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Thermadyne Plans Debt Amid Junk Fund Inflows: New Issue Alert

Thermadyne Holdings Corp., the St. Louis-based welding-products maker, is marketing $250 million of speculative-grade notes after mutual funds that invest in high- yield debt took in the most cash in more than three months.

Proceeds may be used to help pay for the company’s acquisition by Irving Place Capital in a leveraged buyout, according to a person familiar with the offering. The notes, which are graded B3 by Moody’s Investors Service and an equivalent B- by Standard & Poor’s, said the person, who declined to be identified because terms aren’t set.

Thermadyne, Gymboree Corp., the children’s clothing retailer being acquired by Bain Capital LLC, and at least 15 other companies are planning to sell high-yield, high-risk bonds after inflows into junk-debt funds climbed to $1.02 billion last week, according to research firm EPFR Global. That was the most since $1.18 billion for the week ended Aug. 4.

The extra yield investors demand to own high-yield debt instead of Treasuries rose 22 basis points to 589 basis points, the most since May 25, according to the Bank of America Merrill Lynch U.S. High Yield Master II Index. Yields on the debt rose 13.5 basis points to 7.82 percentage points, the index data show.

High-yield debt is rated below Baa3 by Moody’s and less than BBB- by S&P. A basis point is 0.01 percentage point.

El Paso Pipeline

El Paso Pipeline Partners LP sold $750 million of five- and 30-year debt to lead $1.79 billion of speculative-grade issuance today, according to data compiled by Bloomberg. This week’s sales of $4.44 billion compare with $5.48 billion over the similar period last week, Bloomberg data show.

Spreads on investment-grade corporate bonds were unchanged at 176 basis points, according to the Bank of America Merrill Lynch U.S. Corporate Master Index. Yields fell 4 basis points to 3.83 percent, the index data show.

Laboratory Corp. of America Holdings issued $925 million of debt in a two-part offering, Pacific Gas & Electric Co. sold $500 million of bonds due in 10 and 30 years and Gatx Corp. priced $250 million of securities maturing in July 2016 in yesterday’s only investment-grade transactions. Issuance this week of $4.95 billion compares with $18.9 billion in the first two days of last week, Bloomberg data show.

The following is a description of at least $7.03 billion of pending sales of dollar-denominated bonds in the U.S.

Investment Grade

CALIFORNIA WATER SERVICE GROUP, the utility with customers in California, New Mexico and Washington, plans to sell $100 million of first-mortgage bonds, the company said in a Nov. 16 statement distributed by Marketwire. Proceeds may be used to pay the San Jose, California-based company’s outstanding short-term borrowings and for general corporate purposes, according to the statement.

TELEPHONE & DATA SYSTEMS INC., a telecommunications services provider, plans to sell $200 million of 49-year notes that will be non-callable for five years, according to a person familiar with the transaction. The Chicago-based company’s debt may yield 6.875 percent to 7 percent, said the person, who declined to be identified because terms aren’t set. The bonds may be rated Baa2 by Moody’s Investors Service and BBB- by Standard & Poor’s, the person said. Proceeds will be used to redeem the company’s 7.6 percent notes due in 2041, according a regulatory filing that didn’t specify the size, timing or maturity of the sale.

FIRST GULF BANK PJSC plans to sell five-year dollar- denominated bonds that may yield between 3.25 percent and 3.5 percent, said three people familiar with the transaction, who declined to be identified because terms aren’t set. BNP Paribas SA, Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc and National Bank of Abu Dhabi PJSC are arranging meetings with investors, two people said on Nov. 1. The Abu Dhabi-based lender is rated A2 by Moody’s.

TRANSNET LTD., South Africa’s state-owned ports, rail and pipeline operator, said it may sell $1 billion worth of bonds in international markets to pay for expansion. Transnet has 35.2 billion rand ($5 billion) of debt outstanding.

High Yield

MURRAY ENERGY CORP. plans to sell $150 million of seven- year notes that can’t be called for four years, according to a person familiar with the offering. Proceeds may be used for general corporate purposes, said the person, who declined to be identified because terms aren’t set.

CYRELA BRAZIL REALTY SA EMPREENDIMENTOS E PARTICIPACOES, Brazil’s biggest homebuilder, hired Banco do Brasil SA, Credit Suisse Group AG, Itau Unibanco Holding SA and Morgan Stanley to arrange bond investor meetings, according to a person familiar with the matter. Cyrela will meet with investors in Asia, Europe and the U.S., said the person, who declined to be identified because the conversations are private. S&P raised its rating on the company one step to BB on Sept. 30.

BRIGHTSTAR CORP., a distributor of wireless communication devices, plans to sell $250 million of six-year senior notes that are non-callable for three years, according to a person familiar with the transaction. The company plans to use proceeds to refinance existing debt, said the person, who declined to be identified because terms aren’t set. Jeffries Group Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Barclays Plc and Credit Suisse Group AG are managing the sale, the person said.

DELONG HOLDINGS LTD., a Singapore-based steel trader, hired Credit Suisse Group AG to help it organize meetings with investors ahead of an international sale of guaranteed senior notes. Money raised will be used to redeem 5 percent convertible bonds due 2012, to repay bank loans and for acquisitions relating to iron ore and other raw materials used by the steel industry, the company said in a statement to Singapore’s stock exchange. The dollar-denominated notes were assigned a provisional rating of B3 by Moody’s Investors Service, the ratings company said in a note.

FLAKEBOARD CO., the Canadian producer of fiberboard and particleboard used to build furniture and countertops, plans to sell $225 million of senior secured notes maturing in 2017, S&P said in a statement. The ratings company grades the proposed U.S. dollar-denominated debt as B, according to the statement.

ENDO PHARMACEUTICALS HOLDINGS INC., the maker of pain- management medication including Percocet and Lidoderm, plans to sell $400 million of senior unsecured notes due 2020, according to a company statement. It would be the Chadds Ford, Pennsylvania-based company’s first fixed-rate bond sale, an Endo spokesman said in an e-mail. Proceeds will be used to help finance the company’s acquisition of Qualitest Pharmaceuticals Inc., according to the statement.

GYMBOREE CORP., the children’s clothing retailer being purchased by Bain Capital LLC, plans to sell $400 million of eight-year notes through Giraffe Acquisition Corp., according to a person familiar with the transaction. Proceeds will be added to borrowings under a senior secured credit line and an equity contribution to pay for Gymboree’s acquisition, said the person, who declined to be identified because terms aren’t set.

PAETEC HOLDINGS CORP., the telecommunications company that is buying Cavalier Telephone Corp., plans to sell $420 million of senior notes due 2018 through its Paetec Escrow Corp. unit, it said in a statement distributed by Business Wire. Proceeds will be released to the parent company after the acquisition of Cavalier Telephone closes, according to the statement. Proceeds will be used along with cash on hand from both companies to help fund the purchase, according to the statement.

PERFORMANCE FOOD GROUP INC., the private-equity-owned food and food-related product distributor, plans to sell $550 million of senior notes due in 2017, according to a person familiar with the transaction. Credit Suisse Group AG, Wells Fargo & Co., Bank of America Corp. and Macquarie Group Ltd. are managing the sale, according to the person, who declined to be identified because terms aren’t set.

SHIP FINANCE INTERNATIONAL LTD. plans to sell $400 million of senior notes due in 2020, the owner of crude-oil tankers and dry-bulk carriers said in a regulatory filing. Proceeds may be used to repay debt, including a tender offer for the Hamilton, Bermuda-based company’s existing senior notes due in 2013, and for general corporate purposes, according to the filing. Jefferies Group Inc. and Goldman Sachs Group Inc. are managing the sale, the filing said.

VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP plans to sell 10-year dollar bonds after meetings with investors in Asia, Europe and the U.S., said a person familiar with the transaction. Australia & New Zealand Banking Group Ltd., Credit Agricole CIB and Citigroup Inc. were hired to manage the sale, said the person, who declined to be identified because terms aren’t set. The company, also known as Vinacomin, is rated Ba3 at Moody’s and BB at S&P.

EXTERRAN HOLDINGS INC., a provider of natural gas compression services, plans to sell $350 million of senior notes maturing in 2018, it said in a Nov. 12 statement distributed by Business Wire. Proceeds from the privately placed notes may be used to repay borrowings under the Houston-based company’s asset-backed securitization facility and its senior secured credit line, according to the statement.

SPENCER SPIRIT HOLDINGS INC., the mall-based retailer of accessory and Halloween items, plans to sell $150 million of senior-secured notes due in 2016, according to a person familiar with the transaction. Proceeds may be used to repay existing debt and make a distribution to shareholders, said the person, who declined to be identified because terms aren’t set. Wells Fargo & Co. and UBS AG are managing the sale, the person said.

RAIN CII CARBON LLC and CII Carbon Corp. plan to sell $400 million of senior secured notes, according to a person familiar with the transaction. Proceeds may be used to repay debt, said the person, who declined to be identified because terms aren’t set. Citigroup Inc., Goldman Sachs Group Inc. and Jefferies Group Inc. are managing the offering for the units of Rain Commodities Ltd. of Hyderabad, India, the person said.

CLUBCORP INC., an owner and operator of golf courses, country clubs and resorts, plans to sell $415 million of senior unsecured notes maturing in 2018, according to a person familiar with the transaction. The debt will be non-callable for four years, said the person, who declined to be identified because terms aren’t set. Citigroup Inc. is managing the offering, the person said.

NORTEK INC., a manufacturer of building products for residential and commercial applications, plans to sell $300 million of senior notes maturing in October 2018, the company said in a statement distributed by PR Newswire. Proceeds may be used to repurchase a portion of Nortek’s outstanding 11 percent senior secured notes due in 2013 and for general corporate purposes, which includes acquisitions, according to the statement.

THERMADYNE HOLDINGS CORP., the maker of welding products that’s the target of a leveraged buyout by Irving Place Capital, plans to sell $250 million of senior secured seven-year notes, according to a person familiar with the transaction. The debt, will be non-callable for three years, said the person, who declined to be identified because terms aren’t set. Proceeds will be used to fund the LBO, the person said.

PETCO ANIMAL SUPPLIES INC., the pet-products and services retailer taken private in a 2006 buyout, plans to sell $500 million of senior unsecured eight-year notes, according to a person familiar with the transaction, who declined to be identified because terms aren’t set.

BURLINGTON COAT FACTORY WAREHOUSE CORP., the Bain Capital LLC-owned purveyor of discount apparel, plans to sell $500 million of eight-year senior unsecured notes to refinance high- coupon debt and fund a dividend. Proceeds may be used to repay the company’s existing term loan facility, fund a tender offer for outstanding debt and pay a dividend to equity holders, the company said in a Nov. 3 statement distributed by Business Wire.

PT ENERGI MEGA PERSADA, Indonesia’s second-biggest listed oil company, hired Nomura Holdings Inc. to help it with a dollar bond sale, according to a person familiar with the matter who declined to be identified because terms aren’t set.

SI ORGANIZATION INC., the Lockheed Martin Corp. unit formerly known as Enterprise Integration Group, may sell $175 million of senior subordinated notes, according to Standard & Poor’s. Proceeds may be used with $340 million of bank debt and $370 million of new common stock to pay for its acquisition by Veritas Capital, S&P said.

TRANSDIGM GROUP INC., the aircraft-components manufacturer that’s buying rival supplier McKechnie Aerospace Holdings Inc., plans to sell $780 million of senior subordinated notes to help fund the acquisition, the Cleveland-based company said in a filing with the Securities and Exchange Commission. The company is also planning a $900 million term loan and a $300 million revolving credit line, according to the filing. The notes were rated B3 by Moody’s.

WII COMPONENTS INC., the manufacturer of wood cabinet doors owned by Behrman Capital LP, plans to sell $115 million of senior secured five-year notes, the company said in an Oct. 25 statement distributed by Business Wire. The notes may be used to help fund a tender for outstanding 10 percent senior securities due 2012, according to the statement. S&P assigned the debt a grade of B-, it said in a statement.

Offerings in Pipeline

RURAL ELECTRIFICATION CORP., India’s state-controlled lender to power projects, hired Credit Agricole CIB, Royal Bank of Scotland Group Plc and Standard Chartered Plc to sell $500 million of bonds. Rural Electrification aims to price 5.5-year notes to yield between 195 basis points and 200 basis points more than similar-maturity U.S. Treasuries Finance Director Hari Das Khunteta said in a telephone interview from New Delhi on Nov. 10.

YUZHOU PROPERTIES CO. plans to sell bonds denominated in U.S. dollars, according to a person familiar with the transaction. Bank of China Ltd., Nomura Holdings Inc. and Royal Bank of Scotland Group Plc are arranging meetings with investors in Asia, Europe and the U.S., said the person, who asked not to be identified because the details are private.

JORDAN is selling $750 million of five-year bonds that will be priced to yield 4.125 percent, according to two people with knowledge of the sale. Arab Bank Plc, Credit Suisse Group AG, HSBC Holdings Plc and JPMorgan Chase & Co. are managing the sale.

AMERICAN INTERNATIONAL GROUP INC., the bailed-out insurer, plans to raise money in a debt sale as the company moves toward independence from the U.S. government, it said in a regulatory filing.

PTT EXPLORATION & PRODUCTION PCL, Thailand’s only listed oil and gas explorer, plans to sell bonds denominated in U.S. dollars, according to a person familiar with the transaction. PTT Exploration hired Barclays Plc to manage the sale, said the person, who declined to be identified because terms aren’t set. Barclays is arranging a U.S. dollar-denominated medium-term note program for the company, the person said.

INTERNATIONAL PETROLEUM INVESTMENT CO. plans to meet bond investors in the United Arab Emirates, according to two people with knowledge of the marketing. Goldman Sachs Group Inc., Bank of America Corp., HSBC Holdings Plc, National Bank of Abu Dhabi, Standard Chartered Bank and Royal Bank of Scotland Group Plc are arranging the meetings, said the people, who declined to be identified because terms aren’t set.

QATAR NATIONAL BANK may sell five-year dollar-denominated bonds, according to two people with knowledge of the transaction. The debt may yield in the 200 basis-point area more than the benchmark mid-swap rate, said the people, who declined to be identified because terms aren’t set. Barclays Capital, BNP Paribas SA, JPMorgan Chase & Co. and Standard Chartered Bank will manage the issue with QNB Capital, the people said.

PTA BANK, or Eastern and Southern African Trade and Development Bank, hired HSBC Holdings Plc and Standard Bank Group Ltd. to arrange bond investor meetings in Europe and Asia, according to two people with knowledge of the sale. The meetings will be held in Hong Kong, Singapore, Zurich, Geneva and London, said the people, who declined to be identified because terms aren’t set. The company may sell dollar bonds after the meetings, the people said.

MAQUINARIA ESPECIALIZADA MXO TRUST, a special-purpose company expected to provide construction machinery services to Corporacion GEO SAB de CV, hired Banco Santander SA to arrange bond investor meetings, according to a person with knowledge of the sale. A dollar bond sale may follow the meetings, to be held in London, Boston, New York and Los Angeles, said the person, who declined to be identified because terms aren’t set.

CREDIT BANK OF MOSCOW plans to sell five-year dollar bonds, according to a person familiar with the transaction. The sale of Reg S securities is being arranged by Commerzbank AG, ING Groep NV and Raiffeisen Bank International, the banker said.

DOHA BANK QSC, Qatar’s third-largest bank, hired Morgan Stanley and JPMorgan Chase & Co. to manage a planned $500 million bond sale, its chief executive officer said. The offering, announced on the Qatar Exchange website, will be marketed to investors in the U.S., Europe and the Middle East, Raghavan Seetharaman said in an Oct. 20 telephone interview.

BELARUS may sell debt in the U.S. and Asia, according to Finance Minister Andrei Kharkovets. “We will undoubtedly enter the Asian and the American markets,” Kharkovets said in an Oct. 15 interview in Moscow, declining to comment on the timing of possible sales.

GEORGIAN RAILWAY LLC, the former Soviet republic’s state- owned rail company, is preparing a bond roadshow in the U.S., Giorgi Gagnidze, the company’s financial director, said in comments broadcast on Rustavi-2 television.

ICICI BANK LTD., India’s second-largest lender, hired Barclays Capital, Citigroup Inc. and Deutsche Bank AG to sell as much as $1 billion of bonds with maturities between five and 10 years, according to three people familiar with the offering. India’s second-biggest lender is rated Ba1 by Moody’s and BBB-by S&P.

AL BARAKA BANK EGYPT ESC, a unit of Bahrain-based Albaraka Banking Group, may sell dollar-denominated Islamic bonds in the second half of 2011, the bank’s chairman said Sept. 29. The bank has not decided on the size of the bond, he said.

TURKIYE IS BANKASI AS hired JPMorgan Chase & Co., the Royal Bank of Scotland Plc, Standard Bank Plc and Standard Chartered to help find buyers for a planned bond sale during meetings in the U.S. and Europe. Isbank made the announcement to the Istanbul Stock Exchange after the market regulator approved a sale of 1.45 billion liras ($1.03 billion) of bonds by the bank. Isbank said the sale will be in dollars.

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.

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.

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, 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.

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: Tim Catts in New York at tcatts1@bloomberg.net.

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

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