New issuance was heavy, with many companies coming to market to take advantage while rates remain low, which given recent economic data may not be for as long as economists had been predicting. Investor demand was high and many deals were oversubscribed.
* Midwest Generation, a power-generation unit of Edison International, is seeking to sell $700 million of second priority senior secured notes that are expected to price early this week. One investor estimated the notes will be priced with a coupon of 7.75-8%. He said the deal is noteworthy because it is being underwritten by Credit Suisse First Boston, even though analysts from CSFB have been negative in the past on the outstanding debt of Edison Mission Resources, which is also part of Edison International. Edison Mission's 13.5% notes of '08, sold in 2001, traded in the 20s a couple of years ago and have since rebounded to around 107. CSFB's current recommendation on the bonds could not be determined and Mitch Spiegel, a power analyst at CSFB, declined to comment.
* International Steel Group, the largest steelmaker by capacity in North America, sold $600 million of senior 10-year notes in a private placement offering underwritten by Goldman Sachs. The sale caught investors' attention because, although the bonds are of the junk variety, the deal's structure contains investment grade-like covenants, according to one trader. The deal was priced with a coupon of 6.5%. The trader added that the company is a roll-up of a bunch of steel plants and is part of a sector that performed well during the last four to five months. The notes are rated by Moody's Investors Service (Ba3) and Standard & Poor's (BB).
