Allied Seeks $250 Million In Dollars and Euros


Transportation and distribution company Allied Pickfords was creating a stir last week as it was said to be putting the final touches on a junk bond offering that will be denominated in dollars and euros.

In fact, the issuer is part of a growing trend in that respect (see story above) as an increasing number of issuers are tapping both markets in an attempt to diversify their investor base.

Allied's offering, which was not yet rated as of last week, was said to be worth $250 million, although the breakdown between dollars and euros was unavailable at press time. It is expected to hit the market officially this week or next, according to sources familiar with the firm.

The underwriters are Chase Securities and Bank Of America Securities, but neither could be reached for comment.

Market observers said last week that things are tough right now and even the large, known issuers are having to pony up some extra return on the coupon to get their deals priced.

"Regardless of where [the management] expected it to come a few weeks ago, they can be sure it will be wider now," said one analyst who knew about the company's debt transaction.

Deals of the week

There are indeed deals still lingering on the forward calendar, but there are none expected to price next week. Those that have announced issuance plans for the near future include the following: Fitness Holdings, which is expected to come with a $120 million offering structured as senior subordinated notes via Chase Securities; Buhrmann U.S., which is expected to hit the market with a $350 million issue via Deutsche Banc Alex. Brown; Millennium Digital, which is reportedly looking to raise $150 million in the high yield market, probably in two tranches, via CIBC World Markets; and Trianon Industries, which market watchers say is coming with a $250 million via Banc One Capital.

Norwood Promotional Products was said to have postponed a $250 million issue and Citation Corp. is reconsidering its refinancing plans after reportedly failing to entice enough investors.

There were still relatively few deals that priced, although in contrast to some previous weeks, there was at least some activity. And of the few deals that priced last week, most of them were in the BB category, or even split rated, investors said.

Midwest Energy priced a deal in two tranches worth a combined $475 million. One piece, with a 9.375% coupon, priced at 300 basis points over Treasurys, while the smaller piece, worth $225 million, priced with a spread of 262 basis points over the curve.

The offering, which carried a high yield rating of BB+ from Standard & Poor's and an investment-grade rating of Baa2 from Moody's Investors Service, was underwritten by Lehman Brothers.

Primus Telecommunications priced at par its $250 million deal, also via Lehman Brothers, to yield 670 basis points over Treasurys. The coupon was 12.75%.

Sea Containers, a ferry operator, sold $115 million of junk bonds last week that carried a rating of Ba3 from Moody's Investors Service and BB- from Standard & Poor's.

The offering, managed by Lazard Freres, featured a 10.75% coupon and priced at 98.805. The size of the deal was reduced nearly one-fourth, an investor said, to the final $115 million size.