Just one deal made it through rough market conditions unscathed: Bermuda-based television broadcasting group Central European Media Enterprise actually upsized its bond by €20 million, offering €245 million fixed rate and €125 floating rate notes. "There is a lot of demand out there for good stories in the single- and double-B range," noted an official at J.P. Morgan, underwriter on CME together with LehmanBrothers and ING.
In contrast, investors were more wary of the triple-C paper offered by iesy and Cell C. A Citi official said iesy officials had hoped to lock in a coupon of less than 10% but the deal could only get sold in the high 10% area. Investors apparently wanted a concession to iesy's outstanding bonds, which were trading in the 10.25-10.5% range last week.
As for Cell C's offering, which was scheduled to be priced on Friday, some European fund managers saw it as too risky. "It's awfully early in the life-cycle of the company to be taking out cash, given it isn't even cash flow positive yet," observed one London-based fund manager. A Citi high-yield official confirmed discussions are underway to sell a subordinated tranche in dollars while keeping the senior tranche in euros but would not discuss the respective sizes of the two tranches.