PIPER JAFFRAY DEBT CAPITAL MARKETS UPDATE … · piper jaffray debt capital markets update ... $500.0 tbd tbd tbd na na sep-12 ba cdr retail lbo ... piper jaffray debt capital markets

PIPER JAFFRAY DEBT CAPITAL MARKETS UPDATE Page 1

Since 1895. Member SIPC and NYSE. © 2012 Piper Jaffray & Co., 800 Nicollet Mall, Minneapolis, Minnesota 55402-7020

Issue No. 227: October 1, 2012

Facility Amt. ($MM)

Middle Market

LIBOR Floor Spread OID Date Sponsor Company Focus Lead Arranger

Senior Lev. Purpose

Total Lev.

The Piper Jaffray Debt Capital Markets Update is published weekly and provides a summary and analysis of debt capital markets activity.

To subscribe/unsubscribe, visit www.piperjaffray.com/dcmupdate

Source: Piper Jaffray, S&P LCD, Bloomberg

MARKET COMMENTARY

New Leveraged Loans – In the Market

The high-yield market priced 27 bonds last week, bringing year-to-date issuance to more than $283 billion. The middle market launched 11 new loan transactions last week for Airborne Systems, Cornerstone Healthcare, David’s Bridal, Northfield Park Assoc., Pro Mach, Rocket Software, Roofing Supply Group, Tank Intermediate, Telx Group, TriNet Group and Wall Street Systems.

The secondary high-yield market was down this week, closing at 103.53% of par to yield 7.03%.

Loan and high-yield funds saw $451 million in inflows and $5 million in outflows, respectively. Year-to-date, loan funds have seen $3.4 billion in inflows, while inflows to high-yield funds total $25.4 billion.

Date Middle Market Facility Amt.

($MM)

LIBOR Floor Spread OID Sponsor Company Focus Lead Arranger

Senior Lev. Purpose

Total Lev.

Source: Piper Jaffray, S&P LCD, CIQ

Airborne Systems (TLB) $130.0 1.25% L + 500 TBD NA NA Sep-12 SunTrust Metalmark Capital Aerospace Dividend Racap

Airborne Systems (RC) $25.0 TBD TBD TBD NA NA Sep-12 SunTrust Metalmark Capital Aerospace Dividend Racap

Cornerstone Healthcare (TLB) $150.0 1.25% L + 550 $99.0 NA 3.2x Sep-12 Goldman Highland Capital Healthcare Refinancing

David's Bridal (TLB) $500.0 TBD TBD TBD NA NA Sep-12 BA CDR Retail LBO

Northfield Park Assoc. (TLB) $150.0 1.25% L + 775 $98.0 NA NA Sep-12 CS Not Sponsored Entertainment Project Finance

Pro Mach (TLB) $245.0 1.25% L + 425 $99.0 NA NA Sep-12 Barclays Jordan Company Manufacturing Refinancing

Rocket Software (1st) $300.0 1.25% L + 450 $99.5 3.0x 3.9x Sep-12 CS Court Square Electronics Refinancing

Roofing Supply Group (TLB) $315.0 1.25% L + 375 $99.0 3.1x 5.3x Sep-12 DB CDR Building Materials Refinancing

Tank Intermediate (TLB) $349.6 1.25% L + 425 TBD NA NA Sep-12 GECC Leonard Green Manufacturing Refinancing

Telx Group (TLB) $362.7 1.25% L + 500 $99.8 NA NA Sep-12 MS ABRY Partners Telecom Corp Purpose

Telx Group (RC) $10.0 TBD TBD TBD NA NA Sep-12 MS ABRY Partners Telecom Refinancing

TriNet Group (TLA) $125.0 TBD TBD TBD NA NA Sep-12 Key Bank General Atlantic Services & Leasing Acquisition

TriNet Group (TLB) $175.0 TBD TBD TBD NA NA Sep-12 Key Bank General Atlantic Services & Leasing Acquisition

TriNet Group (RC) $50.0 TBD TBD TBD NA NA Sep-12 Key Bank General Atlantic Services & Leasing Acquisition

Wall Street Systems (1st) $335.0 1.25% L + 475 $98.5 NA NA Sep-12 JPMChase TA Associates Electronics Dividend Racap

Wall Street Systems (2nd) $140.0 1.25% L + 825 $98.0 NA NA Sep-12 JPMChase TA Associates Electronics Dividend Racap

Wall Street Systems (RC) $30.0 TBD TBD TBD NA NA Sep-12 JPMChase TA Associates Electronics Dividend Racap

http://www.piperjaffray.com/dcmupdate




Facility Amt. ($MM)

Middle Market

LIBOR Floor Spread OID Date Sponsor Company Focus Lead Arranger

Senior Lev. Purpose

Total Lev. New Leveraged Loans – In the Market

Date Large Cap Facility Amt.

($MM)

LIBOR Floor OID Sponsor Company Focus Lead Arranger

Senior Lev. Purpose

Total Lev.

Source: Piper Jaffray, S&P LCD, CIQ

Current Previous

Week (bps) Previous

Year Benchmark (bps)

Benchmark Yields

2 yr UST 0.23% 0.26% (2.8) 0.23% (0.1)

5 yr UST 0.63% 0.67% (4.5) 0.85% (22.6)

10 yr UST 1.63% 1.75% (11.9) 1.76% (12.3)

30 yr UST 2.82% 2.94% (12.0) 2.72% 9.8

3M LIBOR 0.36% 0.37% (1.1) 0.38% (1.9)Source: Bloomberg

Allison Transmission (TLB) $300.0 1.00% L + 325 $99.9 NA NA Sep-12 BA Carlyle Group Automotive Refinancing

Brand Energy & Infra. (TLB) $700.0 1.25% L + 500 $99.0 NA NA Sep-12 UBS First Reserve Corp Building Materials Refinancing

Brand Energy & Infra. (RC) $75.0 TBD TBD TBD NA NA Sep-12 UBS First Reserve Corp Building Materials Refinancing

Calpine Corp (TLB) $615.0 1.25% L + 325 $99.0 NA NA Sep-12 MS Not Sponsored Utilities Refinancing

Centerplate (TLB) $267.0 1.25% L + 500 $99.0 NA NA Sep-12 GECC Olympus Partners Restaurants LBO

Centerplate (RC) $75.0 TBD TBD TBD NA NA Sep-12 GECC Olympus Partners Restaurants LBO

Contour Global Power (TLB) $350.0 1.50% L + 850 $97.5 NA NA Sep-12 CS Not Sponsored Utilities Acquisition

DAE Aviation (TLB) $520.0 1.25% L + 500 $98.0 4.0x 6.3x Sep-12 Barclays Dubai International Aerospace Refinancing

DAE Aviation (RC) $150.0 TBD TBD TBD 4.0x 6.3x Sep-12 Barclays Dubai International Aerospace Refinancing

GCA Services Group (1st) $315.0 1.25% L + 425 $99.0 3.8x 5.8x Sep-12 CS Blackstone Group Services & Leasing LBO

GCA Services Group (2nd) $150.0 1.25% L + 850 $98.5 3.8x 5.8x Sep-12 CS Blackstone Group Services & Leasing LBO

GCA Services Group (RC) $60.0 TBD TBD TBD 3.8x 5.8x Sep-12 CS Blackstone Group Services & Leasing LBO

Gray Television (TLB) $575.0 1.00% L + 400 $99.0 NA NA Sep-12 Wells Not Sponsored TV Refinancing

Gray Television (RC) $40.0 TBD TBD TBD NA NA Sep-12 Wells Not Sponsored TV Refinancing

Harron Communications (TLB) $250.0 1.25% L + 375 $100.0 NA NA Sep-12 SunTrust Boston Ventures Cable Refinancing

Hertz (TLB) $750.0 1.00% L + 275 $99.0 3.7x 4.0x Sep-12 DB CDR Services & Leasing Acquisition

Leap Wireless (TLB) $400.0 1.25% L + 425 $99.0 NA NA Sep-12 DB Not Sponsored Telecom Refinancing

Level 3 Communications (TLB) $1,200.0 1.50% L + 325 $100.0 NA NA Sep-12 BA Not Sponsored Telecom Refinancing

National Mentor (TLB) $550.0 1.25% L + 450 TBD NA NA Sep-12 UBS Vestar Capital Not for Profit Refinancing

National Mentor (RC) $75.0 TBD TBD TBD NA NA Sep-12 UBS Vestar Capital Not for Profit Refinancing

Rexnord (TLB) $950.0 1.00% L + 400 TBD NA NA Sep-12 CS Apollo Manufacturing Refinancing

Royalty Pharma Finance (TLB) $840.1 0.75% L + 275 $100.0 NA NA Sep-12 BA Not Sponsored Services & Leasing Refinancing

Royalty Pharma Finance (TLC) $1,878.0 0.75% L + 300 $100.0 NA NA Sep-12 BA Not Sponsored Services & Leasing Refinancing

Savers (TLC) $715.0 1.25% L + 375 $99.5 NA NA Sep-12 Goldman Leonard Green Retail Refinancing

Savers (RC) $75.0 TBD TBD TBD NA NA Sep-12 Goldman Leonard Green Retail Refinancing

SGS (TLB) $375.0 1.25% L + 425 $99.0 3.8x 5.9x Sep-12 CS Onex Publishing LBO

SGS (RC) $75.0 TBD TBD TBD 3.8x 5.9x Sep-12 CS Onex Publishing LBO

Terex (TLB) $452.8 1.00% L + 350 $100.0 NA NA Sep-12 CS Not Sponsored Manufacturing Refinancing

Univar NV (TLB) $550.0 1.50% L + 350 $99.0 NA NA Sep-12 BA CDR Chemicals Refinancing

Valeant Pharmaceuticals (TLB) $1,300.0 1.00% L + 325 $99.5 NA NA Sep-12 JPMChase Not Sponsored Healthcare Refinancing

Zayo Group (TLB) $1,620.0 1.25% L + 400 $100.0 NA NA Sep-12 MS Columbia Capital Telecom Refinancing

Zayo Group (RC) $250.0 TBD TBD TBD NA NA Sep-12 MS Columbia Capital Telecom Refinancing

Spread




Weekly Corporate New Issue Activity (1)

(1)Bold transactions denote Piper Jaffray underwriting participation. Does not include Supranational, Foreign Denominations, Sovereign, Special Purpose Entities or PJC issues. (2)Includes all split-rated issues Source: Piper Jaffray, Bloomberg

Investment Grade(2) – Week of 9/24/2012

Moody’s S&P Industry Amt

($MM) Company Maturity Transaction Type Spread Yield Coupon Ratings

KFW Aaa AAA Financial $3,000 10/4/22 + 48 2.000% 2.1% Sr. Unsecured

Network Rail Aaa N/A Diversified $1,250 10/3/17 + 24 0.750% 0.9% Sr. Unsecured

Canadian Imperial Bank Aa2 A+ Financial $1,000 10/1/15 + 57 0.900% 0.9% Sr. Unsecured

United Parcel Service Aa3 A+ Industrial $1,000 10/1/22 + 75 2.450% 2.5% Sr. Unsecured

United Parcel Service Aa3 A+ Industrial $375 10/1/17 + 50 1.125% 1.2% Sr. Unsecured

United Parcel Service Aa3 A+ Industrial $375 10/1/42 + 80 3.625% 3.7% Sr. Unsecured

Industrial Bank of Korea Aa3 N/A Financial $300 10/5/15 + 115 1.375% 1.5% Sr. Unsecured

Credit Agricole A2 A Financial $1,000 10/1/17 + 235 3.000% 3.0% Sr. Unsecured

WEA Finance A2 A- Financial $500 10/3/22 + 180 3.375% 3.5% Sr. Unsecured

Swedbank A2 A+ Financial $1,000 9/29/17 + 150 2.125% 2.2% Sr. Unsecured

Commonwealth Edison A3 A- Utilities $350 10/1/42 + 92 3.800% 3.8% Sr. Unsecured

MetLife A3 A- Financial $500 12/15/17 + 105 1.756% 1.7% Sr. Unsecured

MetLife A3 A- Financial $500 12/15/22 + 135 3.048% 3.0% Sr. Unsecured

BBVA Bancomer A3 N/A Financial $1,500 9/30/22 + 527 6.750% 6.8% Sr. Unsecured

Agrium Baa2 BBB Basic Materials $500 10/1/22 + 145 3.150% 3.2% Sr. Unsecured

NBCUniversal Media Baa2 BBB+ Communications $1,000 1/15/23 + 125 2.875% 2.9% Sr. Unsecured

NBCUniversal Media Baa2 BBB+ Communications $1,000 1/15/43 + 165 4.450% 4.5% Sr. Unsecured

Newcrest Baa2 BBB+ Basic Materials $750 10/1/22 + 255 4.200% 4.3% Sr. Unsecured

Newcrest Baa2 BBB+ Basic Materials $500 11/15/41 + 280 5.750% 5.8% Sr. Unsecured

Rbs Citizens Fin Grp N/A BBB+ Financial $350 9/28/22 + 250 4.150% 4.2% Sr. Unsecured

Hyundai Capital America Baa2 N/A Financial $500 10/2/15 + 130 1.625% 1.6% Sr. Unsecured

Hyundai Capital America Baa2 N/A Financial $500 10/2/17 + 150 2.125% 2.2% Sr. Unsecured

ENA Norte Trust Baa3 BBB Financial $600 4/25/23 + 391 4.950% 5.0% Sr. Unsecured

Watson Pharmaceuticals Baa3 BBB Pharmaceuticals $1,700 10/1/22 + 170 3.250% 3.3% Sr. Unsecured

Watson Pharmaceuticals Baa3 BBB Pharmaceuticals $1,200 10/1/17 + 135 1.875% 2.0% Sr. Unsecured

Penske Truck Leasing Baa3 BBB- Industrial $1,000 3/15/16 + 220 2.500% 2.5% Sr. Unsecured

Penske Truck Leasing Baa3 BBB- Industrial $500 3/15/18 + 275 3.375% 3.4% Sr. Unsecured

Global Bank Corporation Baa3 N/A Financial $200 10/5/17 + 439 4.750% 5.0% Sr. Unsecured




Weekly Corporate New Issue Activity (1)

(1)Bold transactions denote Piper Jaffray underwriting participation. Does not include Supranational, Foreign Denominations, Sovereign, Special Purpose Entities or PJC issues. Source: Piper Jaffray, Bloomberg

High-Yield – Week of 9/24/2012

$MM # $MM # $MM # $MM #

Total Bond Volume Week of 9/24/2012 2012 YTD 2011 YTD YOY Change

Investment Grade $22,950 28 $773,112 992 $665,758 856 +16.1% +15.9%

High-Yield $12,281 27 $283,327 515 $235,070 489 +20.5% +5.3%

Total Corporates $35,231 55 $1,056,439 1,507 $900,828 1,345 +17.3% +12.0%

Moody’s S&P Industry Company Maturity Transaction Type Spread Yield Coupon Amt

($MM) Ratings

Banco ABC Brasil Ba1 N/A Financial $400 4/8/20 + 572 7.875% 8.2% Sr. Unsecured

Frontier Communications Ba2 BB Communications $850 1/15/23 + 488 7.125% 7.1% Sr. Unsecured

Lender Process Services Ba2 BB+ Data Processing $600 4/15/23 + 412 5.750% 5.8% Sr. Unsecured

Bristow Group Inc Ba3 BB Industrial $450 10/15/22 + 471 6.250% 6.3% Sr. Unsecured

Nufarm Australia Ba3 BB- Basic Materials $325 10/15/19 + 535 6.375% 6.4% Sr. Unsecured

Regency Energy Partners B1 BB Energy $700 4/15/23 + 386 5.500% 5.5% Sr. Unsecured

Elan Finance B1 BB- Asset Management $600 10/15/19 + 517 6.250% 6.3% Sr. Unsecured

TW Telecom B1 BB- Communications $480 10/1/22 + 373 5.375% 5.4% Sr. Unsecured

ViaSat B1 N/A Communications $300 6/15/20 + 551 6.875% 6.3% Sr. Unsecured

Agrokor B2 B Packaged Foods $300 2/1/20 + 780 8.875% 8.9% Sr. Unsecured

Atlas Pipeline B2 B Energy $325 10/1/20 + 600 6.625% 6.6% Sr. Unsecured

Sinclair Television B2 B Communications $500 10/1/22 + 449 6.125% 6.1% Sr. Unsecured

Alpha Natural Resources B2 B+ Energy $500 4/15/18 + 939 9.750% 10.0% Sr. Unsecured

Wolverine World Wide B2 N/A Footwear $375 10/15/20 + 485 6.125% 6.1% Sr. Unsecured

Breitburn Energy B3 B Energy $450 4/15/22 + 603 7.875% 8.0% Sr. Unsecured

International Wire Group B3 B Industrial $250 10/15/17 + 788 8.500% 8.5% Sr. Secured

PDC Energy B3 B- Energy $500 10/15/22 + 614 7.750% 7.8% Sr. Unsecured

International Wire Group B3 N/A Industrial $250 10/15/17 + 788 8.500% 8.5% Sr. Secured

CDRT Caa1 B- Distributors $450 10/1/17 + 936 FRN FRN Sr. Unsecured

ADS Waste Caa1 N/A Industrial $550 10/1/20 + 700 8.250% 8.3% Sr. Unsecured

Casella Waste Systems Caa1 N/A Industrial $125 2/15/19 + 743 7.750% 8.1% Sr. Unsecured

Gray Television Caa2 CCC+ Communications $300 10/1/20 + 634 7.500% 7.6% Sr. Unsecured

Ryerson Caa2 CCC+ Basic Materials $600 10/15/17 + 837 9.000% 9.0% Sr. Secured

Ply Gem Industries Caa3 CCC Industrial $160 4/15/17 + 872 9.375% 9.4% Sr. Unsecured

Ryerson Caa3 CCC Basic Materials $300 10/15/18 + 1,042 11.250% 11.3% Sr. Unsecured

Phoenix 2012 N/A N/A Financial $141 7/3/24 + 56 1.607% 1.6% Sr. Unsecured

StadsHypotek N/A N/A Financial $1,500 10/2/19 + 86 1.875% 1.9% Sr. Unsecured




Information contained in this publication is based on data obtained from sources we deem to be reliable, however, it is not guaranteed as to accuracy and does not purport to be complete. Nothing contained in this publication is intended to be a recommendation of a specific security or company nor is any of the information contained herein intended to constitute an analysis of any company or security reasonably sufficient to form the basis for any investment decision. PIPER JAFFRAY HEADQUARTERS ARE LOCATED IN MINNEAPOLIS, MINNESOTA, WITH OFFICES ACROSS THE U.S. AND IN LONDON AND HONG KONG Piper Jaffray Companies (NYSE: PJC) is a leading, international middle market investment bank and institutional securities firm. Securities brokerage and investment banking services are offered in the United States through Piper Jaffray & Co., member SIPC and NYSE; in Europe through Piper Jaffray Ltd, authorized and regulated by the Financial Services Authority; and in Hong Kong through Piper Jaffray Asia Limited, Piper Jaffray Asia Securities Limited, and Piper Jaffray Asia Futures Limited, all of which are registered with the Hong Kong Securities and Futures Commission. Asset management products and services are offered through three separate investment advisory affiliates registered with the U.S. Securities and Exchange Commission: Fiduciary Asset Management, LLC; Piper Jaffray Investment Management LLC; and Piper Jaffray Private Capital, LLC.

© 2012 Piper Jaffray Companies 800 Nicollet Mall, Minneapolis, Minnesota 55402-1702 Additional information is available upon request. www.piperjaffray.com

James Chiarelli Principal 312 267-5122 [email protected]

Molly Soderberg Analyst 612 303-6749 [email protected]

DEBT CAPITAL MARKETS CONTACTS


HIGH-YIELD INDEX SPREADS

Source: Bloomberg

Moody’s Rating: Ba2 Moody’s Rating: B2

Source: Bloomberg

Chad Schwarze Analyst 612 303-6740 [email protected]


LOAN & BOND VOLUME

Source: Bloomberg

Leveraged Loan & HY Volume Middle Market Loan Volume

Source: S&P LCD

Jean Hosty Associate 312 267-5117 [email protected]

Sachin Garg Associate 312 267-5115 [email protected]

Low: +3639/20/2012

High: +69610/4/2011

+ 300

+ 400

+ 500

+ 600

+ 700

Sep

-11

Oct

-11

No

v-1

1

Dec

-11

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Ap

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-12

Jun

-12

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g-1

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Current: +393

Low: +5649/14/2012

High: +92110/4/2011

+ 400

+ 500

+ 600

+ 700

+ 800

+ 900

+ 1,000 S

ep-1

1

Oct

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-11

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Feb

-12

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Ap

r-1

2

May

-12

Jun

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Current:+592

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High-Yield Bonds

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http://www.piperjaffray.com/

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PIPER JAFFRAY DEBT CAPITAL MARKETS UPDATE … · piper jaffray debt capital markets update ... $500.0 tbd tbd tbd na na sep-12 ba cdr retail lbo ... piper jaffray debt capital markets