Transunion Offers Debt Amid Signs Junk Window is Opening: New Issue Alert

Transunion Corp., the provider of credit information to banks and consumers, is offering notes as stabilizing Treasury and equity markets may allow high-yield, high-risk issuers to sell debt after being shunned this month.

Transunion plans to sell $645 million of notes due in 2018, according to Moody’s Investors Service and Standard & Poor’s. Proceeds from the sale, along with a $250 million revolving credit facility and a $940 million term loan, will be used to pay for Madison Dearborn Partners LLC’s acquisition of a 51 percent stake in the company, S&P said.

Speculative-grade companies may be able to come to market after three straight days without issuance, said Christopher Garman, president of Orinda, California-based Garman Research LLC. May is poised to be the slowest month for junk-bond sales since March 2009 after a record pace earlier this year.

“The window has the potential for opening and closing quickly as long as volatility is high,” Garman said yesterday in a telephone interview. “With the pretty sharp Treasury rally and stabilization in the equity market the last couple days, that opens up the window for issuers, especially those already known by the marketplace, to come and get deals done.”

High-yield, high-risk debt is rated below Baa3 by Moody’s Investors Service and BBB- by S&P. A basis point is 0.01 percentage point.

The yield on the 10-year Treasury note, the market bellwether, rose to as high as 3.26 percent yesterday after falling to a 13-month low of 3.06 percent on May 25 amid investor concerns over the debt crisis in Europe. The S&P 500 lost 0.6 percent yesterday after rising as much as 1.6 percent.

Goldman Sells

Goldman Sachs Group Inc. sold $1.25 billion of 10-year notes and Discovery Communications issued $3 billion of debt in a three-part offering to lead $6 billion of investment-grade volume yesterday, according to data compiled by Bloomberg. That was the most daily issuance since April 21, Bloomberg data show.

The pickup in investment-grade offerings may be a sign that the high-yield sector will follow, Garman said.

“In an environment of ongoing negative real rates in cash and a gradual pickup of economic activity, the demand for high- yield is going to return after this spike of risk aversion,” he said.

Spreads Narrow

The extra yield investors demand to own high-yield, high- risk debt instead of Treasuries fell 17 basis points to 707, after rising a day earlier to the highest since Dec. 9, according to the Bank of America Merrill Lynch High Yield Master II Index.

There have been no major high-yield bond sales this week, according to data compiled by Bloomberg. High-yield sales this month of $6.3 billion are the least since March 2009, when companies issued $2.3 billion of the debt, Bloomberg data show.

Spreads on investment-grade debt narrowed 2 basis points to 204 basis points, according to the Bank of America Merrill Lynch U.S. Corporate Master Index.

Following is a description of $7.46 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

ASIAN DEVELOPMENT BANK plans to sell three-year bonds in dollars, according to a person involved in the transaction. The notes may be priced at about the mid-swap rate, said the person, who declined to be identified because the terms aren’t set. Daiwa Securities Group Inc., Goldman Sachs Group Inc., Morgan Stanley and UBS AG are managing the sale, the person said.

CHILE plans to sell $1 billion of 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.

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. S&P assigned the notes a grade of BBB- in a March 24 report.

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 plans to 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.

High Yield

TRIUMPH GROUP INC., the maker of aircraft components, said it plans to offer $350 million of eight-year notes. Proceeds will be used to help finance the Wayne, Pennsylvania-based company’s acquisition of Vought Aircraft Industries Inc., Triumph said in a May 26 statement distributed by Business Wire.

TRANSUNION CORP., the provider of credit information to banks and consumers, plans to sell $645 million of notes due in 2018, according to Moody’s and S&P. Moody’s graded the senior unsecured notes B3, six steps below investment quality, and S&P ranked them an equivalent B-, the debt raters said separate reports. Proceeds from the sale, along with a $250 million revolving credit facility and a $940 million term loan, will be used to pay for Madison Dearborn Partners LLC’s acquisition of a 51 percent stake in the company from the Pritzker family, S&P said.

SPECTRUM BRANDS INC., the maker of batteries, pet food, and lawn care products, plans to sell $500 million of notes, Moody’s and S&P said in research reports. Spectrum is acquiring small- appliances manufacturer Russell Hobbs Inc. and is offering the notes and seeking a $1 billion term loan to refinance debt, according to a person familiar with the talks. Moody’s said on May 20 that it rated the proposed term loan and notes B2, while S&P said May 24 that it assigned both equivalent debt ratings of B, five levels below investment grade.

AKBANK TAS, the Turkish bank part-owned by Citigroup Inc., plans to sell five-year, dollar-denominated eurobonds worth up to $1 billion, according to a filing with the Istanbul Stock Exchange.

CEDAR FAIR ENTERTAINMENT CO., the operator of amusement parks that called off a takeover by an Apollo Management LP affiliate last month, said it plans to sell $500 million of senior unsecured notes due in 2020. Proceeds will be used to repay existing debt, the Sandusky, Ohio-based company said in a May 20 statement distributed by PR Newswire.

WILLBROS GROUP INC. plans to sell $250 million of six-year notes and seek a $50 million term loan to help pay for its acquisition of InfrastruX Group Inc., according to a company statement distributed by Marketwire. Willbros will also use 7.9 million shares of its stock and cash on hand to pay for the acquisition, it said in the statement. Moody’s rates the notes B3 and S&P ranks them B+.

DRIVETIME AUTOMOTIVE GROUP INC. may sell $200 million of seven-year notes, according to a person familiar with the offering. Proceeds from the sale of the senior secured notes may be used to repay debt, said the person, who declined to be identified because terms aren’t set.

IRSA INVERSIONES Y REPRESENTACIONES SA, Argentina’s biggest real-estate company, said it plans to sell $150 million of senior notes. The offering may be increased to as much as $250 million, the company said in a May 17 statement distributed by PR Newswire. S&P assigned the notes a grade of B-, six steps below investment quality, it said in a report.

CAPELLA HEALTHCARE INC., the hospital operator backed by private-equity firm GTCR Golder Rauner LLC, plans to sell $500 million of seven-year notes, according to a person familiar with the transaction. Proceeds will be used to refinance Capella’s existing first-lien credit facilities and second-lien term loan, Moody’s Investors Service said in a report.

INDOSAT PALAPA CO., a unit of Indonesia’s second-largest phone operator, may sell 10-year senior notes in a benchmark offering, according to a person familiar with the transaction. Moody’s assigned a provisional Ba1 rating to the notes and S&P rated them BB, one step lower.

TITAN INTERNATIONAL INC., the maker of tire and wheel systems for off-highway equipment, said it plans to sell at least $150 million of senior unsecured notes. Proceeds will be used to repurchase the 8 percent senior unsecured notes due in 2012 and for general corporate purposes, the Quincy, Illinois- based company said in a May 13 statement distributed by Business Wire.

BWAY HOLDING CO., the paint-container and aerosol-can maker being acquired by Madison Dearborn Partners LLC, plans to sell $200 million of notes to help pay for its acquisition, according to a person familiar with the offering. It’s also seeking $565 million in bank debt, said the person, who declined to be identified because terms aren’t set.

INVENTIV HEALTH INC., the provider of sales and marketing services to science companies that is being acquired by Thomas H. Lee Partners, may sell $275 million of senior notes to back the purchase, it said in a regulatory filing.

CITGO PETROLEUM CORP., a U.S.-based unit of Petroleos de Venezuela SA, plans to sell $1.5 billion of secured notes due in 2017 and 2020, according to a person familiar with the offering. S&P assigned the notes a grade of BB+, one step below investment quality.

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 additional 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 1/2 years, will be sold in a private placement, said the person familiar with the transaction. The company, which initially planned to sell the debt in a 144A transaction, 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.

Offerings in Pipeline

SABIC CAPITAL, a unit of Saudi Basic Industries Corp., delayed a bond sale because of unfavorable spreads, Chief Financial Officer Mutlaq al-Morished said. The bond offer received more than $1 billion in investor interest, he said in a May 26 telephone interview. The spreads were “not what we wanted,” he said. Sabic Capital had hired HSBC Holdings Plc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to sell a benchmark-sized bond, al-Morished said in a May 17 telephone interview. Benchmark issues are typically at least $500 million.

GHANA is considering selling its second dollar bond next year to tap investor demand as the start-up of oil production boosts economic growth and narrows the budget deficit, Deputy Finance Minister Fifi Kwetey said. The government is considering a “no-deal roadshow” as early as the fourth quarter to gauge international investors’ appetite, Kwetey said in a May 26 interview in Abidjan. Ghana sold its first global bond in 2007, raising $750 million to help fund the construction of roads and power plants.

ALLEGIANT TRAVEL CO., the passenger airline that caters to leisure travelers in small cities, said “due to adverse market conditions,” it’s discontinuing its private offering of senior unsecured notes, according to a statement distributed by PR Newswire.

ANGOLA received credit ratings from Moody’s, S&P, and Fitch Ratings that put it on par with Nigeria, Lebanon and Belarus, and paved the way for a planned sale of international bonds this year. The southern African nation’s creditworthiness was rated at B+ by S&P and Fitch, four levels below investment grade. Moody’s assigned an equivalent ranking of B1.

EURASIAN NATURAL RESOURCES CORP., a London-based iron ore and alumina producer with operations in China and Russia, said it delayed its first dollar bond sale. The company is “postponing meetings with investors regarding a potential bond issuance under its Euro Medium Term Note program until further notice,” Charlotte Kirkham, a spokeswoman for ENRC, said in an e-mail. The company had hired Deutsche Bank AG and Morgan Stanley to manage the sale, according to a person familiar with the transaction.

KAZAKHSTAN plans to sell between $500 million and $750 million in bonds to investors abroad in the autumn, Kazakh Finance Minister Bolat Zhamishev said in a May 14 interview in Zagreb. The bonds will probably be denominated in dollars and will be used to set a benchmark for corporate borrowing, Zhamishev said.

TRANSNET LTD., the South African state-owned transportation company, delayed a sale of dollar bonds after meeting with U.S. and European investors because of adverse market conditions, according to Barclays Plc-owned Absa Capital, which advised on the transaction. Transnet didn’t respond to e-mailed questions seeking comment on the postponement of the bond sale and its spokesman was unavailable when contacted on his mobile phone. The transport company is rated BBB+ by S&P, the third-lowest investment grade. Transnet said in February that it planned to sell $2 billion of international debt to help fund infrastructure projects.

QATARI DIAR REAL ESTATE INVESTMENT CO. may raise about $1.5 billion by selling global bonds backed by Qatar, according to a person familiar with the sale plan. The developer may offer 10- year conventional bonds and 5-year Islamic securities, said the person who declined to be identified because details of the transaction haven’t been completed. HSBC Holdings Plc and Barclays Capital are among banks expected to manage the sale, according to the person.

CREDIT EUROPE BANK LTD. plans to sell three-year bonds in dollars, according to people with knowledge of the sale. The notes may be priced to yield 7.75 percent to 8 percent, the people said. Citigroup Inc. is managing the sale.

JONES APPAREL GROUP INC. postponed an offering of $250 million of senior notes due 2018. The New York-based retailer is paying $180 million for a 55 percent stake in Stuart Weitzman Holdings LLC, a closely held maker of women’s apparel, according to a May 6 statement distributed by PR Newswire. Proceeds from the notes sale will be used for general corporate purposes and to help fund the acquisition, the company said. Citigroup Inc., JPMorgan Chase & Co., SunTrust Banks Inc. and Wells Fargo & Co. will manage the sale.

ESSAR STEEL HOLDINGS LTD. postponed a sale of dollar- denominated bonds amid rising investor concern over contagion from Europe’s debt crisis. Essar “decided to postpone their planned financing,” company spokesman Manish Kedia said in a statement.

BANCO CRUZEIRO DO SUL SA postponed an offering of 10-year dollar bonds after global market turmoil pushed up borrowing costs, the company said.

CHINA ORIENTAL GROUP CO. plans to sell senior notes to provide working capital and possibly to finance the purchase of steel mills and iron ore assets in China. Deutsche Bank AG will manage the sale with ING Groep NV, according to a statement to the Hong Kong stock exchange.

DSW HOLDINGS INC., a unit of DS Waters Enterprises LP, postponed a $475 million sale of senior secured notes due in 2017, according to a person familiar with the transaction, who declined to be identified because the marketing is private.

OAO SBERBANK hired DZ Bank AG, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to organize meetings with bond investors, according to a banker involved in the transaction.

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 of dollar- denominated notes in 2010, according to a statement on State Bank of Vietnam’s Web site.

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.

GLORIOUS PROPERTY HOLDINGS LTD. postponed its first sale of dollar-denominated bonds, citing unfavorable market conditions. The postponement was disclosed in an e-mailed statement by 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 Plc to manage the offering.

FIRSTRAND LTD., South Africa’s second-largest banking group, said it postponed a planned sale of dollar bonds because of volatile market conditions. The sale may now take place later this year, Andries du Toit, group treasurer at FirstRand in Johannesburg, said in an interview.

KOREA FINANCE CORP. plans to sell $100 million to $200 million of foreign-currency bonds 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, known as Nonghyup, hired five banks to help it sell U.S. dollar-denominated bonds, according to two people with knowledge of the matter. Citigroup Inc., Credit Agricole CIB, ING Groep NV, Morgan Stanley and Royal Bank of Scotland Group Plc will help the company with the benchmark offering, the people said. The federation, which provides credit and banking services to farmers, is considering a maturity of 5 1/2 years, according to one of the people. Moody’s Investors Service rates Nonghyup A1.

PTT PRODUCTION & EXPLORATION PCL, 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. 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 may raise $1 billion to $1.5 billion from the sale of dollar-denominated Islamic bonds, its first global offering in almost eight years, according to a finance ministry official with direct knowledge of the plan. The Southeast Asian nation is raising less than originally planned as it needs fewer funds to plug its budget deficit given the country’s economy is recovering, said the official who declined to be identified because the deal has yet to be completed. The government is still aiming to start the debt sale in June, the official said.

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP. of the Philippines may sell between $750 million and $1.5 billion of dollar-denominated bonds “anytime” to help refinance maturing debt through 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 5- to 7-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.

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 delay selling dollar-denominated bonds until July or even the autumn, Deputy Finance Minister Dominik Radziwill was quoted as saying by PAP newswire. Poland may sell bonds in euros as early as the autumn to prefinance its 2011 borrowing needs, Radziwill was quoted as saying.

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 5 and 10 years, Bayartsogt said in an interview. The securities may offer a yield of between 8 percent and 11 percent, he said.

To contact the reporter on this story: Craig Trudell n New York at ctrudell1@bloomberg.net.

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