US high-yield market grinds to halt

By Mariana Santibanez

NEW YORK, Aug 8 (IFR) - The US high-yield market ground to a halt this week as thin liquidity and nerves over massive outflows spurred bankers to push back trades until after the Labor Day holiday.

Just six trades had priced by early afternoon Friday for a total US$1.715bn - the slowest week of the year, according to IFR data.

Goldman Sachs (NYSE: GS-PB - news) and RBC are also expected to print an acquisition finance deal for NCSG Crane & Heavy Haul Corporation by the end of the day, but that has also been a tough sell in the rockiest market conditions in over a year.

Initial whispers on the US$310m senior secured five-year bond first emerged at 7.5%-8% as marketing for the deal came to an end on July 31. But that widened twice, first to 9%, and again to 9.5%.

One investor said books were only half full early on Thursday.

There are three energy deals in the pipeline for Rooster Energy, American Eagle Energy and Linc Energy (Other OTC: LNCGY - news) , which are aiming to price over the next week.

A muted market reaction to the US$7.068bn outflows for the week ended Wednesday - the biggest weekly outflow since Lipper records began in 1992 - as well as a drop in US 10-year Treasury yields to just 2.35%, may lend some support.

Rooster Energy (CDNX: COQ.V - news) is still whispering 10% area for a US$100m five-year non-call two senior bond. Proceeds will fund debt, a cash portion of an acquisition and general corporate purposes.

Triple C rated American Eagle Energy is planning a US$175m bond to refinance an existing credit facility and for general corporate purposes. The structure was revised to a five-year non-call two senior secured note offering.

Linc Energy, meanwhile, is in market with a US$125m first lien senior secured note to repay existing debt of restricted subsidiaries and for general corporate purposes.

WAIT AND SEE

For other borrowers, wider price talk, induced by volatile conditions didn't make sense and they are hoping conditions will stabilize after the summer break.

Both Jupiter Resources and Milestone Aviation postponed bond plans this week. Two market sources also said the US$1.625bn bond financing for the buyout of Safeway (NYSE: SWY - news) had also been postponed until September, even though the US$4.6bn loan backing the deal was heard to be well oversubscribed.

Deals that did price have performed well in secondary - a welcome relief as new issues prior to that have dipped well below reoffer.

US Shale Solutions, Brundage-Bone Concrete and BWAY Intermediate crossed the finish line late Thursday, albeit coming with hefty coupons.

The US$210m three-year non-call life bond for US Shale priced at 97 with a 12.5% coupon to yield 13.737%, while the US$140m issue for Brundage-Bone priced at par to yield 10.375%. Both deals were led by Jefferies, and Brundage traded up 1.5 points in the secondary.

Triple C rated container manufacturer BWAY Intermediate priced a reduced US$650m seven-year non-call three deal, from US$770m initially, at 99.364 with a coupon of 9.125% to yield 9.25%. Price talk had been set at 9% area.

It had climbed to 99.75 by Friday.

The bond, part of a broader financing that included a US$1.1bn term loan, will repay its existing term loan, senior notes, and payment-in-kind notes, as well as paying a US$200m dividend to sponsor Platinum Equity. The private equity firm completed the acquisition of the BWAY Parent Company in November 2012 for US$1.24bn from Madison Dearborn Partners.

Among other deals to get done was a BMO-led US$300m eight-year non-call three bond for Warren Resources (NasdaqGS: WRES - news) , which traded up a couple of points to 101. It priced at 98.617 with a 9% coupon to yield 9.25%.

Calgary-based energy company Sunshine Oilsands (HKSE: 2012.HK - news) was finally able to price a US$200m bond late Monday, which will help it complete the first phase of the West Ells project. But it priced more than two months after beginning investor meetings on May 22

and after postponing the deal on July 1.

Imperial Capital changed the structure of the deal by downsizing to US$200m from US$325m, while also shortening to a three-year non-call one from a five-year non-call two maturity.

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

DEALS PRICED:

INTREPID AVIATION GROUP HOLDINGS

Intrepid Aviation Group Holdings, announced a US$150m add-on to its 6.875% 2/15/19 notes via JEFF. 144a/RegS w/o reg rights. The add-on will be fungible immediately. First (Other OTC: FSTC - news) call: February 15, 2016 at 103.438. UOP: GCP including the purchase of aircraft. BIZ: Global leasing company that acquires and leases primarily wide body commercial passenger aircraft under long-term leases to a diverse group of airlines throughout the world.

- Original US$300m deal sold on January 24, 2014.

PRICE TALK: US$102.00.

PRICED: US$215m. Cpn 6.875%. Due 2/15/19. Ip USD102 (plus accrued interest from 8/15/14). YTM 6.356%. Call schedule: 2016 at USD103.438, 2017 at USD101.719, 2018 and thereafter at par. First pay 2/15/15. Equity clawback up to 35% at USD106.875 prior to 2/15/16. USD101 COC put. Settlement date 8/18/14. Cusip # 46122XAA1.

DEALS PIPELINE:

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 (KSE: 078935.KS - news) (left)/RBC. 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.

WHISPERS: Whispers heard initially at 7.5%-8%, then 9%, then 9.5%.

ROOSTER ENERGY

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 (HKSE: 0888-OL.HK - news) : 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 next week

Whispers: 10% area

LINC ENERGY

Linc Energy announced a US$125m first lien senior secured notes via DBS (SES: D05.SI - news) /CS/JPM. UOP: to repay existing indebtedness of certain of our restricted subsidiaries that will guarantee the Notes, for general corporate purposes, and pay fees and expenses associated with offering.

BIZ: Is focused on both conventional and unconventional oil and gas production. The Company owns a diverse and world-class commodity portfolio that includes oil, gas, shale and coal.

AMERICAN EAGLE ENERGY CORP

American Eagle Energy Corporation (AMEX: AMZG - news) announced a US$175m senior secured note offering due 2019 via GMP(expected). UOP: to refinance its existing credit facility, for general corporate purposes (including working capital), and to pay fees and expenses associated with the offering of the Notes and those related to its existing credit facility.

BIZ: Based in Littleton, Colorado, American Eagle Energy Corporation is an independent exploration and production operator that is focused on acquiring acreage and developing wells in the Williston Basin of North Dakota, targeting the Bakken and Three Forks shale oil formations.

RATED: Caa1 by Moody's.

UPDATE: Structure will be 5-year nc2 senior secured notes. Roadshow go into next week (11Aug), with pricing expected shortly thereafter.

VOLUME DATA:

August

6 Tranches $1.715 BLN

This Week's Volume

6 Tranches $1.715 BLN

This Year's Volume

380 Tranches for $201.652 BLN

WEEKLY TRANCHES BY MATURITY HY CORPS

2 X 3-YRS $410m

1 X 5-YRS $215m

2 X 7-YRS $790m

1 X 8-YRS $300m

6 Tranches $1.715 BLN

S&P Ratings

NR 2 Tranches $415m

CCC 1 Tranche $650m

B- 2 Tranches $510m

B 1 Tranche $140m

6 Tranches $1.715 BLN

Date Issuer Size

8/8/14 Intrepid Aviation $215m

8/7/14 BWAY $650m

8/7/14 US Shale Solutions $210m

8/7/14 Brundage-Bone $140m

8/6/14 Warren Resources $300m

8/4/14 Sunshine Oilsands $200m (Reporting by Mariana Santibanez; Editing by Natalie Harrison)