Syncreon Plans Debt as Sellers Shun Paperwork: New Issue Alert

Syncreon Holdings Plc, the Auburn Hills, Michigan-based logistics company, is marketing $300 million of eight-year notes as junk-bond issuers choose to pay higher yields to restrict their debt to sophisticated investors and avoid documentation.

Proceeds from the senior unsecured debt planned as a so-called 144A-for-life issue will be used to repay existing borrowings and for general corporate purposes, according to a person familiar with the transaction.

Of the high-yield, high-risk debt announced since the beginning of March, 22 percent has been 144A-for-life issuance, compared with 13.7 percent in the company’s high-yield index as of Feb. 26, according to an April 23 report written by Barclays Capital analysts led by Bradley Rogoff in New York.

“It’s a more straightforward way of coming to market without having complete disclosure,” said Lon Erickson, a managing director at Santa Fe, New Mexico-based Thornburg Investment Management. “There has been a lot of issuance owed by private-equity funds and foreign issuers. 144A exists to allow those kinds of companies to come without the extreme burden of expense and time.”

Rule 144A is a U.S. Securities and Exchange Commission regulation issued in 1990 that modified a two-year holding period requirement on privately placed securities by permitting large institutions to trade them among themselves.

With a standard Rule 144A sale, borrowers can rush an issue to market and complete the registration documentation afterwards, according to Erickson. Under 144A for life, they never have to register the bonds, he said.

Higher Yield

High-yield, high-risk 144A-for-life debt has roughly the same duration and issue size as registered bonds, but it typically yields 1.2 percentage points more, the Barclays report said.

“In theory, these issuances are going to be smaller on average and a little less liquid, with not as many participants,” said Erickson, who helps manage $4 billion at Thornburg. “There may not be as much information about the issuer to dig in there because they are not held to the same reporting requirements. These two reasons would help create a premium.”

The extra interest investors demand to own all high-yield, high-risk corporate bonds instead of Treasuries fell 2 basis points to 542 basis points yesterday, according to the Bank of America Merrill Lynch U.S. High-Yield Master II Index.

A basis point is 0.01 percentage point. Junk bonds are rated below Baa3 by Moody’s Investors Service and BBB- by Standard and Poor’s.

Yanlord Land

Yanlord Land Group Ltd. (YLLG), the Singapore-based developer of high-end residential real estate in China, sold $300 million of seven-year notes in high-yield issuance, according to data compiled by Bloomberg. The debt was rated BB by S&P and was given a preliminary Ba2 grading by Moody’s, Bloomberg data show. It yields 9.5 percent, a 624 basis-point spread to U.S. Treasuries.

The Syncreon notes may be sold as soon as today, according to a person familiar with the transaction. The debt, non-callable for four years, may yield about 9.5 percent and will be sold by the company’s Syncreon Global Finance and Syncreon Global (Ireland) units, said the person, who declined to be identified because terms aren’t set.

JPMorgan Chase & Co. and Goldman Sachs Group Inc. are underwriting the offering, the person said. The company’s debt is rated B3 by Moody’s and B by S&P.

BB&T Corp., the North Carolina lender that remained profitable through the financial crisis, sold $500 million of six-year notes, and U.S. Bank, a unit of U.S. Bancorp (USB), issued $500 million of 10-year debt to lead investment-grade sales yesterday, Bloomberg data show.

The spread on investment-grade U.S. corporate debt rose 1 basis point to 152 basis points, according to the Bank of America Merrill Lynch U.S Corporate Master Index.

Following is a description of at least $9.5 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

JAPAN FINANCE CORP.’s sale of bonds in dollars due July 2012 may be priced to yield 17 basis points to 19 basis points more than the benchmark mid-swap rate, according to bankers involved in the transaction.

NBC UNIVERSAL INC., the media company in which Comcast Corp. plans to acquire a majority stake from General Electric Co., may sell 5-, 10- and 30-year notes in a benchmark offering, according to a person familiar with the transaction. Proceeds will be used to repay existing debt and to finance a portion of a cash distribution to GE, said the person, who declined to be identified because terms aren’t set. Benchmark offerings are typically at least $500 million.

CHILE plans to sell $1 billion of dollar-denominated 10-year bonds, along with its debut sale of peso securities, Finance Minister Felipe Larrain said. The country will “certainly” issue the debt this year, Larrain said.

BELGIUM plans to add $500 million to its 2.75 percent 2015 bonds, according to a banker involved in the transaction. Deutsche Bank AG and Goldman Sachs Group Inc. are managing the sale, the banker said.

DOHA BANK QSC, Qatar’s third-largest bank, plans to sell senior notes in dollars, the lender said in a statement on the Qatari bourse, without disclosing the size of the offering.

FORETHOUGHT FINANCIAL GROUP INC. plans to sell $150 million of 10-year bonds, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. Standard & Poor’s assigned the notes a grade of BBB-in a March 24 report.

TRANSNET LTD., the South African state-owned transportation company, plans to sell U.S. dollar-denominated debt in a benchmark offering, according to a person familiar with the transaction. Transnet said in February that it planned to sell $2 billion of international debt to help fund infrastructure. Barclays Capital and Goldman Sachs Group Inc. are joint bookrunners for the offering, said the person, who declined to be identified because terms aren’t set.

Not Rated

The PROVINCE OF CORDOBA, Argentina, plans to sell as much as $350 million of bonds in international markets once the federal government completes a restructuring of defaulted debt, Banco de Cordoba said.

SENSIENT TECHNOLOGIES CORP. said it entered into an agreement with a group of four financial institutions for the issuance of $110 million in fixed-rate, senior notes, according to a Nov. 19 statement distributed by Business Wire. The company will issue seven-year debt in May with a fixed coupon rate of 4.91 percent and proceeds will be used to repay existing indebtedness, Sensient said in a March 1 regulatory filing.

Split Rated

KAZMUNAYGAZ NATIONAL CO., the energy producer in Kazakhstan, plans a benchmark offering of 5- and 10-year notes through its finance subsidiary, according to a person familiar with the transaction, who declined to be identified because terms aren’t set. Citigroup Inc., Credit Suisse Group AG, and Royal Bank of Scotland Group Plc are managing the offering, the person said. The debt may be rated Baa2 by Moody’s Investors Service and BB+ by Standard & Poor’s, the person said.

High Yield

HILLMAN COS. plans to sell $150 million of senior unsecured notes in connection with Oak Hill Capital Partners’ acquisition of the company, according to a company statement. Oak Hill is acquiring the company from Code Hennessy & Simmons LLC, Ontario Teachers’ Pension Plan and members of company management, Hillman said.

LANTHEUS MEDICAL IMAGING INC. plans to sell $225 million of 7-year senior notes, according to a person familiar with the offering. Proceeds will be used to refinance the company’s credit facilities and to repurchase a portion of its outstanding preferred stock, said the person, who declined to be identified because terms aren’t set.

LENNAR CORP. (LEN), the third-biggest U.S. homebuilder, plans to sell $250 million of 8-year senior notes, according to a company statement. About $200 million of the proceeds will be used to make tender offers for outstanding debt, with the rest for general corporate purposes, the Miami-based company said in a statement distributed by PR Newswire. Lennar also is offering $250 million of convertible senior notes due in 2020, all of which will be used to for general purposes, the company said.

MARFRIG ALIMENTOS SA, the world’s fourth-largest meatpacker, plans to sell 10-year dollar bonds as soon as this week, a person familiar with the transaction said. The Sao Paulo-based company hired Credit Suisse Group AG, Banco Santander SA, Itau Unibanco Holding SA, Banco Bradesco SA and Banco do Brasil SA to arrange the sale, said the person, who declined to be identified because the terms aren’t set. The size of the offering wasn’t disclosed.

PATRIOT COAL CORP., the St. Louis-based coal producer, plans to sell $250 million of senior notes due in 2018, the company said in a statement. Proceeds will be used for working capital and general corporate purposes, the company said. Citigroup Inc., Bank of America Corp. and Barclays Plc are managing the sale, the company said.

LEVI STRAUSS & CO. plans to sell $460 million of 10-year notes, the company said in a statement. Proceeds of the sale of senior unsecured notes will be used to repay debt, Levi Strauss said. The notes may be sold as soon as April 29, according to a person familiar with the transaction who declined to be identified because terms aren’t set.

REYNOLDS GROUP HOLDINGS LTD., the maker of Reynolds Wrap plastic wrap, said it plans to acquire the Evergreen Packaging group of companies and a New Zealand paper mill from Carter Holt Harvey Ltd. Reynolds Group plans to borrow $1.75 billion to pay for the acquisition of Evergreen and the Whakatane Mill, it said in a statement distributed by Business Wire. The Auckland, New Zealand-based company plans to sell $1 billion of bonds and will seek $750 million of bank loans, said a person familiar with the offering who declined to be identified because terms aren’t set. Moody’s rates the debt B2 and S&P ranks it B+.

AMERICAN RENAL HOLDINGS INC. may sell $225 million of eight-year notes that may yield 8.5 percent to 8.75 percent, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

COOPER-STANDARD AUTOMOTIVE INC. may sell $450 million of eight-year notes, according to a person familiar with the offering. Deutsche Bank AG, Bank of America Corp., Barclays Plc, and UBS AG are managing the sale, said the person, who declined to be identified because terms aren’t set.

DSW HOLDINGS INC., a unit of DS Waters Enterprises LP, plans to sell $475 million of seven-year senior secured notes, according to a person familiar with the transaction. Proceeds will be used to help repay outstanding debt, said the person, who declined to be identified because terms aren’t set. Morgan Stanley, JPMorgan Chase & Co. and Barclays Plc are managing the sale, the person said.

AMERICOLD REALTY TRUST (ACRE), the operator of temperature-controlled warehouses owned by billionaire Ron Burkle’s Yucaipa Cos., plans to sell $300 million of 10-year notes, according to a person familiar with the transaction. Proceeds from the sale of senior secured debt will be used to purchase assets from Versacold International Corp., said the person, who declined to be identified because terms aren’t set. Yucaipa owns 49 percent of Versacold with an option to purchase the rest, according to an April 15 filing with the Securities and Exchange Commission. Moody’s ranks the debt Ba3.

RENAISSANCE CAPITAL, the commercial banking arm of Renaissance Group, is selling $225 million of three-year bonds with a 13 percent coupon, according to a banker with knowledge of the transaction. Moody’s assigned Renaissance an issuer rating of B2 and S&P affirmed its B ranking on the company.

PENSON WORLDWIDE INC. plans to sell $200 million of senior secured second-lien debt, the company said in a statement distributed by Business Wire. The notes due in due in 2017 may be sold as soon as April 28, according to a person familiar with the transaction. The provider of services to securities brokers will use proceeds to repay about $100 million of existing debt and to bolster capital of regulated subsidiaries, the company said.

BANCO FIBRA SA plans to sell $150 million of three-year, dollar-denominated notes, according to a person familiar with the offering. The Sao Paulo-based bank hired Banco Espirito Santo SA, BNP Paribas and HSBC Holdings Plc to arrange the sale of senior unsecured notes, said the person, who declined to be identified because terms aren’t set.

SYNCREON GLOBAL, a subsidiary of Auburn Hills, Michigan-based Syncreon Holdings Plc, plans to sell $300 million of eight-year senior notes, according to a person familiar with the transaction. The debt may yield about 9.5 percent, said the person, who declined to be identified because terms aren’t set.

(Updated April 27. See {www.syncreon.com})

BANCO INDUSTRIAL E COMERCIAL SA (BICB3), the Sao Paulo-based lender known as BicBanco, may pay a yield of about 8.75 percent on its offering of 10-year dollar bonds, according to a person familiar with the offering. HSBC Holdings Plc, JPMorgan Chase & Co. and Standard Chartered Plc are underwriting the sale of unsecured subordinated notes, said the person, who declined to be identified because terms aren’t set.

EXPORT-IMPORT BANK OF UKRAINE plans to sell $500 million of five-year bonds that may be priced to yield about 8.5 percent, according to people with knowledge of the sale. Citigroup Inc. and Credit Suisse Group AG are managing the sale of the notes, which will be issued through Biz Finance Plc.

ESSAR STEEL HOLDINGS LTD. plans to raise at least $750 million through a sale of bonds denominated in U.S. dollars, according to a person familiar with the matter. Essar said in an e-mailed statement that it plans to issue senior unsecured notes due 2017. The company said it intends to use proceeds to refinance existing debt and for potential acquisitions.

LEARNING CARE GROUP NO. 2 INC. is planning to sell $265 million of payment-in-kind notes that can pay interest in the form of added debt, according to a person familiar with the transaction. The company plans to issue five-year senior secured notes, of which 10.5 percent can be paid in cash and 2.5 percent in additional debt, said the person, who declined to be identified because terms aren’t set.

COMMUNITY EDUCATION CENTERS INC. plans to sell $210 million of six-year, senior secured notes that may yield 12.75 percent to 13 percent, according to a person familiar with the offering. The notes, which can’t be called for the first 3.5 years, will be sold in a private placement, said the person familiar with the transaction. The company initially planned to sell the debt in a so-called 144A offering, will borrow the money through a private offering. Proceeds from the sale may be used to repay debt, the person said. Jefferies & Co. is underwriting the sale, the person said.

PT CILIANDRA PERKASA, an Indonesian palm-oil company, may sell dollar bonds, a person familiar with the matter said. Ciliandra is a unit of Singapore-based First Resources Ltd.

AO ASTANA FINANCE will offer senior creditors $350 million of new bonds, as well as recovery notes and 58.9 percent of voting shares, the lender said in a statement published through the Kazakhstan Stock Exchange. Holders of Astana Finance’s domestic notes will be offered 20-year tenge-denominated bonds with an 8 percent coupon, the lender said in the statement, which was dated Oct. 16.

The DOMINICAN REPUBLIC may sell as much as $600 million of bonds, said Roberto Cabanas, head of general financing at the Public Credit Office. The country, which hired Barclays Plc and Citigroup Inc. to arrange the offering, will begin meeting with bond investors April 23, said the person, who declined to be identified because terms aren’t set.

Offerings in Pipeline

BANK FOR INVESTMENT & DEVELOPMENT OF VIETNAM received approval from the central bank to issue 7 trillion dong ($369 million) of notes and another 3 trillion dong ($158 million) worth of dollar-denominated notes in 2010, according to a statement on State Bank of Vietnam’s Web site.

PAN AMERICAN ENERGY LLC, the Argentine unit of London-based BP Plc, hired Credit Agricole CIB, HSBC Holdings Plc and JPMorgan Chase & Co. for its planned sale of 2021 dollar bonds.

METINVEST HOLDING LLC, Ukraine’s largest steelmaker, plans to sell dollar-denominated bonds in its first offering of international debt, according to a person with knowledge of the transaction. The Donetsk-based company controlled by Ukrainian billionaire Rinat Akhmetov appointed BNP Paribas SA, Credit Suisse Group AG, ING Groep NV, Royal Bank of Scotland Group Plc and VTB Capital to organize meetings with potential investors, the banker said.

BOLIVIA plans its first international bond sale in more than 70 years as early as the end of 2011, Finance Minister Luis Arce said. He didn’t disclose the size of the offering.

BRASKEM SA (BRKM5), Latin America’s biggest petrochemical producer, plans to sell 10-year dollar-denominated bonds, according to a person familiar with the transaction. Banco do Brasil SA, Banco Bradesco SA, HSBC Holdings Plc and Banco Santander SA are arranging the offering, said the person, who declined to be identified because terms aren’t set.

GLORIOUS PROPERTY HOLDINGS LTD. (845) postponed its first sale of dollar-denominated bonds, citing unfavorable market conditions. The postponement was disclosed in an e-mailed statement by Callis Lau, an external spokeswoman for the Hong Kong-based bank. Glorious Property had planned to sell five-year bonds denominated in U.S. dollars, according to a person familiar with the matter who declined to be identified before a public announcement. Glorious said in a filing that it had hired Deutsche Bank AG, JPMorgan Chase & Co. and Standard Chartered Bank to manage the offering.

FIRSTRAND LTD. (FSR), South Africa’s second-largest banking group, said it postponed a planned sale of dollar bonds because a case filed against Goldman Sachs Group Inc. by the Securities & Exchange Commission in the U.S. and a volcanic ash cloud that disrupted global air travel made market conditions too volatile. The sale may now take place later this year, Andries du Toit, group treasurer at FirstRand in Johannesburg, said in an interview.

AXIATA GROUP BHD. (AXIATA), Southeast Asia’s second-largest mobile-phone operator, plans to raise $300 million to strengthen its capital through the first dollar bond sale by a Malaysian company in 2010. Goldman Sachs Group Inc. and Morgan Stanley will help the Kuala Lumpur-based company issue 10-year, fixed-rate notes, Axiata said in a stock exchange filing.

KOREA FINANCE CORP. plans to sell $100 million to $200 million of foreign-currency bonds next month in its first overseas debt sale since October, Edaily reported, without citing anyone. The state-run agency also plans to sell $1 billion of global bonds in the U.S. in the second half of the year, the Korean-language online newspaper said.

NATIONAL AGRICULTURAL COOPERATIVE FEDERATION of South Korea, also known as Nonghyup, plans to raise as much as $500 million from foreign-currency bonds to repay debt, according to a person with direct knowledge of the matter. The federation, which provides credit and banking services to farmers, plans to sell notes to help refinance about $600 million of bonds and loans, said the person, who asked not to be named as the plan is private. The bonds will probably be denominated in dollars, they said.

YANLORD LAND GROUP LTD., a Singapore-based developer of residential projects in China, plans to sell as much as $300 million of seven-year bonds, according to a banker involved in the transaction. The notes, callable after four years, may be priced to yield 9.5 percent. HSBC Holdings Plc and Royal Bank of Scotland Group Plc are managing the sale, with Standard Chartered Plc as a so-called passive manager.

PTT PRODUCTION & EXPLORATION PCL (PTTEP), the Thai oil explorer, hired Credit Suisse Group AG and Royal Bank of Scotland Group Plc to help it sell global bonds, according to two people familiar with the matter who asked not to be identified as the plan is private.

UNION BANK OF INDIA LTD. (UNBK) plans to sell bonds denominated in U.S. dollars, according to a person familiar with the matter. Barclays Plc, Citigroup Inc., Deutsche Bank AG and Standard Chartered Plc will manage the sale, the person said.

MALAYSIA will “most probably” sell global Islamic bonds denominated in dollars, Prime Minister Najib Razak said.

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP. of the Philippines sell between $750 million and $1.5 billion of dollar-denominated bonds “anytime” to help refinance maturing debt thru next year, Vice Chairman Jose Ibazeta said. The company manages the finances of state utility National Power Corp.

BRISBANE AIRPORT CORP., owner of Australia’s third-busiest airport, may sell bonds in the U.S. later this year as it pursues new markets to help refinance debt and pay for a new runway. The company is considering a 10- or 15-year U.S. private placement and a five- to seven-year Australian dollar bond sale in late 2010 or early 2011, Chief Financial Officer Tim Rothwell said in a phone interview from Brisbane.

VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP, the state-owned coal producer known as Vinacomin, plans to sell as much as $500 million of bonds overseas this year to fund mining and energy projects, according to Deputy Chief Executive Officer Nguyen Van Hai.

The PHILIPPINES may sell another $500 million of bonds aimed at overseas Filipinos in the second half of 2010, according to one of the arrangers for the transaction.

UNO RESTAURANT HOLDINGS CORP., the operator and franchisor of 170 pizzerias, filed a Chapter 11 reorganization plan that calls for a $27 million offering of notes. The Boston-based company’s rights offering of second-lien notes would enable it to repay an outstanding loan and exit Chapter 11, it said in court papers filed in U.S. Bankruptcy Court in Manhattan. Secured debt holders Twin Haven Capital Partners LLC and Coliseum Capital Management LLC have agreed to backstop the notes offering.

FINLAND may sell five-year bonds denominated in dollars this year, the Finnish Treasury said in a document posted on its Web site.

POLAND may sell around $1 billion of five-year dollar bonds in May “at the earliest” and yen-denominated debt by the end of the year, Deputy Finance Minister Dominik Radziwill said. The country is rated A2 at Moody’s and A- at S&P and Fitch Ratings.

SONGA OFFSHORE SE (SONG) postponed its plans to issue $200 million of debt, but may return to the market in March with a larger offer, according to a person familiar with the transaction. In January, Songa hired Citigroup Inc. to issue seven-year bonds to repay existing debt and for general corporate purposes, it said in a statement.

HUDSON PRODUCTS HOLDINGS INC. postponed its $250 million sale of six-year notes due to market conditions, according to a person familiar with the transaction. Hudson began marketing the six-year senior secured second-lien notes on Jan. 26, according to a person familiar with the offering. It has not specified when it plans to return to the debt market to sell high-yield notes.

MONGOLIA plans to sell as much as $1.2 billion of bonds overseas this year to fund infrastructure to support its mining industry, Finance Minister Sangajav Bayartsogt said. This is Mongolia’s first benchmark offering of dollar-denominated debt. Investment banks are advising Mongolia to issue debt with maturities of between five and 10 years, Bayartsogt said in an interview. The securities may offer a yield of between 8 percent and 11 percent, he said.

KOREA HYDRO & NUCLEAR POWER CO., a unit of state-run Korea Electric Power Corp., delayed a planned foreign-currency bond sale until after the first quarter, according to two people with direct knowledge of the matter.

BIRCH COMMUNICATIONS INC. is offering $100 million of senior secured notes due in 2015, with proceeds going toward refinancing debt, buying outstanding warrants for its common stock and general corporate purposes, including acquisitions, the Atlanta-based company said Nov. 30 in a statement. On Feb. 1, Moody’s withdrew its B3 rating assigned to the company’s notes, citing “recent indications” that Birch “will complete its note issuance under terms that are different than those that supported the rating assignment,” analysts Gerald Grnovsky and Russell Solomon wrote in a note. Birch is rated B- by S&P, the ratings company wrote Dec. 4 in a statement. “We’re currently holding discussions with interested parties and expect to finalize our offering in the near term,” Greg Corwin, director of marketing for Birch, said in a Jan. 11 telephone interview. Corwin said the status of the deal was “unchanged” in a Feb. 17 interview.

(Updated Feb. 17.)

VIETNAM SHIPBUILDING INDUSTRY GROUP, the state-owned company known as Vinashin, won government approval to sell as much as $600 million of bonds overseas to fund construction of ships. Vinashin plans to raise between $400 million and $600 million in a dollar-denominated bond sale “with a government guarantee,” Chief Business Officer Nguyen Quoc Anh said in a phone interview from the northern port province of Quang Ninh.

ANGOLA may begin the sale of international bonds by the end of June, Reuters reported, citing people it didn’t identify. The African country “is on course to get” its first credit rating from an international agency as it prepares to sell bonds abroad, Aguinaldo Jaime, director of state-run National Investment Agency, said Feb. 12. Angola previously sought to sell $4 billion of debt in an offering first announced in August. The deal was later postponed.

ALROSA, Russia’s diamond monopoly, may sell as much as $1 billion in foreign-currency bonds in the second half of 2010, RIA Novosti reported, citing Chief Executive Officer Fyodor Andreyev. The company is rated Ba3 by Moody’s.

To contact the reporter on this story: Tian Huang in New York at thuang57@bloomberg.net.

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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