There were a handful of drive-by offerings in the high-yield market last week, as some issuers sought to take advantage of attractive funding options and raised cash on an ad-hoc basis. Other borrowers demonstrated the continuing bid for new paper by pricing their bonds within guidance and in most cases, experiencing moves higher on the break.
* One of the more notable transactions was a drive-by offering from Allied Waste Industries , which sold a two-part, $825 million refinancing deal consisting of senior subordinated notes (Ba3/BB-) through UBS Securities , Citigroup Global Markets , and J.P. Morgan Securities . Syndicate pros said that the high-yield market swallowed such a quick transaction indicates just how strong the demand for new bonds is, because these impromptu deals are generally only sold in the high-grade market, where investors are more familiar and comfortable with borrowers and need less time to evaluate credits. The Allied Waste transaction was priced on Wednesday, with the $425 million of 6 1/8% notes due in '14 going at 212 basis points over Treasuries and $400 million of 5 3 Ž 5 % notes be consistent of '11 pricing at 221 over. The bonds were up as much as half a point by late Thursday. They are not expected to trade much higher because the waste management company still has a lot of debt outstanding, according to one portfolio manager.
* Procter & Gamble sold $500 million of 5 1 Ž 2 % notes due in '34 that drew investor interest for its scarcity value. The Cincinnati household goods company is part of a rare breed of double-A corporates to come to market, which helped it attract interest from investors, according to Mike Snyder , a portfolio manager at Alliance Capital Management . He did not participate in the offering but managers for other accounts at Alliance did. The bonds were priced at 68 basis points over Treasuries on Wednesday and tightened a couple basis points a day later as investors scrambled to get a piece of the action. ABN AMRO , Deutsche Bank and Goldman Sachs co-managed the deal.
