Calumet Plans Debt Amid Fastest Pace of Sales Since April: New Issue Alert

Calumet Specialty Products Partners LP, the Indianapolis-based refiner of specialty hydrocarbon products, plans to sell debt as companies issue bonds at the fastest pace since April.

Calumet Specialty will sell $450 million of notes as soon as July 16, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

Debt sales were $7.65 billion yesterday, pushing July issuance to $29.7 billion, according to data compiled by Bloomberg. That’s the busiest start of a month since April, Bloomberg data show. Borrowers are taking advantage of stability in the market to sell bonds before the bulk of earnings reports, said Tom Murphy at Columbia Management in Minneapolis.

“It shouldn’t surprise anybody that corporate America is trying to rush through the eye of the needle here to do as much issuance as they can, as we get past volatility and before we have some seasonal issues that make the new-issue calendar quiet,” said Murphy, who helps manage more than $20 billion of investment-grade credit.

Company bond sales are returning to levels seen before concern about Europe’s sovereign debt crisis slowed May issuance to the least since October 2008. Month-to-date volume has jumped 69 percent from the similar period in June, surged 85 percent from May and fell 0.76 percent from $29.9 billion in the April period, Bloomberg data show.

The extra yield investors demand to own investment-grade bonds instead of Treasuries narrowed 3 basis points to 200 basis points, according to Bank of America Merrill Lynch’s U.S. Corporate Master index. Absolute yields rose 2 basis points to 4.35 percent. A basis point is 0.01 percentage point.

‘Yields Are Pretty Low’

“There’s decent spread in the marketplace here, but from an all-in yield perspective, the yields are pretty low historically,” Murphy said.

Petroleos Mexicanos, the state-owned oil company, led corporate bond sales yesterday, issuing $2 billion of 10.5-year dollar-denominated bonds, Bloomberg data show.

NXP BV had the biggest sale of high-yield, high-risk debt, issuing $1 billion of notes due in 2018 after increasing the size of its offering from $600 million, Bloomberg data show.

Junk-bond spreads narrowed 15 basis point to 670 basis points yesterday, according to the Bank of America Merrill Lynch U.S. High Yield Master II index. Absolute yields fell 8 basis points to 8.9 percent. High-yield, high-risk, or junk, bonds are rated below Baa3 by Moody’s Investors Service and BBB by Standard & Poor’s.

Target Sells

Target Corp., the second-largest U.S. discount retailer, sold $1 billion of 10-year debt yesterday in its first bond offering since January 2008, Bloomberg data show.

The retailer’s 10-year notes were sold at a yield of 3.91 percent, or 80 basis points more than similar-maturity Treasuries, Bloomberg data show. Proceeds may be used to repay existing debt, fund construction of new branches, remodel existing stores, finance share repurchases, and acquire real estate, other assets and companies, Minneapolis-based Target said in a regulatory filing.

U.S. stocks are rallying for a second consecutive week after earnings results from Alcoa Inc., the largest U.S. aluminum producer, and CSX Corp., the third-largest U.S. railroad by 2009 revenue, beat analysts’ estimates.

Calumet Specialty plans to use proceeds from its debt sale to repay bank debt, the company said in a statement distributed by Business Wire. The statement didn’t specify the timing of the sale.

Wal-Mart Stores Inc. is the world’s largest retailer. Union Pacific Corp. is the biggest U.S. railroad, followed by Berkshire Hathaway Inc.’s Burlington Northern Santa Fe LLC.

Following is a description of at least $4.74 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

SUMITOMO MITSUI BANKING CORP. plans to sell debt in a benchmark offering, according to a person familiar with the transaction. Proceeds from the 3- and 5-year notes will be used for general corporate purposes, said the person, who declined to be identified because terms aren’t set. A benchmark offering is typically at least $500 million.

PTT EXPLORATION & PRODUCTION PCL’S Australian unit hired Credit Suisse Group AG and Royal Bank of Scotland Group Plc to help it sell five-year bonds in U.S. dollars, according to a person familiar with the matter. The bonds may be rated A3 by Moody’s Investors Service and may be sold this week, the person said, asking not to be identified as the plan is private. PTT Exploration & Production is Thailand’s only publicly-traded oil and gas explorer.

CHILE plans to sell $1 billion of 10-year bonds, along with warrants and peso debt, according to a filing with the U.S. Securities and Exchange Commission. Chile will use the proceeds for general purposes, the filing said. The country is seeking financing for repairs after a Feb. 27 earthquake and subsequent tsunami killed more than 400 people and caused as much as $30 billion of damage. Moody’s upgraded Chile’s rating to Aa3 from A1 on June 16, citing “economic and financial resilience even in the face of major adverse shocks, including February’s historic earthquake.”

DOHA BANK QSC, Qatar’s third-largest bank, may raise as much as $1 billion from bond sales, its chief executive officer said. The money is likely to be raised for five years and is meant to “fix the maturity mismatch” on the bank’s balance sheet, Raghavan Seetharaman said in a June 16 telephone interview from Doha. The bank hasn’t decided which currency to sell the bonds in, he said. The lender said in April that it planned to sell senior notes in dollars 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

QATARI DIAR REAL ESTATE INVESTMENT CO. sale of dollar bonds is due to be priced today, a banker involved in the transaction said. The five-year securities may yield about 185 basis points more than U.S. Treasuries and the 10-year bonds may have a spread of 195 basis points, the banker said. The property arm of Qatar’s sovereign wealth fund plans to sell $3.5 billion of bonds.

IRSA INVERSIONES Y REPRESENTACIONES SA, Argentina’s biggest real-estate company, may complete its sale of 10-year dollar bonds by July 16, said a person familiar with the transaction. Citigroup Inc., Itau Unibanco Holding SA and Banco Santander SA are arranging the sale, said the person who declined to be identified because terms aren’t set. He said the size of the offering hasn’t been determined.

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 to repay existing indebtedness, Sensient said in a March 1 regulatory filing.

High Yield

INTERACTIVE DATA CORP., the Pearson Plc unit that provides financial market data and services, plans to sell $700 million of notes due 2018 that will help fund the company’s buyout by Silver Lake Technology Management LLC and Warburg Pincus LLC, according to a person familiar with the offering who declined to be identified because terms aren’t set. The Bedford, Massachusetts-based company will also use a five-year, $160 million revolving line of credit and a 6.5-year, $1.33 billion term loan to back the buyout. Moody’s Investors Services assigned a Caa1 rating to the proposed securities on July 1.

CALUMET SPECIALTY PRODUCTS PARTNERS LP, the Indianapolis- based refiner of specialty hydrocarbon products, plans to sell $450 million of senior notes. Proceeds will be used to repay bank debt, the company said in a July 12 statement distributed by Business Wire. Calumet Specialty plans to market the 10-year notes beginning through July 16, according to a person familiar with the transaction. Standard & Poor’s assigned the notes a B rating.

GENTIVA HEALTH SERVICES INC., the U.S. home-nursing company that is buying Odyssey HealthCare Inc., plans to sell $305 million of eight-year notes, the Atlanta-based company said in a May 24 regulatory filing, without specifying the timing of the transaction. Proceeds will be used to help fund the takeover, according to the filing. Standard & Poor’s assigned the unsecured notes a B- credit rating on June 29. Moody’s Investors Service rated the notes a grade of B2 and ranked $925 million of loans three steps higher at Ba2, it said in a report.

UNIVERSAL HEALTH SERVICES INC., the operator of more than 100 U.S. medical facilities that’s buying Psychiatric Solutions Inc., plans to sell $400 million of senior unsecured debt to help finance the acquisition, it said in a filing with the Securities and Exchange Commission.

PROMSVYAZBANK OJSC, Russia’s third-largest private bank, plans to sell $200 million of six-year loan participation notes at a yield of 11.25 percent, according to two people with knowledge of the sale.

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. Moody’s Investors Services assigned a provisional Ba1 rating. Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Standard Chartered Plc are managing the sale.

CEDAR FAIR ENTERTAINMENT CO., the operator of amusement parks that called off a takeover by an Apollo Management LP affiliate, 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. Moody’s Investors Service rated the company’s senior notes B2, citing the refinancing meaningfully improves the company’s liquidity position and provides the company flexibility to reduce debt and manage through a period of attendance-constraining high unemployment notwithstanding the increase in cash interest costs resulting from the refinancing.

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.

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.

Offerings in Pipeline

ENERGYSOLUTIONS INC., the Salt Lake City-based nuclear services company, has amended its credit facility and plans to refinance that debt with borrowings under new loans and an offering of senior notes, the company said today in a statement distributed by Marketwire.

FIRST PACIFIC CO., an investment-management firm based in Hong Kong, plans a U.S. dollar bond sale as part of its refinancing and debt management program. The net proceeds from the bonds would be used to repay borrowing, the company said in an e-mailed statement.

POTASH CORPORATION OF SASKATCHEWAN INC., the world’s largest fertilizer company by capacity, filed a registration statement with the U.S. Securities and Exchange Commission for $2 billion of debt securities.

INDONESIA plans to name three banks to help it sell approximately $650 million of Islamic bonds in October, Dahlan Siamat, director for Islamic financing at the finance ministry, said in a telephone interview in Jakarta. The government sold its first international Islamic dollar bonds in April 2009.

NOMURA HOLDINGS INC. Japan’s largest brokerage, plans to sell dollar-denominated sukuk, or Islamic bonds, in Malaysia, according to a July 6 company statement. Nomura may sell $100 million of Ijarah sukuk that will mature in 2012. The securities will yield 160 basis points more than the London interbank offered rate, said Jamelah Jamaluddin, chief executive officer of Kuwait Finance House (Malaysia) Bhd., a unit of Kuwait’s biggest Islamic bank, the sale arranger.

OAO GAZPROMBANK, the lending unit of Russia’s gas export monopoly, hired Barclays Capital, Royal Bank of Scotland Group Plc, and UBS AG to organize meetings with investors in Europe and Asia starting July 5, according to two people with knowledge of the transaction.

CORPORACION FINANCIERA DE DESAROLLO SA Peru’s state development bank known as Cofide, plans to sell as much as $250 million of dollar-denominated bonds, according to Chief Financial Officer Carlos Linares. Linares said in an interview in Lima, that the lender is selling long-term debt as it boosts lending to local infrastructure projects. “Peru’s need for infrastructure is huge,” Linares said. “The government is trying to promote foreign investment in a long list of projects.”

SRI LANKA plans to sell dollar-denominated bonds, according to its central bank. The South Asian country’s third-ever overseas offering is likely after August, Central Bank of Sri Lanka Assistant Governor C.J.P. Siriwardena said in a telephone interview on June 30.

GEORGIAN RAILWAY LTD. hired Bank of America Corp. and JPMorgan Chase & Co. for a sale of bonds in dollars, according to a banker involved in the transaction.

JORDAN plans to sell about $500 million of bonds, Finance Minister Mohammad Abu Hammour said in an interview on June 23. The sale will be denominated in U.S. dollars “as it’s a stable currency and the Jordanian dinar is pegged to it,” Abu Hammour said.

BANK OF EAST ASIA LTD. hired Citigroup Inc. and JPMorgan Chase & Co. to help it sell subordinated 10-year bonds in dollars, according to a person with direct knowledge of the matter. The banks are meeting potential investors in Hong Kong and Singapore, the person said.

URUGUAY may sell as much as $1 billion of bonds in 2011, including $500 million of dollar-denominated debt, Carlos Steneri, director of public credit at Uruguay’s Ministry of Economy and Finance, said June 3 at a LatinFinance conference in London. The dollar-denominated bonds may have a maturity of 20 years or more, Steneri said.

MALAYSIA plans to raise about $1 billion from its first sale of conventional dollar bonds in eight years after drawing bids for five times the Islamic debt it offered, a finance ministry official said. The government may hire the same banks, including CIMB Group Holdings Bhd. and HSBC Holdings Plc, to arrange the sale by Sept. 30, said the official, who declined to be named as the discussions are private. Malaysia raised $1.25 billion from a Shariah-compliant dollar bond on May 27. Malaysia is rated A3 by Moody’s and A- by S&P.

INDOSAT PALAPA CO., a unit of Indonesia’s second-largest phone operator, delayed a planned dollar bond sale until market conditions improve, a person familiar with the matter said May 26. Indosat began meetings with investors in Asia, the U.S. and Europe on May 12 to gauge demand for a global bond sale, according to a company statement sent to the Indonesian stock exchange that day. Moody’s assigned a provisional Ba1 rating to the notes and S&P rated them BB, one step lower.

SABIC CAPITAL, a unit of Saudi Basic Industries Corp., will sell bonds when market conditions and rates are favorable, its vice president for corporate finance Mutlaq al-Morished told al- Arabiya television in Dubai on June 16. Sabic delayed a bond sale because of unfavorable spreads, al-Morished said in a May 26 telephone interview. Sabic Capital had hired HSBC Holdings Plc, JPMorgan Chase & Co. and Royal Bank of Scotland Group Plc to manage a benchmark-sized offering.

GHANA is considering selling its second dollar bond in 2011 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.

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. 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. The bonds will probably be denominated in dollars and will be used to set a benchmark for corporate borrowing, Zhamishev 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.

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.

PTT EXPLORATION & PRODUCTION 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.

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 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.

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

MONGOLIA plans to raise $500 million selling bonds this year and the remainder of a planned $1.2 billion program will be sold according to market conditions, Batbayar Balgan, director general of the financial and economic policy department of Mongolia, said at a forum in Ulan Bator on June 16. The government scaled back its plans for global bond sales this year after Europe’s debt crisis drove up borrowing costs. Investment banks are advising Mongolia to issue debt with maturities of 5 to 10 years, Bayartsogt said in a Feb. 9 interview. The securities may yield 8 percent to 11 percent, he said.

-- With assistance from Katie Evans and Gabrielle Coppola in New York and Andres R. Martinez in Mexico City. Editors: Mitchell Martin, Cecile Gutscher

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net.

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