industrial applications, sold $1 billion of those bonds last week through the company's Schaeffler Holding Finance BV unit, pricing them at 99.468 on Thursday to yield 7%. They had initially traded up to 102½ bid, 103½ offered, but retreated on Friday to around 101¾ bid, 102¼ offered, the trader said.

That dollar-denominated megadeal was actually a portion of a larger transaction, which also included a €800 million tranche of the same kind of bonds. That paper priced Thursday at 98.428 to yield 7¼%.

Muted secondary market

One of the traders said that away from dealings in Chemtura and other new or recently priced issues, "today was very quiet."

He observed that "it was typical of summer Mondays or Fridays.

"All of the activity is on Tuesday, Wednesday and Thursday."

RadioShack holds before report

RadioShack is slated to release earnings on Tuesday and a trader said the market was waiting to see how those numbers shook out.

"I think people have staked out their bets and are waiting to see [earnings]," he declared.

Against such a backdrop, the company's bonds were about unchanged on the day.

The trader said the 6¾% notes due 2015 were trading around 75, while the 2.5% convertible notes that are scheduled to come due a little more than a week from now, on Aug. 1, were "still right around 97."

Another trader said the straight bonds dipped to 74 before going out with a 76 handle, unchanged on the day and up from the day's lows.

Earlier this month, it was reported that the struggling Fort Worth, Texas-based electronics retailer was looking to hire a financial adviser. Many wondered if the search had anything to do with the looming convertible maturity. As of the end of the first quarter on March 31, the company had $216 million of the converts remaining outstanding from the $375 million that had originally been issued back in 2008.

But soon after, RadioShack released a statement in which it said its liquidity was fine at $820 million as of the end of the first quarter. The company's chief executive went so far as to say that the company had no need of any financing at this time.

Over the weekend, however, news outlets reported that the company had hired Peter J. Solomon Co. to go shopping for funds.

One trader said Tuesday's earnings release and conference call could signal what it ahead and whether the convertible issue will be paid off or not.

Market indicators mixed

Statistical junk market performance indicators turned mixed on Monday - just barely - after aving been higher across the board over the previous three sessions.

The Markit Series 20 CDX North American High Yield index eased by 1/32 point on Monday to close at 106 11/32 bid, 106 13/32 offered, after having risen by 9/32 point on Friday, its third consecutive gain.

But the KDP High Yield Daily Index gained 11 basis points to finish Monday at 74.59 - its 10th consecutive rise, coming on top of the 13 bps rise seen on Friday.

Its yield meantime came in by 5 bps for a second consecutive session on Monday, to close at 5.74%, also its 10th straight narrowing.

And the widely followed Merrill Lynch High Yield Master II Index saw a 10th straight improvement on Monday as it rose by 0.146%, which followed Friday's 0.159% advance.

The latest gain raised the index's year-to-date return to 4.209% from Friday's finish at 4.057%, which had been the year-to-date return's first time above the psychologically significant 4% mark since May 31, when it stood at 4.249%.

The return was still down from its peak level for the year so far of 5.835%, recorded on May 9, though up solidly from its 2013 low point of 0.384%, set on June 25.

Stephanie N. Rotondo contributed to this review

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