The new issue calendar was a little slower last week, although plenty of deals are in the works for this week. Power has shifted more to the investors, who are looking to be compensated. Other than an offering from Charter Communications, most deals were small but were still getting executed.
*Premcor Refining, an oil refiner in Old Greenwich, Conn., sold two offerings of senior debt--$200 million in 6 3/4% notes of '14 (Ba3/BB-) and $200 million in 6 1/8% notes of '11 (Ba3/BB-). One salesman said initial price talk for the longer class was 6-6 1/4% but investors did not respond well and it was revised to 6 3/8% and finally to 6 3/4%. It was also downsized from $250 million. Premcor will use the proceeds from the sale to purchase a refining complex in Delaware. A high yield portfolio manager said investors are positive with the new management team which in turn could help bring the high yield status of the company up to investment grade this year. The new Premcor notes were trading at par after the deal was priced last Tuesday. Credit Suisse First Boston, Morgan Stanley and Citigroup Global Markets underwrote the deal.
*iPCS Escrow Co., an affiliate of Sprint Inc., was preparing a $180 million offering of senior unsecured notes due in 2012. Some investors questioned how well the deal would go, which was meant to price last Friday. Sabur Moini, portfolio manager and senior high-yield strategist at Payden & Rygel Investment Management in Los Angeles, said price talk was initially ranging around 10 3/4% before being revised to 11 1/2%, which meant the deal didn't have the momentum that lead underwriter Credit Suisse First Boston wanted. It also could mean that the deal will go reasonably since there are not many outstanding deals with similar coupons, he said. Moini added there have been initial positive trends for the company post-bankruptcy and affiliates will make more money with the restructuring of the affiliate agreements with Sprint. This comes after iPCS filed for Chapter 11 bankruptcy protection last year and recently announced a legal settlement with Sprint PCS.