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High yield bond trading prices near 2012 peak in year’s final reading

The average bid of high-yield flow-name bonds in the secondary dipped two basis points in today’s reading, to 106.38% of par, yielding 6.21%, according to LCD, a division of S&P Capital IQ.

The essentially unchanged reading puts the average up 945 bps in the year at this final 2012 observation and higher by 1,845 bps since the trough of 87.93 recorded on Oct. 4, 2011. More recently, though it’s the first reading in the red after eight consecutive gains, for a 383-bps run-up since mid-November.

The reading at 106.4 on Tuesday eclipses the previous 2012 peak of 106.15 that was logged three months ago, on Sept 18. That reading was, in fact, the all-time high of the average since LCD began collecting data on the flow-name bond sample in 2001.

Gains total 24 bps in the week and 77 bps dating back two weeks. Despite the small decrease today, the firm tone in the high-yield market has been fairly resilient in recent sessions albeit on thinning flows as market activity begins the wind down into the holiday break.

Moves among sample constituents were mixed with five gainers countered by four decliners while six were unchanged. Most movers in either direction were modest, though Dish Networks 6.75% notes stand out with a 1.25-point slump, to 114.75, as the issuer hit the market with a $1.5 billion drive-by new issue.

Despite the rangebound price reading, the average yield to worst slipped nine basis points, to 6.21%, and the average option-adjusted spread to worst tightened eight basis points, to T+534, or L+523, swap-adjusted.

For reference, the averages at the 2007 peak were 7.69%, T+290, and L+237, though at the more recent peak in September they were 6.27%, T+538, and L+523. And recall that at a recent trough three months ago, yields and spreads were 8.47%, T+745, and L+710. – Staff reports

 

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Bankruptcy claims trading up slightly in November, topping $5B (face value)

The secondary market for bankruptcy claims saw a slight uptick in November, with more than $5 billion in face value of claims traded, up from about $4.4 billion in October, according to the latest report from SecondMarket.

MF Global once again saw the most claims change hands, but with only 370 trades at a face value of about $354.5 million, the former derivatives broker saw a significant drop from October’s 565 transfers at more than $1.6 billion in face value. (See, “MF Global bankruptcy claims trading doubled in October, report says,” LCD News, Nov. 28, 2012).

Lehman Brothers Holdings and Lehman Brothers accounted for the majority of trades in dollar value in November, at about $3.7 billion and $768 million, respectively.

November also saw the second highest number of new bankruptcy filings this year, with 14 new major cases filed. Overseas Shipholding Group, the largest U.S. tanker operator, brought in the lion’s share of pre-petition liabilities, at more than $2 billion after the company failed to obtain a federal loan guarantee.

Seven cases began trading for the first time in November including, including Global Aviation Holdings, which won bankruptcy court confirmation of its reorganization plan on Dec. 10, and A123 Systems, which earlier this month won court approval to sell most of its assets to Wanxiang America Corp. for $256.6 million. – John Bringardner

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Dish Network advances in trading amid steady high yield bond mart

Dish Network 5% notes due 2023 are pegged at 100.5/101 in the secondary high-yield market today, against par issuance late on Wednesday via sole bookrunner Deutsche Bank, according to sources. Some recent trades were reported in the BB-/Ba2 paper at 100.625, though not publicly, as the offering came under Rule 144A, the sources add.

The $1.5 billion deal was upsized by $500 million amid heavy demand as the issuer made a surprise last-ditch effort to capture investor dollars before the uncertainties of the new year. Terms were inked at the wide end of talk, and offered about 40 bps to pari passu paper from the issuer due 2022, trade data show.

The company yesterday announced the deal at its typical issuing entity, DISH DBS Corporation. Proceeds will be used for general corporate purposes, which may include spectrum-related strategic transactions, according to a company statement.

Away from Dish, the secondary market appears rangebound, though activity is light. Other benchmarks are steady, such as EP Energy 9.375% notes due 2020, which are still trading at 112.5. Other new issues remain in demand, like U.S. Food 8.5% notes due 2019, which are 102/102.5 against a reopening at 101.5, according to sources. – Matt Fuller

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Petroleum Geo-Services add-on bonds price at 107.5 to yield 5.87%

Petroleum Geo-Services yesterday completed an add-on offering of senior notes via sole lead UBS, according to sources. Terms on the quick tap were inked at the tight end of talk and at the target size of $150 million, bringing the total outstanding to $450 million. Proceeds will be used for general corporate purposes. Lysaker, Norway-based Petroleum Geo-Services is an oilfield-service company that provides geophysical and reservoir services worldwide. Terms:

Issuer Petroleum Geo-Services
Ratings BB/Ba2
Amount $150 million
Issue add-on senior notes (144A-life)
Coupon 7.375%
Price 107.5
Yield 5.868%
Spread T+488
FRN eq. L+477
Maturity Dec. 15, 2018
Call nc3 (originally nc4)
Trade Dec. 19, 2012
Settle Dec. 27, 2012 (T+5)
Books UBS
Px talk 107-107.5
Notes w/ two-year equity clawback for 35% @ 107.375; carries T+50 make-whole call; w/ change of control put @ 101; total now $450 million; original $300 million priced in November 2011 @99.864

 

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Dish Network bonds price at par to yield 5%; terms

Dish Network this afternoon completed an offering of senior notes via sole lead Deutsche Bank, according to sources. Terms on the drive-by were inked at the wide end of talk, though after a $500 million upsizing, to $1.5 billion. The company today announced the deal at its typical issuing entity, DISH DBS Corporation, with issuance under Rule 144A. Proceeds will be used for general corporate purposes, which may include spectrum-related strategic transactions, according to a company statement. Terms:

Issuer Dish Network / DISH DBS Corp.
Ratings BB-/Ba2
Amount $1.5 billion
Issue senior notes (144A)
Coupon 5%
Price 100
Yield 5%
Spread T+319
FRN eq. L+314
Maturity 10-year
Call nc-life
Trade Dec. 19, 2012
Settle  n/a
Jt. Books DB sole
Px talk 4.875-5%
Notes upsized by $500 million.
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Dispensing Dynamics bonds price at 98 to yield 13%; terms

Dispensing Dynamics International (DDI), a maker of paper-towel and soap dispensers, this afternoon completed an inaugural offering of secured notes via sole lead Jefferies, according to sources. The deal comes under Rule 144A for life, with terms at prescribed guidance. The company seeks capital to fund a dividend to shareholders and to refinance debt. The latter includes term debt, borrowings under a revolving credit line, and seller notes, according to sources. Industry, Calif.-based DDI is owned by management and Kinderhook Industries, which purchased a controlling stake in the business in May 2007. Terms:

Issuer Dispensing Dynamics International
Ratings B-/B3
Amount $130 million
Issue secured notes (144A for life)
Coupon 12.5%
Price 98
Yield 13.055%
Spread T+1,228
FRN eq. L+1,217
Maturity Jan. 1, 2018
Call nc3
Trade Dec. 19, 2012
Settle Dec. 31, 2012 (t+7)
Jt. Books JEFF
Px talk 12.5% @ 98
Notes upsized by $5 million.
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US Foods add-on high-yield bonds price at 101.5 to yield 8.1%; terms

U.S. Foods this afternoon completed a second add-on offering of 8.5% senior notes, sources said. Bookrunners were Deutsche Bank and KKR, and terms were inked at talk after a $75 million upsizing, to $175 million, putting the total outstanding in the series at $975 million. Unlike the original issuance in 2011 and an add-on last month, which both totaled $400 million and backed loan repayments, proceeds from today’s deal will be used to pay down the company’s onerous 11.25% subordinated notes due 2017. The $550 million issue dates to the 2007 LBO of the foodservice concern by Clayton Dubilier & Rice and Kohlberg Kravis Roberts & Co., and although unsuccessfully syndicated, it was converted from bridge debt to bonds in 2008. The first call tripped in June and is current, at 105.625. Terms:

Issuer US Foods
Ratings CCC+/Caa2
Amount $175 million
Issue add-on senior notes (144A)
Coupon 8.5%
Price 101.5
Yield 8.098% (to worst) / 8.198% (to maturity)
Spread n/a
FRN eq. n/a
Maturity June 30, 2019
Call nc1.5 (originally nc3)
Trade Dec. 19, 2012
Settle n/a
Books DB/KKR
Px talk 101.5 area
Notes upsized by $75 million; total now $975 million; original $400 million priced May 2011 @par; initial $400 million add-on priced Nov. 29@101.5; 1st call @ par +75% of coupon
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EP Energy PIK toggle notes price at 99.5 to yield 8.25%; terms

EP Energy today completed an offering of senior PIK toggle notes via joint bookrunners Citi, Deutsche Bank, RBC, Nomura, Morgan Stanley, BMO, Credit Suisse, Goldman Sachs, and J.P. Morgan, according to sources. Terms were inked tight to talk and at the target size of $350 million. Proceeds from the deal will be used to fund a dividend to shareholders. Issuance comes under Rule 144A for life at EPE Holdings LLC and EP Energy Bond Co. EP Energy was formed by the $7.1 billion buyout of El Paso Corp.’s exploration-and-production business by a group comprising Apollo Management, Riverstone Holdings, Access Industries, and other investors. Terms:

 

Issuer EPE Holdings / EP Energy BondCo
Ratings B/B3
Amount $350 million
Issue senior PIK toggle notes (144A-life)
Coupon 8.125% cash / 8.875% PIK
Price 99.5
Yield 8.25%
Spread T+748
FRN eq. L+735
Maturity Dec. 15, 2017
Call nc1; 1st call @ 102, then 101, par
Trade Dec. 18, 2012
Settle Dec. 21, 2012 (T+3)
Joint Bookrunners Citi/DB/RBC/Nom/MS/BMO/CS/GS/JPM
Co-Leads
Co’s.
Px talk 8.25-8.5%
Notes w/ 1-year equity clawback for 100% @ 102; carries T+50 make-whole call.
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Avaya secured notes price at par to yield 9%; terms

Avaya today completed an offering of secured notes via bookrunners Citi, Credit Suisse, Deutsche Bank, J.P. Morgan, and Morgan Stanley, according to sources. Pricing of the drive-by deal came at the tight end of talk and at the target size of $290 million. Proceeds from the deal will be used to repay terms loans in connection with a loan extension offer and amendment launched last week under which Avaya seeks to extend the maturity of a portion of its non-extended B-1 term loan by nearly 3.5 years, to March 31, 2018. Terms:

 

Issuer Avaya
Ratings B/B1
Amount $290 million
Issue secured notes (144A-life)
Coupon 9%
Price 100
Yield 9%
Spread n/a
FRN eq. n/a
Maturity April 1, 2019
Call nc2.5
Trade Dec. 18, 2012
Settle Dec. 21, 2012 (T+3)
Joint Bookrunners Citi/CS/DB/JPM/MS
Co-Leads
Co’s.
Px talk 9-9.25%
Notes w/ three-year equity clawback for 35% @ 109; carries T+50 make-whole call; w/ change-of-control put @ 101.
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IAC/InterActive notes price at par to yield 4.75%; terms

IAC/InterActive today completed an offering of senior notes via bookrunners J.P. Morgan, Goldman Sachs, Bank of America, BNP, PNC, and RBC, according to sources. Pricing was at the tight end of guidance and at the target size of $500 million. Issue ratings of BB+/Ba1 were assigned after S&P and Moody’s upgraded by one notch the corporate rating of IAC to BB+/Ba1, citing operating performance. New York-based IAC is a media and internet company with over 150 brands and products, including Match.com, Ask.com, and CityGrid Media. Terms:

 

Issuer IAC/InterActive
Ratings BB+/Ba1
Amount $500 million
Issue senior notes (144A)
Coupon 4.75%
Price 100
Yield 4.75%
Spread T+294
FRN eq. L+289
Maturity Dec. 15, 2022
Call nc5
Trade Dec. 18, 2012
Settle Dec. 21, 2012
Joint Bookrunners JPM/GS/BAML/BNP/PNC/RBC
Co-leads
Co’s.
Px talk 4.75-5%
Notes