Overnight China announced that they will end the 2 year currency peg to the dollar, which caused a rally in global equities. Asia was up around 2.5-3%, Europe was up around 1.5% and US Equity futures were up a point. With everyone in good spirits this morning and the market pointing to a higher open, the loan market opened up firm in early morning trade. Flow names were out the door up a half a point and most of the higher quality names were up around a quarter point. Recent new issues saw some action and were up around an eighth as some investors look to round out positions. But, for the most party, things were quiet. The LCDX 14 mirrored the action in the equity markets this morning and shot up a half a point to 96 ¾ - 97 1/8, on the China news. However, after taking a big pop this morning, the high was short lived and reality set in. The headline was more symbolic than anything else; the revaluation of the Yuan will be a measured response to controversy that China maintained the peg for there own economic benefit. Down the line it is a positive catalyst as China will now be less competitive on the world stage but it will take time to take hold.
Equities closed the day in the red and the LCDX 14 fell back to unchanged. Cash loans maintained their morning levels but nothing was happening in the afternoon. With little to do and lots headline risk out there, we will continue to see this brief bouts of volatility followed by silence. I do not expect this to change and with the high yield primary heating up again we are going to see less attention in our market, so continue to keep you eyes pealed and look for the next catalyst.
- Landry's Restaurants Inc today announced the Fertitta company has agreed to increase the cash merger consideration payable to holders of common stock to $24.50 from $24. The total value of the transaction is valued at approximately $1.4 billion, Landry's said.
- Liberty Media Corp said on Sunday it plans to spin-off two of its units, its investment arm Liberty Capital and its pay TV and Hollywood studio unit Liberty Starz. Liberty currently trades under three tracking stocks: Liberty Starz and Liberty Capital, as well as Liberty Interactive.
- Visteon Corp's disclosure statement hearing is scheduled for today.
- British television production company Shed Media confirmed on Monday confirmed it was in talks to sell itself to Warner Bros Entertainment Inc, a unit of Hollywood media group Time Warner. There is no certainty of an offer or its terms, Shed Media said in a statement.
- An Ontario court has approved the sale of Canwest Global Communications Corp's newspaper chain and online publishing business to a bondholders' group, Canwest said on Friday. Most of the money from the C$1.1 billion ($1.08 billion) bid will be used to repay about C$925 million in debt, owed mainly to banks, Reuters reported.
- California Coastal Communities Inc has obtained court approval of $184 million exit financing. The company said it will amend its plan of reorganization to provide for repayment of its existing debt in cash.
- Temple Inland Inc is seeking a $600 million, four-year unsecured revolving credit facility, sources said. Bank of America Merrill Lynch, Citi, JP Morgan and Scotia Capital are leads. Pricing opens at LIB+250 with a 55bp undrawn fee based on split ratings of BBB/Ba1.
- Booz Allen Hamilton Holding Corp said it filed with U.S. regulators on Monday to raise up to $300 million in an initial public offering of class A common stock. Banks are invited to join at an upfront fee of 70bp for commitments of $45 million, 55bp for $35 million or 40bp for $25 million.
- JP Morgan has provided a $1.35 billion, 364-day term loan commitment to back Corn Products' $1.3 billion acquisition of the National Starch business of Dutch paints firm AkzoNobel, according to an SEC filing. Pricing is LIB+225 and steps up by 50bp on the 90th day, the 180th day and 270th day of closing. The duration fee schedule is as follows: 75bp after 90 days, 125bp after 180 days and 175bp after 270 days.
- Michael Foods' $790 million, six-year term loan B has priced at LIB+450, the tighter end of LIB+450-475 price talk. The OID has firmed at official talk of 98 and the loan also has a 1.75% Libor floor and 101 soft call protection in year one. The deal will allocate this afternoon.
- CITGO Petroleum Corp's term loans B and C have been finalized at the previously outlined pricing levels after the $300 million, seven-year senior secured notes priced Friday. The TLB is priced at LIB+600 with a 5% year amortization up to year five and call premiums of 102, 102 and 101. The TLC is priced at LIB+700 with a bullet amortization and will be non-callable for the first two years and callable at 102 and 101 in the third and fourth year. Both the TLB and the TLC have a 98 OID and a 2% Libor floor. The $700 million, three-year revolving credit facility was upsized to $750 million. It is priced on a grid at LIB+450, with a 100-150bp upfront fee based on commitment size.
New Issue-High Yield:
- Price talk of 9.50%-9.75% is out on Capella Healthcare Inc USD500m 144A sr notes due 2017 (7y). NC3. B3/B (stable/stable). Via BAML/Citi/Barc joint books, CA, DB, MS as co-managers. W/reg rights.
- Capella Healthcare Inc USD500m 144A sr notes due 2017 (7y). NC3. B3/B (stable/stable). Via BAML/Citi/Barc joint books, CA, DB, MS as co managers. W/reg rights. Investor call at 11am today. UOP: repay credit facility. Equity sponsor: GTCR. Biz provider of general and specialized acute care, outpatient and other medically necessary services in primarily non- urban communities. HQ: Franklin, TN
- El Paso Pipeline Partners Operating Co LLC (NYSE:EPB) USD100m SEC registered add- on to its 6.50% sr notes due 04/01/20. MWCT+50bp. Ba1/BB/BBB- (s/s/s). Via RBS (sole). Off the shelf. Pricing today. Off the investment grade desk. The original USD425m issue priced 03/25/10. UOP: fund a portion of the acquisition of an additional 16% general partner interest in Southern Natural Gas. Biz: owns and operates natural gas transportation pipelines and storage assets. Operating sub of El Paso Pipeline Partners, L.P.HQ: Houston, TX.
- Price talk of 9.75%-10% is out on Michael Foods Inc USD430m 144A Sr Unsec Notes due 2018 (8y). NC4. Rated Caa1/B- (--/negative). Via BAML/BARC/GS. Books close at 5pm today. Pricing tomorrow morning.
- Bankrate Inc USD280m 144A sr sec notes due 2015 (5y). NC3 (MWC T+50bp). Equity call 3y 35%. Expected ratings B2/B. Via Jeffries/RBC joint books. W/reg rights. Roadshow 06/21-30. UOP: partially finance the acquisition of NetQuote Inc and the acquisition of CreditCards.com Inc. The sponsor, Apax Partners, and company management are also contributing equity of USD73m and USD6.7m respectively. Biz: internet-based consumer personal finance network. HQ: North Palm Beach, FL.
- DynCorp International USD455m 144A (with reg rights)/Reg S sr unsec notes 2017 (7y). NC4. Gtd by Issuer"s direct parent and each of its domestic subs. Via Citi/BAML/Barc/DB. Investor call June 22 at 12pm. Proceeds will be used to finance the proposed acquisition of Dyncorp International Inc; repayment of existing debt; associated fees and expenses. DynCorp International is a global government services provider in support of U.S. national security and foreign policy objectives, delivering support solutions for defense, diplomacy, and international development. HQ: Falls Church, VA.
- Valeant and Biovail have secured a $2.8 billion term loan commitment from Goldman Sachs, Morgan Stanley and Jefferies & Co. to back the merger of the two companies. Valeant 7.625% and 8.375% senior unsecured notes will be refinanced as part of the transaction.
- WM Wrigley Jr. Company Baa2/BBB USD benchmark 1y (NYSEARCA:FRN)/2s/3s/4s 4-part 144A sr sec notes (will fall away provision). Citi/JPM (active)/Miz/Rabo/RBS (passive) joint books. Co-mgrs: Sumi, BAML, Medio, Scotia. CoC put at 101. UOP: repay bank debt. Pricing today.
What to watch Tomorrow:
• Existing home sales, May (National Association of Realtors) 10 a.m. ET
• FOMC meeting begins
• Treasury to auction $40 billion two-year notes
• Treasury to auction four-week bills
• Pactiv Corp. at Longbow research paper, packaging & chemicals investor conference 8:35 a.m. ET
• Gerber Scientific, Inc. Q4 earnings before market open, conference call 10 a.m. ET
• Hain Celestial Group, Inc. at Jefferies consumer conference 10:15 a.m. ET
• United Stationers Inc. at Jefferies consumer conference 10:15 a.m. ET
• Supervalu Inc. at Jefferies consumer conference 10:45 a.m. ET
• Freescale Semiconductor, Inc. analyst and investor meeting 11 a.m. ET
• Herbalife Ltd. at Jefferies consumer conference 11:15 a.m. ET
• Cracker Barrel Old Country Store, Inc. at Jefferies consumer conference 2:30 p.m. ET
• Toys ‘R’ Us Inc. Q1 earnings, conference call 3 p.m. ET
• Penn National Gaming, Inc. at Jefferies consumer conference 3:15 p.m. ET
• J. Crew Group, Inc. at Jefferies consumer conference 3:45 p.m. ET
• Jabil Circuit, Inc. Q3 earnings 4 p.m. ET, conference call 4:30 p.m. ET