Jaguar, split-rated SLM deals drive by; new Denbury busily traded; Trinseo mega-deal up next

By Paul Deckelman and Paul A. Harris

New York, Jan. 23 - Jaguar Land Rover Automotive plc priced a quickly shopped $500 million 10-year offering on Wednesday, high-yield syndicate sources said. The luxury carmaker's deal was the sole dollar-denominated, purely junk-rated domestic or developed-country issue to price during the session, but arrived too late for any kind of secondary dealings.

Junk players also noted a giant-sized split-rated (Ba1/BBB-/BBB-) deal from education finance provider SLM Corp., which did $1.5 billion of two-year and 10-year notes. The latter tranche firmed in the aftermarket.

There meantime was brisk trading in Tuesday's new deal from Denbury Resources Inc. The energy company's 10-year notes traded up a little from their issue price.

Tuesday's other dollar deal, from hospital operator Tenet Healthcare Corp., traded down from the solid aftermarket levels it had initially notched

Tuesday's secured sterling-denominated note offering from Britain's Arrow Global Finance plc meanwhile edged up in aftermarket dealings. The euro-note market also saw a pricing from Ireland's Smurfit Kappa Acquisitions.

Away from the deals which have actually priced, the syndicate sources heard price talk on Trinseo Materials Operating SCA's $1.325 billion secured six-year deal, which is scheduled to price on Thursday.

David Weekly Homes, LLC and Unifrax I LLC hit the road on Wednesday to begin marketing new deals, the sources said.

Statistical indicators of overall market performance were seen higher on the day.

Jaguar Land Rover a blowout

Much of Wednesday's primary market activity either took place in Europe, or was rooted there.

England's Jaguar Land Rover Automotive priced the session's sole dollar-denominated deal, an upsized $500 million issue of 10-year senior notes (Ba3/BB-/BB-) which came at par to yield 5 5/8%.

The drive-by deal, which was increased from $400 million, was a blowout, according to a trader from a high yield mutual fund, who added that the deal was at least partly driven by reverse inquiry.

The yield printed at the tight end of the 5 5/8% to 5 7/8% yield talk. However the trader said that initial conversations had taken place above 6%.

Joint bookrunner Bank of America Merrill Lynch will bill and deliver. Deutsche Bank, HSBC, Lloyds and Morgan Stanley were also joint bookrunners.

Proceeds will be used for general corporate purposes, including support for ongoing growth and capital spending plans.

Smurfit Kappa upsizes

Ireland's Smurfit Kappa Acquisitions priced one of a pair of euro-denominated high yield deals which came on Wednesday.

The Dublin-based packaging company priced an upsized €400 million issue of seven-year senior secured notes (Ba2/BB) at par to yield 4 1/8%.

The deal, which had been in the market overnight, was expanded from the original €300 million.

The yield printed on top of final price talk. Earlier guidance had been set at 4% to 4¼%.

Joint lead manager Deutsche Bank will bill and deliver.

Citigroup, Credit Agricole, Credit Suisse, J.P. Morgan nd Royal Bank of Scotland were also joint lead managers.

Odigeo at the tight end

Spain-based online travel services provider Odigeo priced a €325 million issue of five-year senior secured notes (B3/B) at par to yield 7½%, at the tight end of the 7½% to 7¾% yield talk.

Joint bookrunner Credit Suisse will bill and deliver. Goldman Sachs, Lloyds, SG and UBS were also joint bookrunners.

Proceeds will be used to refinance debt.

SLM split-rated deal

In the crossover market, Sallie Mae priced $1.5 billion of split-rated medium-term notes (Ba1/BBB-/BBB-) in two maturities.

The sale included a reopening of the company's 3 7/8% series A notes due Sept. 10, 2015 to add $500 million. The notes were priced at a spread of Treasuries plus 236.2 basis points.

Also a $1 billion tranche of new 5½% 10-year notes priced at a spread of Treasuries plus 391.9 bps.

Bookrunners were Merrill Lynch, Barclays and Deutsche Bank.

Trinseo talks $1.325 billion

Looking toward Thursday's session, Trinseo Materials Operating SCA and Trinseo Materials Finance, Inc. talked their $1,325,000,000 offering of six-year senior secured notes (B1/B+) to yield 8¾% to 9% on Wednesday.

Deutsche Bank is the left bookrunner. Barclays, HSBC, Goldman Sachs, Scotia, BMO, Mizuho and SMBC are the joint bookrunners.

Unifrax starts roadshow

In other news from the North American market, there were two roadshow announcements.

Unifrax I LLC began a roadshow on Wednesday for a $250 million offering of six-year senior notes (Caa1/B-).

The deal is set to price during the week ahead.

Goldman Sachs, Wells Fargo and KeyBanc are the joint bookrunners.

The Niagara Falls, N.Y.-based supplier of high-temperature insulation products plans to use the proceeds to repay debt and fund an acquisition.

David Weekly markets 10-years

David Weekly Homes began a roadshow on Wednesday for a $200 million offering of 10-year senior notes, which is also set to price during the week ahead.

Credit Suisse, Merrill Lynch and Wells Fargo are the joint bookrunners.

The Rule 144A for life notes become callable in four years at par plus 75% of the coupon. The notes feature a three-year 35% equity clawback and a 101% poison put.

The Houston-based homebuilder plans to use the proceeds to repay revolver debt and for general corporate purposes.

The issuing entities are Weekly Homes, LLC and Weekly Finance Corp.

Jaguar an aftermarket no-show

The day's sole observed pricing among dollar-denominated junk notes - Jaguar Land Rover's 5 5/8% notes due 2023 - drove by too late in the session for aftermarket dealings.

SLM edges up

A trader saw SLM Corp.'s new 5½% notes due 2023 push up to the 98 5/8 bid, 98 7/8 offered level; the Newark, Del.-based education loan provider had priced that $1 billion tranche of bonds at 98.12 as part of its quick-to-market two-part $1.5 billion split-rated deal.

The other part of that transaction - its $500 million add-on to its existing 3 7/8% notes due 2015 - was not seen trading around.

Meanwhile, the company's existing 5 5/8% bonds due 2033 were seen by another market source to have backtracked by 1½ points on the day to 94 ½ bid.

Its busiest issue - the 6¼% notes due 2016 - mostly traded in the same 110 bid context it had traded in on Tuesday, although a small piece moved up to 112 going home, a market source said. Volume was over $10 million, putting it high up on the Junkbondland most actives list, although that was mostly due to just two large-block trades and a lot of off-lots.

Denbury dominates actives

A trader said that Tuesday's $1.2 billion issue of 4 5/8% notes due 2023 from Denbury Resources were "the most active bonds in high yield land by a mile."

He said that the Plano, Texas- based oil and gas exploration and production company's quickly shopped offering, which had priced late in the session on Tuesday at par, "never really did much" in terms of rising from that level. "I don't think they ever traded at 101 [bid], but they've been sort of 100½ bid, 101 offered throughout the day, or maybe a touch lower at the close."

Sure enough, he saw the bonds going home around 100¼ bid, 100½ offered, "closing around their lows."

He said that there had been "140-something trades," many of them presumably round lots.

"That was definitely the most active."

A second source said that over $25 million of the notes had changed hands by mid-afternoon, around the 100½ bid level.

Tenet trades off

Tuesday's other dollar-denominated junk deal, from Dallas-based hospital operator Tenet Healthcare, "saw a lot of action," a trader said.

He said that the quick-to-market 4½% senior secured notes due 2021 had been trading around a 100½ to 100 5/8 bid context pretty much all day.

But that was down from the levels slightly above 101 bid where those bonds had traded on Tuesday after the $850 million issue had priced at par.

A second trader, who had seen the bonds going home Tuesday at 101 1/8 bid, 101¼ offered, pegged them late Wednesday at 100 3/8 bid, 100 5/8 offered.

Arrow Global edges up

Tuesday's issue from Arrow Global Finance of £220 million of 7 7/8% senior secured notes due 2020 edged up in secondary trading Wednesday, a bond market source said.

He quoted the bonds "trading around 100 3/8 to 100 7/8."

Arrow Global Finance sold the seven-year notes at par to yield 7 7/8% on Tuesday.

The issuer is a Manchester, England, purchaser of defaulted consumer debt.

DuPont euro tranche rises

DuPont Performance Coatings' €250 million issue of 5¾% senior secured notes due 2021, which came to market a week ago, rose to 101¼ bid in the secondary market on Wednesday, a source said.

The tranche had priced at par on Jan. 16 and was quoted on Friday at 101 bid, 102 offered.

Those euro notes had been part of a larger two-part offering that also included $750 million of dollar-denominated 7 3/8% notes due 2021, which had priced at par and were seen after that trading in the 103 range.

The two tranches of notes were sold via Flash Dutch 2 BV and U.S. Coatings Acquisition Inc. as part of the financing for Carlyle Group's acquisition of the Wilmington, Del.-based supplier of vehicle and industrial coating systems from chemicals giant E.I. DuPont.

Busy Thursday seen

One of the traders noted the relative lack of new deal activity on Wednesday but suggested that Thursday would likely be a pretty busy day on the primaryside, with Trinseo's mega-deal on the menu and possibly other transactions as well.

He said that "the focus has been on new issues - but if you look at some of the other stuff that has rallied hard today, it's more like Harrah's and Clear Channel - sort of the high-beta CCC-type names that have really performed well."

Harrah's Operating Co. Inc.'s 10% notes due 2018 were among the most actively traded issues on the day, rising 1¾ points to end at 70 bid. Over $22 million of those bonds, which are also sometimes known by the Las Vegas-based casino giant's new name, Caesars Entertainment Corp., changed hands.

Market measures stay strong

Statistical junk market performance indicators were generally better for a fifth straight session on Wednesday.

The Markit Series 19 CDX North American High Yield index gained 3/32 point on Wednesday to end at 102 11/16 bid, 102 13/16 offered, after having risen by 1/16 point on Tuesday. It was the index's fourth straight gain.

The KDP High Yield Daily Index jumped by 14 basis points Wednesday, its third straight gain, to end at 76.05, after having inched up by 1 bp on Tuesday. Its yield declined by 4 bps on Wednesday, to 5.42%, after having been unchanged on Tuesday.

The widely followed Merrill Lynch U.S. High Yield Master II Index was up for a sixth straight session on Wednesday, gaining 0.139%, on top of the 0.063% rise recorded on Tuesday.

That lifted its year-to-date return to 1.806%, a new peak level for the year so far, eclipsing the old mark, 1.665%, which had been notched on Tuesday.

Cristal Cody contributed to this review

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