NEW YORK: Four deals have launched in the high-yield market this morning, all of which will fund refinancings. The largest is Lee Enterprises' USD1.05bn two-part offering through Credit Suisse and Deutsche Bank.
The publishing company is expected to price the deal as USD675m in first lien senior secured notes due in 2017 (non-call three) and USD375m in units that consist of second lien senior secured notes due 2018 (non-call three) and warrants to purchase Lee common stock at a premium.
Proceeds will refinance substantially all of Lee's debt, with includes USD879m of bank debt and USD147m in Pulitzer notes. A roadshow will begin tomorrow with the deal expected to price later this week.
Today, Vail Resorts will price a USD390m eight-year non-call three senior subordinated issue via Bank of America Merrill Lynch, JP Morgan and Deutsche Bank joint books. The deal is talked at 6.625% area. Proceeds will fund the tender offer for all of its USD390m 6.75% senior subordinated notes due 2014.
Chesapeake Midstream Partners LP is offering USD350m in 10-year non-call four senior notes via Credit Suisse, Wells Fargo, Goldman Sachs and RBS joint books. The deal, scheduled to price later this week, will be used to repay the company's revolver.
Calumet Specialty Products Partners LP is in the market with USD375m in eight-year non-call four senior unsecured notes through BofA Merrill and Goldman Sachs joint books. Pricing is expected later this week, with proceeds being used to repay its existing senior secured term loan.
A number of previously launched offerings are also on tap this week. These include Spencer Spirit Holdings, Commercial Vehicle Group, American Rock Salt, Sizzling Platter, Taseko Mines, Sugarhouse HSP, iGate Corp and Builders FirstSource. Taseko Mines just released talk of 7.75%-8% on its USD200m eight-year non-call four senior notes via Barclays sole books. The B3/B rated issue is expected to price tomorrow afternoon.
In the M&A market, Level 3 announced plans to acquire Global Crossing in a USD3bn stock-for-stock transaction, which includes the assumption of roughly USD1.1bn of debt as of December 31, 2010. Level 3 said it has received committed senior secured and senior unsecured financing for USD1.75bn. Covenant Review, an independent credit research firm, said that this implies, but does not guarantee, that some debt will be refinanced. In addition, the Global Crossing bonds don't have a mergers trigger in their change of control covenant. "If this is a true parent-to-parent merger, then there is no 101 downsize protection," according to Covenant Review.
The CDX HY16 was flat this morning at 102.75/102.875.
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