Jaguar finds tight pricing on lone HY issue

By Mariana Santibanez

NEW YORK, Oct 28 (IFR) - Jaguar Land Rover became the latest Double B rated borrower to visit the US high-yield bond market on Tuesday, pricing a US$500m issue at the tight end of talk.

The sole issuer in a generally positive market today, Jaguar priced the five-year non-call life unsecured bond at par to yield 4.25%. It was talked at 4.25%-4.375%.

Jaguar offered a 25bp pickup to its own US$700m 4.125% 2018s, according to a banker familiar with the trade. The deal rose modestly in secondary to 100.625.

Analysts had expected the bond to receive a good reception, due to the company's strong balance sheet, solid financials and positive execution of its new product campaign.

Jaguar's Ba2/BB/BB- rated print brought the week's high-yield tally to US$1.85bn.

Favorable pricing came as the HY CDX was quoted roughly flat to up about 1/8 on the day to 106.98, a trader said. Stocks jumped 1%, with the S&P ending above its 50-day moving average for the first time in about a month as strong earnings eased concerns about the US corporate outlook.

But not all high-yield issuers are finding the reception that want.

Late Monday, homebuilder M/I Homes pulled a US$350m dual-tranche bond after deciding not to increase yields to satisfy investors.

Whispers for M/I's B1/B rated bond were in the high-5% area on the five-year tranche and mid-6% on the eight, but the buy-side did not show significant interest at those yields.

"The market is very strong, but nobody wants to buy a single B homebuilder unless it comes very cheap," said one investor.

"Liquidity in this market is not what it used to be, and bookrunners need to price these credits wider, particularly for eight-year risk as nobody knows what the housing sector will look like in eight years."

DEALS PRICED:

JAGUAR LAND ROVER

Jaguar Land Rover Automotive PLC, existing ratings Ba2/BB/BB-, announced a US$500m 5-year NCL senior unsecured notes via BAML(left)/CITI/CS/JPM(act)/ANZ/DB/STCH(pass). 144A/Reg S for life. USD101 COC put. MWC T+50bp. UOP: General corporate purposes, including supporting the company's growth and capital spending plans. BIZ: Jaguar Land Rover Automotive PLC designs, develops, and manufactures sports cars and all-terrain vehicles bearing the Jaguar and Land Rover marques.

PRICE TALK: 4.25%-4.375%.

PRICED: US$500m 4.25% 5-year (11/15/19) NCL at 100. YTW 4.25%. Spread +276bp vs UST1.75% due 9/30/19. MWC+50bp. CoC at 101%. 1st pay: 5/15/15. Settle: 10/31/14. CUSIP: 47010BAD6.

DEALS PIPELINE:

OPTIMA SPECIALTY STEEL

Optima Specialty Steel, Inc., expected single B expected, announced a US$300m 5-year nc2 senior secured notes via DB(left)/JEFF. Co-manager PNC. Expected to price early next week. Investor (Other OTC: IVSBF - news) call on Tuesday (28Oct) at 12:40pm. 144a/RegS w/o reg rights. USD101 COC put. Equity clawback 35% during the non-call period. UOP: Refinance existing debt and GCP. BIZ: Based in Miami, Florida, Optima Specialty Steel, Inc. engages in the production and distribution of specialty steel products

EVRAZ INC

EVRAZ Inc. NA Canada, ratings Ba3/S&P M/A, announced a US$500m 5-year nc2.5yr senior secured notes via CITI(left)/GS (KSE: 078935.KS - news) . Co-managers are CA, ING, MOELIS, SOCGEN (Paris: FR0000130809 - news) and UBS (NYSEArca: FBGX - news) . Road shows: 10/27 & 10/28: NY & NJ, 10/29: Boston, 10/30 & 10/31: West Coast. USD101 CoC put. 144a for life. Equity clawback up to 35% at par plus coupon within 2.5-years. Call protection: NC-2.5, callable thereafter at par + ½coupon for 6 months, par + ¼ coupon for the next 12 months, and par thereafter. UOP: To repay a portion of the subordinated related party loan from an affiliate of EVRAZ Group SA and to pay transaction related fees and expenses. BIZ: Based in Regina, Canada, manufactures and supplies commodity and specialty steel products in North (Shanghai: 600262.SS - news) America.

MEDIA GENERAL (NYSE: MEG - news)

Media General Inc. announced a US$300m senior unsecured note offering. UOP: together with cash on hand, proceeds from previously announced divestitures and bank borrowings through proposed amendments to its existing credit agreement, will be used to pay a portion of the merger consideration for the business combination with LIN, repay certain existing indebtedness of LIN and pay related fees and expenses. The offering of the Senior Notes will be subject to market and other conditions. BIZ: Media General, Inc. is a leading local television broadcasting and digital media company, providing top-rated news, information and entertainment in strong markets across the U.S. The company owns or operates 32 network-affiliated broadcast television stations and their associated digital media and mobile platforms, in 29 markets.

ESSAR STEEL ALGOMA

Essar Steel Algoma Inc announced a USD625m 2-tranche deal via DB(left)/GS/JEFF. Co-managers are IMPERIAL/CANACCORD. 144a/RegS w/o reg rights. Structure will consist of a $350m 5-year nc2 senior secured notes rated Ba3/B+, and a $275m 7-year nc3 junior secured notes rated B3/B-. Roadshow (HKSE: 0888-OL.HK - news) 10/21, pricing expected mid next week in conjunction with TLB. Roadshow in NY/NJ 10/21-22, Boston 10/23, West Coast 10/24 and Canada 10/27. USD101 COC put. Equity clawback 40% during the non-call period. UOP: Refinance existing debt and GCP. BIZ: Headquartered in Sault Ste. Marie, Ontario, Canada, ESA is an integrated steel producer. Approximately 80% to 85% of ESA's sales are sheet products with plate products accounting for the balance. For the 12 months ending December 31, 2013, ESA generated revenues of C$1.8 billion. Structure is as follows: - US$350m senior secured notes rated Ba3/B+. Mid-7% whisper - US$275m 3rd lien secured notes rated B3/B-. Mid-9% whisper

PRICE TALK: 5-year nc2 sr sec notes at 8% area, 7-year nc3 junior secured notes at 10.5% area. Books close tomorrow (29Oct) at 2pm, pricing thereafter. (Reporting by Mariana Santibanez; Editing by Natalie Harrison and Marc Carnegie)