The new issue calendar was described as heavy by some investors, with issuers trying to price into weakness. Although many investors said they were focusing more on the secondary market, most new deals performed well. Here are some noteworthy transactions.
* Emmis Operating Company, a radio and television station operator and a subsidiary of media company Emmis Communciations, sold $375 million in 6 7/8% notes of '12. The senior subordinated notes are rated B2/B-. Proceeds from the sale will be used to repay existing debt under an existing credit facility and to repurchase or redeem all outstanding senior subordinated notes.
Ho Wang, portfolio manager at Muzinich & Co., who participated in the deal, said investors like the company because it has very predictable cash flows, even though yields in that industry are relatively low. He noted that most buy it as a core holding. Another investor who didn't participate said, however, that there wasn't enough juice in the deal. Initial price talk of 6 3/4% had to be amended to attract more investors, he added. The deal was trading at par in the secondary market, he noted, which "isn't wonderful," after pricing at par earlier in the week. Goldman Sachs underwrote the deal.
* Labranche & Co., the biggest dealer on the New York Stock Exchange, plans to issue $460 million in five- and eight-year senior notes. One salesman said there was no price talk as of last Thursday at the time of the road show, and it should price this week. The new issue is being used to buy back the company's existing bonds: the 12% of '07 and the 9 1/2% of '04. He noted that a lot of accounts that own the 12% notes would like a deal to get done, as the 12% notes will be tendered at 120, which he said is really high. If the deal doesn't get done, he added, the '12s would drop significantly in price. Credit Suisse First Boston is lead underwriter. The debt is rated Ba1/B.