Visant Plans Debt as Bond Sales Rack up Third-Busiest Day: New Issue Alert

Visant Holding Corp., the U.S. publishing firm owned by KKR & Co., is marketing debt as corporate bond sales jumped to the third-most this year.

The firm’s Visant Corp. unit plans to sell $750 million of notes due 2017, the Armonk, New York-based company said yesterday in a statement distributed by PR Newswire.

Company bond sales in the U.S. surged to $16.4 billion yesterday, surpassing the weekly totals for the past three periods in a single day, according to data compiled by Bloomberg. It was the third-busiest day this year, the data show. Companies are taking advantage of record-low borrowing costs to sell debt, said Tom Murphy, a portfolio manager at Columbia Management in Minneapolis.

“Equity markets are feeling better, there’s a lot of cash out there and a lot of companies want to take advantage of low all-in yields,” said Murphy, who helps oversee more than $25 billion of investment-grade credit at Columbia Management in Minneapolis. “That’s the recipe for a lot of supply and a lot of demand.”

The Standard & Poor’s 500 Index climbed the most since the five days ended July 9 last week, before dropping 1.2 percent yesterday. Companies sold $18.8 billion of dollar-denominated debt on Feb. 4 and $19.8 billion of bonds on Jan. 5, Bloomberg data show.

Lloyds, SocGen

The extra yield investors demand to own investment-grade debt instead of Treasuries was unchanged at 190 basis points, or 1.9 percentage points yesterday, according to Bank of America Merrill Lynch’s U.S. Corporate Master index. Yields fell to 3.83 percent, near the record 3.74 percent on Aug. 24, the lowest in the measure’s history dating to October 1986.

Lloyds TSB Bank Plc, the U.K.’s largest mortgage lender, and Societe Generale SA, France’s second-largest bank after BNP Paribas SA, each sold $2 billion of dollar-denominated debt to lead issuance, Bloomberg data show.

MetroPCS Communications Inc., the U.S. pay-as-you-go mobile phone company, was the only high-yield, high-risk issuer, selling $1 billion of notes in a boosted offering, the data show. The company earlier marketed $500 million of the notes, according to a regulatory filing.

Spreads on high-yield, high-risk debt widened 6 basis points to 668 basis points, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index. Yields on the securities fell to 8.471 percent from 8.494 percent. Junk bonds are rated below Baa3 by Moody’s Investors Service and BBB- by Standard & Poor’s.

Visant Corp. plans to sell notes to repay existing senior secured credit facilities, fund tender offers, make dividend and dividend-equivalent payments to holders of its parent company’s common stock and options, and related expenses, according to the statement.

The following is a description of at least $4.65 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

KOREA HYDRO & NUCLEAR POWER CO., a unit of state-run Korea Electric Power Corp., may sell bonds denominated in U.S. dollars, according to a person familiar with the matter.

DOHA BANK QSC, Qatar’s third-largest bank, may raise as much as $1 billion from bond sales, its chief executive officer said. The debt is likely to be 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 will sell the bonds in dollars and the local riyal currency, the CEO said in a July 25 interview.

Not Rated

CELANESE CORP., the largest producer of acetyl chemicals used in paint and plastics, plans to sell $400 million of senior unsecured notes due in 2018, it said in a statement distributed by Business Wire. The Dallas-based company plans to use proceeds to retire existing bank debt, according to the statement.

STERICYCLE INC. plans to issue $175 million of seven-year, 3.89 percent notes and $225 million of 10-year, 4.47 percent debt after receiving informal commitments from 22 institutional investors to buy the securities, it said in a statement distributed by Business Wire.

High Yield

EXCO RESOURCES INC., the Dallas-based oil and gas producer, plans to sell $750 million of senior notes due in 2018 to repay debt, it said in a statement distributed by Business Wire. JPMorgan Chase & Co., Bank of America Corp., BNP Paribas, Royal Bank of Canada and Wells Fargo & Co. are managing the sale, Exco said in the statement.

VISANT HOLDING CORP., the U.S. marketing and publishing firm owned by KKR & Co., plans to sell $750 million of notes due in 2017 through its Visant Corp. unit, according to a statement distributed by PR Newswire. Visant is also seeking a $1.25 billion term loan and a $175 million revolving line of credit, the Armonk, New York-based company said in the statement. Proceeds from the borrowings may be used to repay debt and pay a dividend to investors in Visant’s stock and options.

TITAN INTERNATIONAL INC., the maker of tires and wheels for off-highway vehicles, plans to sell bonds in September or October and will use the proceeds to repay debt, Chief Financial Officer Paul Reitz said in a telephone interview. The Quincy, Illinois-based company plans to buy back up to $139.9 million of notes maturing in 2012, it said in a statement distributed by Business Wire. The company withdrew a proposed $150 million offering announced in May because of adverse market conditions, Reitz said.

NBTY INC., the maker of Nature’s Bounty and MET-Rx nutritional supplements, may issue $900 million of bonds in addition to seeking a $1.5 billion term loan and a $200 million revolving line of credit to help pay for its acquisition by Carlyle Group, according to a person familiar with the transaction who declined to be identified because terms aren’t set. S&P assigned the notes, or borrowings under a bridge credit facility in their place, a rank of B.

UNIVERSAL HEALTH SERVICES INC., the operator of more than 100 U.S. medical facilities that’s buying Psychiatric Solutions Inc., cut its offering of senior unsecured notes to $250 million, according to a person familiar with the transaction. It increased the size of the term loans it’s seeking by $100 million, said the person, who declined to be identified because terms aren’t set. The King of Prussia, Pennsylvania-based company previously planned to issue $400 million of senior unsecured debt to help finance the acquisition, according to a filing with the Securities and Exchange Commission.

E-LAND FASHION CHINA HOLDINGS LTD, the Hong Kong-based apparel products provider, hired Morgan Stanley to help it sell $200 million of three-year bonds, according to a person familiar with the matter. Moody’s Investors Service ranked the proposed notes at Ba2, citing growing personal consumption in China, E- Land Fashion’s moderate scale and significant business volatility. Proceeds will be used mainly for capital expenditures and general corporate purposes, Moody’s said in the report.

Offerings in Pipeline

BANCO DE CREDITO DEL PERU, the nation’s largest bank, may sell benchmark 10-year dollar-denominated notes in the country’s first corporate international bond issue in four months. BCP, a unit of Credicorp Ltd., hired Bank of America Corp. and Deutsche Bank AG to arrange meetings with bond investors, according to a person familiar with the transaction who declined to be identified because terms aren’t set. A benchmark sale is typically at least $500 million.

TELEMAR NORTE LESTE SA, Brazil’s biggest fixed-line phone company, hired Bank of America Corp., BNP Paribas SA, BTG Pactual SA and Itau Unibanco Holding SA to sell benchmark dollar bonds, according to a person familiar with the transaction. Telemar, known as Oi, plans to start meeting with bond investors Sept. 6, said the person, who declined to be identified because terms aren’t set.

AEGIS LTD., an outsourcing unit of Essar Group, may sell the first non-convertible dollar bonds from an Indian information technology company. The company, which bought PeopleSupport Inc. in 2008, may sell its bonds as part of a financing package that would include a loan of as much as $350 million to consolidate debt, Chief Financial Officer C.M. Sharma said. The money would go to fund expansion

AMERICAN INTERNATIONAL GROUP INC., the insurer that’s majority owned by the U.S., may sell bonds to help repay its government bailout, it said in an Aug. 9 registration statement filed with the Securities and Exchange Commission.

GATX CORP., a Chicago-based company that leases railroad cars and other equipment, filed a shelf registration with the Securities and Exchange Commission to sell debt securities and pass-through certificates. The debt securities may be senior or subordinated, according to the filing.

JSW STEEL LTD, India’s third-largest steelmaker, plans to sell dollar bonds for the first time in three years and as rupee-denominated finance costs rise. JSW has applied for credit ratings before a possible offshore bond sale to help build a 200 billion rupee ($4.3 billion) steel and power plant in West Bengal, Chief Financial Officer Seshagiri Rao said.

ARGENTINA may sell $1 billion of bonds due in 2017, El Cronista newspaper reported, without saying how it obtained the information. The government is also planning to offer an exchange for dollar bonds due in 2011 and 2012, the Buenos Aires-based publication said.

RURAL ELECTRIFICATION CORP., India’s state-owned lender to power projects, may sell as much as $300 million of bonds in U.S. dollars, Finance Director Hari Das Khunteta said in a telephone interview. Rural Electrification plans to raise $500 million from debt sales in the year ending March 31, he had said on April 16.

THE PHILIPPINES hired eight banks to help arrange the sale of 10-year bonds, which may also include five- and seven-year issues, Treasurer Roberto Tan wrote in a mobile-phone message. The Philippines is also preparing to seek central bank approval for a planned sale of new dollar-denominated debt to exchange for older, shorter-dated notes, Finance Secretary Cesar Purisima said on August 2.

UKRAINE may sell bonds in the international capital markets, according to Dragon Capital, the former Soviet republic’s biggest brokerage. The government may sell $1.5 billion to $2 billion of 10-year, dollar-denominated debt with a yield of 7 percent to 7.5 percent after getting approval for a new International Monetary Fund loan and having its credit rating raised by Standard & Poor’s, said Olena Bilan, Dragon’s chief economist, at a press briefing in Kiev on July 30.

CZECH REPUBLIC plans to sell as much as $2 billion of dollar bonds to diversify from koruna and euro debt, Eduard Janota, former finance minister, said in an interview for Mlada Fronta Dnes newspaper.

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 about $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.

CORPORACION FINANCIERA DE DESAROLLO SA, Peru’s state development bank known as Cofide, plans to sell as much as $250 million of 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 hired HSBC, Bank of America Merrill Lynch and Royal Bank of Scotland to sell $1 billion of bonds, the Central Bank of Sri Lanka said on its website on Aug 12.

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.

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 Latin Finance 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 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.

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 was considering a “no-deal roadshow” 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.

MONGOLIA plans to raise $500 million selling bonds in 2010 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 after Europe’s debt crisis drove up borrowing costs. Investment banks are advising Mongolia to issue debt with maturities of 5 years to 10 years, Finance Minister Sangajav Bayartsogt said in a Feb. 9 interview. The securities may yield 8 percent to 11 percent, he said.

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

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