US high-yield market prices US$5.625bn in new bonds

By Mariana Santibanez

NEW YORK, Sept 24 (IFR) - Seven issuers descended on the US high-yield market on Wednesday, raising a total of US$5.625bn in a busy session highlighted by an acquisition trade from Burger King.

The US$2.25bn 2022 second-lien bond, which will partially finance the US burger company's takeover of Canadian doughnut giant Tim Hortons (NYSE: THI - news) , was the biggest deal of the day.

The Caa1/B- rated issue priced at par to yield 6%, at the wide end of 5.75%-6.00% price talk and even wider to earlier whispers of 5.5%-5.75%.

"You have two camps of investors: those who thought the deal priced cheap and those that thought the Caa1 rated bond came too tight for 7.5-year paper," a participating investor said.

He said the deal offered a decent pick-up to the Heinz 2020, which was wrapped around par to yield 4.25%.

The new bond dipped to 99.875 in secondary, the investor said. While final order books were not disclosed, buyside accounts said the deal was heard to be twice subscribed just before books closed at noon.

Burger King also tightened terms on the jumbo US$7.25bn credit facility backing the deal, setting pricing at Libor plus 350bp with an OID of 99 and 1% Libor floor.

The facility includes a US$6.75bn seven-year term loan and a US$500m five-year revolver. Commitment confirmations were due on Wednesday afternoon.

Other issuers today included Canadian paper company Tembec Industries, which priced a US$375m five-year non-call two senior secured note.

In its first visit to the bond market in three years, B3/B- rated Tembec (Toronto: TMB.TO - news) went out with 8.50%-8.75% price talk before pricing at a wider 9%.

It also changed the structure of the deal to remove the 10% special call option at 103.

Fly Leasing priced a two-tranche US$400m deal split between an upsized US$325m 2021 and a reopening of an existing 6.75% 2020 bond for US$75m.

The 2020 was reopened at 104.75, offering investors about a 1 point discount to the 105.75 level seen on the bond pre-announcement.

Demand was greater on the new 2021 tranche, allowing for an upsize by US$25m. It printed at par to yield 6.375%, in line with price talk.

At that level it was thought to offer a 60bp new issue concession versus the 2020, according to a banker familiar with the trade.

Netherlands-based aircraft leasing company AerCap weighed in with the second-largest deal of the day, a US$800m seven-year non-call life through subsidiaries AerCap Ireland and AerCap Global Aviation.

The Double B rated issuer initially planned five-year and seven-year bullet tranches in order to blend its cost of capital, but demand was heavy enough for the longer tenor to allocate it the entire amount.

AerCap also considered the 4.375% talk on the five-year as relatively expensive and opted to pay a bit extra to lock in a longer maturity, a source close to the deal said.

Demand topped US$1.6bn, with participating investors getting a 25bp to 37.5bp new issue concession versus the 4.5% 2021s which were trading to yield 4.63%.

The new 2021s priced at par to yield at 5.00%, in line with 5.00% area price talk.

DEALS PRICED:

BURGER KING

Burger King (Tim Hortons), announced US$2.25bn 7.5-year nc3 senior notes via WFS(left)/JPM/BAML. Co-managers BARC/MS/SCOTIA/TD CS/FITB/HSBC/RABO. 144a for life. UOP: to finance a portion of the cash consideration for the combination of Tim Hortons and Burger King Worldwide (NYSE: BKW - news) (ii) to partially fund the repayment of any and all of Tim Hortons and Burger King Worldwide's existing indebtedness, (iii) to pay related fees, costs, expenses and other related payments associated with the combination and related transactions and (iv) for other general corporate purposes. BIZ: Burger King Worldwide is the world's second largest fast food hamburger restaurant chain as measured by total number of restaurants. Tim Hortons is one of the largest restaurant chains in North America and the largest in Canada by a wide measure, commanding approximately 42% of Canadian QSR traffic in 2013.

WHISPERS: 5.5%-5.75%

PRICE TALK: 5.75-6.00%.

PRICED: US$2.25bn. Cpn 6.00%. Due 4/1/22 NC3. Ip par. Yld 6.00%. +369bp vs. 2% 2/15/22 UST. First (Other OTC: FSTC - news) pay 4/1/15. Equity clawback up to 40% at USD106.0 prior to 10/1/17. Call schedule: 10/1/17 at USD103.00, 10/1/18 at USD101.50, 10/1/19 and thereafter at par. MWC applies. USD101 COC put. Settlement date 10/8/14. Cusip # 68245XAA7.

TEMBEC INDUSTRIES

Tembec Industries Inc., B3/B-, announced US$375m 5-year NC2 senior secured notes via DB(left)/RBC. Co-manager is CIBC/Imperial. Call Protection: NC-2, par plus 50%, Special Call: 10% at 103 during the non-call period, Equity Claw: 35% during the non-call period. USD101 COC put. UOP: Repay existing debt, including the 11.25% secured notes. BIZ: a paper company in Canada.

PRICE TALK: 8.50 - 8.75%. Structure Change: Removal of the 10% at 103 special call.

LAUNCH: US$375m at 9.00%.

PRICED: US$375m. Cpn 9.00%. Due 12/15/19. Ip par. Yld 9.00%. +712bp vs. 1.125% 12/31/19 UST. USD101 COC put. Equity clawback up to 35% prior to 10/15/16 at USD109. Call schedule: 2016 at 104.500, 2017 at 102.250, 2018 at 100.000. First pay 12/15/14. Settlement date 10/1/14. Cusip # 87971KAK3.

FLY LEASING

Fly Leasing Limited (NYSE: FLY - news) announced a US$400m SEC-Reg (Madrid: SL001.MC - news) 2-tranche senior unsecured note offering via JEFF(left)/CITI/DB/RBC. Co-managers are BNP (Paris: FR0000131104 - news) /NOMURA/COWEN. Structure will consist of a US$300m senior notes due 2021, and a US$100m add-on to its 6.75% due 2020. UOP: Used for general corporate purposes, including the acquisition of aircraft. BIZ: FLY acquires and leases modern, high-demand and fuel-efficient commercial jet aircraft under multi-year operating lease contracts to a diverse group of airlines throughout the world. FLY is managed and serviced by BBAM LP, one of the world's leading aircraft lease managers with more than 20 years of experience.

PRICE TALK: Add-on at US$104.75-105.00, 7-year 6.375% area.

PRICED: US$400m 2-tranche deal. MWC T+50bp. Settlement date 10/3/14.

- US$75m (downsized from US$100m). Cpn 6.75%. Due 12/15/20. Ip USD104.75. YTM 5.824%. Equity clawback up to 35% at USD106.75 prior to 12/15/16. First pay 12/15/14. Call schedule: December 15, 2016 at 105.063, December 15, 2017 at 103.37, December 15, 2018 at 101.688, December 15, 2019 at 100.000. Cusip # 34407DAA7.

- US$325m (upsized from US$300m). Cpn 6.375%. Due 10/15/21. Ip par. YTM 6.375%. Equity clawback up to 35% at USD106.375 prior to 10/15/17. First pay 4/15/15. Call schedule: October 15, 2017 at 104.781, October 15, 2018 at 103.188, October 15, 2019 at 101.594, October 15, 2020 at 100.000. Cusip # 34407DAB5.

TENET HEALTHCARE (NYSE: THC - news)

Tenet Healthcare announced a US$500m senior note offering via BAML. UOP: for general corporate purposes, including the repayment of indebtedness and drawings under Tenet`s senior secured revolving credit facility, related transaction fees and expenses, and acquisitions. BIZ: Tenet Healthcare Corporation is a national, diversified healthcare services company.

PRICE TALK: 5.50% area.

PRICED: US$500m. Cpn 5.50%. Due 3/1/19. Ip par. Yld 5.50%. +382bp vs. 1.50% 2/28/19 UST. MWC T+50bp. USD101 COC put. First pay 3/1/15. Settlement date 9/29/14. Cusip # 88033GCH1.

AERCAP IRELAND CAP LTD

AerCap Ltd/Aercap Global Aviation Trust, expected ratings Ba2/BB+/BB+, announced a US$800m 2-tranche senior notes via JPM(left)/RBC/MS. Co-managers are BAML/RBS (LSE: RBS.L - news) . Structure will consist of a 5-year NCL and a 7-year NCL. 144a/RegS w/reg rights. UOP: Acquire, invest in, finance or refinance aircraft assets, and GCP. BIZ: Aircraft leasing company, headquartered in the Netherlands.

PRICE TALK: 7-year 5.00% area.

LAUNCH: US$800m 7-year NCL at 5.00%, 5-year NCL has been dropped.

PRICED: US$800m. Cpn 5.00%. Due 10/1/21. Ip par. Yld 5.00%. +275bp vs. 2.00% 8/31/21 UST. MWC T+50bp. US101 COC put. First pay 4/1/15. Settlement date 9/29/14. Cusip # 00772BAK7.

ABENGOA GREENFIELD

Abengoa Greenfield S.A., expected ratings B2/B/B+, announced a E500m (USD/E equivalent) 2-tranche 5-year NCL via HSBC(global coordinator). On the Euro tranche joint-books are HSBC/BAML/CACIB. On the US$ tranche HSBC/BAML/CACIB. Structure will consist of a Euro 5-year and a USD 5-year. 144a/RegS. UOP: Financing of Eligible Green Projects that meet certain environmental and social criteria.

PRICE TALK: USD 5.25 - 5.50%. Euro 6.00 - 6.25%.

PRICED: 500m equivalent (E/$). First pay 4/1/15. Settlement date 9/30/14.

- E265m. Cpn 5.50%. Due 10/1/19. Ip par. Yld 5.50%. +529bp vs. OBL 0.25% 10/11/19. ISIN # XS1113024563

- USD300m. Cpn 6.50%. Due 10/1/19. Ip par. Yld 6.50%. +469bp vs. 1.00% 9/30/19 UST. ISIN # US00289WAA99.

ALLY FINANCIAL (NYSE: ALLY - news)

Ally Financial Inc., B1/BB/BB+ (p/s/s), announced a US$ benchmark 2-tranche SEC-Reg senior unsecured deal via CITI/DB/GS (KSE: 078935.KS - news) /MS. Structure will consist of a 3-year (9/29/17) and a 10-year (9/20/24). UOP: To fund tender offer up to an aggregate of US$700 million principal amount of our 8.00% Senior Guaranteed Notes due 2020, our 7.50% Senior Guaranteed Notes due 2020 and our 8.00% Senior Notes due 2031, with any remaining proceeds for general corporate purposes. ESettlement date 9/29/14.

- IPTs: 3-year: 3.50% area , 10-year 5.375 - 5.50%.

PRICE TALK: 3-year 3.375% - 3.500%, 10-year 5.375% - 5.50%.

PRICED: US$1bn 2-tranche deal.

- US$300m. Cpn 3.250%. Due 9/29/17. Ip USD99.646. Yld 3.375%.

- US$700m. Cpn 5.125%. Due 9/29/24. Ip USD98.085. Yld 5.375%.

DEALS PIPELINE:

GENERAL CABLE (NYSE: BGC - news)

General Cable Corporation, expected ratings B3/B, announced a US$250m 5-year NCL senior notes via JPM(left)/BAML/CA/DB/HSBC. Co-managers are BBVA/SC. 144A/RegS w/reg rights. UOP: Redeem FRNs due 2015, fund restructuring program, repay ABL. BIZ: Manufacture and distribute copper, aluminum, and fiber optic wire and cable products for the energy, industrial, construction and communications markets.

CGI GROUP INC (Xetra: CJ5A.DE - news)

CGI Group Inc. announced a US$855m (equivalent US$/Euro) 4-tranche senior unsecured note offering. Structure will include a US$745 million and EUR85 million debt private placement. The private placement is comprised of four tranches of senior unsecured notes, with a weighted average maturity of 8 years and a weighted average fixed coupon of 3.62%.UOP: to pay the Company's credit facility and its existing term loan tranche maturing in May 2015. BIZ: Founded in 1976, CGI Group Inc. is the fifth largest independent information technology and business process services firm in the world.

KIMBERLY-CLARK CORPORATION

Kimberly-Clark Corporation (NYSE: KMB) announced that Halyard Health, Inc., its wholly owned subsidiary, is beginning the process of raising external financing in preparation for the spin-off of Halyard Health at the end of October 2014. The external financing is expected to consist of a senior secured term loan B of approximately US$390m and approximately US$250m of senior unsecured notes. As part of the external financing, Halyard Health also expects to enter into a US$250m senior secured revolving credit facility with various commercial and investment banks, which is expected to remain undrawn at the time of the spin-off. BIZ: Kimberly-Clark Corp. (NYSE: KMB) and its well-known global brands are an indispensable part of life for people in more than 175 countries. Further details to follow. (Reporting by Mariana Santibanez; Editing by Natalie Harrison)