Two trades push high-yield week to US$4.133bn

By Mariana Santibanez

NEW YORK, July 30 (IFR) - Just two high-yield issuers priced deals in the market Wednesday for a combined US$1.175bn, taking the week's volumes to US$4.133bn.

The trades from PaperWorks and Mallinckrodt (NYSE: MNK - news) showed investors are still keen on putting cash to work, with the former heard to be six times oversubscribed despite partly financing a dividend.

Market participants also had their eye on growth data and the Federal Reserve's statement. US GDP numbers came in better than expected, while the Fed scaled back its monthly asset purchases by another US$10bn as expected and reiterated that it was in no hurry to raise rates.

But the biggest talking point in the high-yield market remains the outflows from the asset class.

"We've been seeing outflows every day since July 4," said one syndicate banker.

Bankers said the market remains open but noted that investors have been more disciplined of late - and feeling less inclined to buy everything on offer.

Many investors seem unfazed by the more than US$4bn that has left the asset class in the previous two weeks or so, and are choosing to take advantage of more influence over pricing.

"Yes, fund flows have been negative for the past few weeks, but it's nothing compared to what we saw last year," said Dan Doyle, a high-yield portfolio manager at Neuberger Berman.

Today's pair of issuers priced their deals at the wide end of, or in line with, price talk.

Pharmaceuticals firm Mallinckrodt International Finance priced a new US$900m eight year non-call three bond on the wide end of 5.50%-5.75% price talk, offering investors a 25bp new issue concession versus the 5.5% yield on outstanding 4.75% 2023s to get done.

The bond was seen above par pricing in the secondary at 100.75.

Proceeds will fund the acquisition of US biopharmaceutical company Questcor.

Packaging company PaperWorks Industries meanwhile saw its upsized US$275m bond jump two and a quarter points after printing at par to yield 9.5%.

Only three deals were added to the high-yield pipeline Wednesday.

Aircraft operating lease company Milestone Aviation Group is looking to raise a US$350m three-year bond to pay down existing debt, while William Lyons is targeting Thursday pricing for a two-tranche trade consisting of a US$250m 8-year non-call three senior bond and a US$50m add-on to existing 5.75% 2019 bonds.

The third trade, from Sunshine Oilsands (HKSE: 2012.HK - news) , was postponed on July 1.

The structure of the deal has been changed dramatically since then.

It has been downsized to US$200m from US$325m, while the structure has been shortened to a three-year non-call one from a five-year non-call two.

The notes will no longer have a payment-in-kind feature but will pay a 10% cash coupon instead. The trade is expected to price at a steep discount at 93.801 to yield a hefty 17.%.

Bankers estimate US$4bn-$7bn in supply per week over the next couple of weeks before slowing down in mid-August.

DEALS PRICED:

PAPERWORKS INDUSTRIES INC

PaperWorks Industries Inc, B3/B-, announced a US$250m 5-year nc2 senior secured notes via JEFF(left)/MACQ. 144a/RegS w/o reg rights. UOP: To refinance existing debt and to fund a small equity distribution. BIZ: Leading manufacturer of specialized folding cartons and paperboard. Founded in 2008, PaperWorks Industries, Inc. is a leading North American integrated full-service packaging provider headquartered in Philadelphia, PA.

PRICE TALK: 9.50% area. Total (NYSE: TOT - news) deal size upped to US$270m (from US$250m).

PRICED: US$275m (upped from US$250m). Cpn 9.500%. Due 8/15/19. Ip par. Yld 9.500%. First (Other OTC: FSTC - news) pay 2/15/15. MWC T+50bp prior to 8/15/16. Call schedule: 8/15/16 at USD104.750, 8/15/17 at USD102.375, 8/15/18 and thereafter at par. Equity clawback up to 35% at 109.500% prior to 8/15/16. USD101 COC put. Settlement date 8/12/14 (T+9). Cusip # 69884LAA7.

MALLINCKRODT INTERNATIONAL FINANCE

Mallinckrodt International Finance, expected ratings B2/B, announced a US$900m 8yr nc3 senior notes offering via BARC(left)/DB/CITI/WFS. 144a/RegS for life w/o reg rights. First call at par plus 75% coupon. Guarantors: Guaranteed on a joint and several basis by each of the subsidiaries that guarantee the bank debt. Equity Clawback: Up to 40% for 3 years (Par + Coupon). Change of Control: 101% plus accrued and unpaid interest. UOP: Finance the acquisition of Questcor Pharmaceuticals. BIZ: Global specialty pharmaceutical and medical imaging business based in Dublin, Ireland (Other OTC: IRLD - news) with U.S. headquarters in St. Louis, Missouri, produces specialty pharmaceutical products including generic drugs and imaging agents.

RATED: B1 by Moody's, BB- by S&P.

PRICE TALK: 5.50% - 5.75%.

PRICED: US$900m. Cpn 5.75%. Due 8/1/22 NC3. Ip par. Yld 5.75%. +341bp vs. 1.625% 8/15/22 UST. MWC T+50bp. Equity clawback up to 40% at USD105.75 prior to 8/1/17. USD101 COC put. Call schedule: 2017 at USD104.313, 2018 at USD102.875, 2019 at USD101.438, 2020 and thereafter at par. First pay 2/1/15. Settlement date 8/13/14. Cusip # 561233AA5.

DEALS PIPELINE:

SUNSHINE OILSANDS

Sunshine Oilsands Ltd., ratings Nr/Nr, announced a US$325m 5-year nc2 senior secured note offering via IMPERIAL(left)/MS/SCOTIA. 144a/RegS applies. Roadshows being Thursday (22May) in New York. First call at par plus 3/4 coupon. UOP: Proceeds will be used to fund expenditures related to Phase One ONLY (5,000 barrels / day), settle all outstanding accounts payable, general corporate purposes and prefund 18 months of interest. BIZ: Calgary, Albert-based independent energy company focused primarily on the evaluation, development and production of its oil sands leases in the Athabasca region of Alberta.

PRICE TALK/UPDATE: Deal size downsized from US$325m to US$200m. Notes will have a 10% cash coupon (no PIK), issued at 93.801% for a 17.0% "constant yield." Maturity is now 3-years nc1, changed from originally a 5-year nc2 offering. One year non-call with first call price at 100% on 8/1/15. Pricing expected late this week or early next week (w/c 04Aug).

JUPITER RESOURCES LTD

Jupiter Resources Ltd, ratings tbd, announced a US$1.125bn 8-year nc3 senior notes via CS(left)/TDS/RBC/BARC/GS (KSE: 078935.KS - news) /UBS (NYSEArca: FBGX - news) /DB/NOMURA. Roadshows begin 07/28 with pricing expected later this week. 144a/RegS for life. Call protection: Non-call 3yr then par plus 3/4 coupon. Equity clawback up to 40% within the first 3-years. USD101 COC. UOP: Fund acquisition of Bighorn assets from Encana. BIZ: Private, Canadian E&P company in the Alberta Deep Basin.

Whispers: mid 7%

THE MILESTONE AVIATION GROUP LIMITED

The Milestone Aviation Group Limited, ratings tbd, announced a US$350m 3-year NCL senior note offering via JPM(left)/BAML/DB/NOMURA/STRH/HUNT/JEFF. Pricing expected Aug 5. 144a/RegS for life. UOP: Pay down senior secured debt. BiZ: The first global aircraft operating lease company focused exclusively on the helicopter market. Milestone's global aircraft leasing platform addresses the liquidity needs of a transforming marketplace through 100% operating lease financing. Headquartered in Dublin, Ireland.

WILLIAM LYON HOMES (NYSE: WLH - news)

William Lyon Homes, expected ratings B3/B-, announced a US$300m 2-tranche deal via JPM/(left)/CITI/CS. Structure will include: - US$250m 8yr nc3 senior notes. First call at par plus 50% coupon. - US$50m add-on to its 5.75% April 15, 2019 notes. Original US$150m deal was sold on March 31, 2014. Fungible upon registration and will settle with accrued from 4/15/14.

Pricing is expected Thursday (31Jul).144a/RegS w/reg rights. UOP: to finance a portion of the purchase price of its previously announced acquisition of the residential homebuilding business of Polygon Northwest Homes (the "Polygon Acquisition"), which is expected to close on or before August 15, 2014, subject to the satisfaction of certain closing conditions. BIZ: Headquartered in Newport Beach, California, William Lyon Homes is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada and Colorado. Its core markets include Orange (Other OTC: FNCTF - news) County, Los Angeles, San Diego, the San Francisco Bay Area, Phoenix (LSE: PHNX.L - news) , Las Vegas and Denver.

NCSG CRANE & HEAVY HAUL CORP

NCSG Crane & Heavy Haul Corporation, expected ratings B3/B-, announced a US$310m senior secured second-lien 5yr nc2 notes via GS(left)/RBC. Timing: Monday, July 28 - Thursday, July 31, Monday (7/28) - New York; Group Lunch, Tuesday (7/29) - New York / New Jersey, Wednesday (7/30) - Boston; Group Lunch, Thursday (7/31) - West Coast. 144a/RegS w/o reg rights. Call protection: NC2, Par+75%, Par+37.5%, Par. UOP: The net proceeds from this offering, together with borrowings under the New ABL Facility and an equity contribution from the Sponsors, will be used fund the Acquisition and to pay certain related transaction costs and expenses. BIZ: NCSG provides crane and heavy haul services to various industries such as oil & gas, utilities, forestry, mining and wind energy. NCSG currently serves Alberta, Saskatchewan, B.C., Manitoba, and the Northwest Territories in Canada and Montana, Idaho, North Dakota, Utah, Wyoming, Washington, Oregon, and Texas markets in the United States.

NRG YIELD OPERATING

NRG Yield Operating LLC (NRG Energy (NYSE: NRG - news) ), expected ratings high BB, announced a US$400m 10yr nc5 senior note offering via BAML(left)/CITI/GSRBC. Co-managers are BARC/CS/DB/KEY/MS/MUFJ. Pricing is on hand, including the net proceeds from the issuance of Class expected late this week. 144a/RegS w/reg rights. USD101 COC put. Special call: At the company's election, 101% plus accrued interest if at any time on or prior to October 31, 2014 the purchase the Alta Acquisition is terminated. UOP: In whole or in part, renewable energy projects ("Eligible Green Projects").

Specifically, Yield Operating intends to use the proceeds from the offering, together with cash A common stock by NRG Yield, which proceeds will be contributed to Yield Operating, to fund the aggregate $870 million cash purchase price of the previously announced acquisition of the Alta Wind Facility (the "Alta Acquisition").

WARREN RESOURCES INC (NasdaqGS: WRES - news)

Warren Resources Inc announced a US$300m senior note offering due 2022. BMO left lead. UOP: to fund a portion of the approximately US$312.5m cash purchase price for its recently announced acquisition of the Marcellus assets of Citrus Energy Corporation and two additional working interest owners. BIZ: Warren Resources, Inc. is an independent energy company engaged in the acquisition, exploration, development and production of domestic oil and natural gas reserves. Warren's activities are primarily focused on oil in the Wilmington field in the Los Angeles Basin and the Leroy Pine Project in the Santa Maria Oil Basin, both in California, and natural gas in the Washakie Basin in Wyoming.

UPDATE: Pricing this week

RATED: Caa1 by Moody's

ROOSTER ENERGY (CDNX: COQ.V - news)

Rooster Energy Ltd., expected low single-B or high CCC, announced a US$100m 5-year nc2 senior secured notes via sole-book IMPERIAL. 144a/RegS w/ contingent reg rights. Roadshow: July 17-22. Co-manager is Cowen and Company. Call: Thereafter callable at par plus 3/4 coupon declining ratably every six-months.

UOP: Refinance existing indebtedness, fund cash portion of an acquisition, fund other general corporate purposes and to pay fees and expenses.

Timing: pricing this week

Whispers: 10% area

(Reporting by Mariana Santibanez; Editing by Natalie Harrison and Marc Carnegie)