Chiquita Brands International Inc. could peel some debt off its $350 million shelf registration as early as today, high-yield market sources say.
The company appears to be considering a senior note offering of between $200 million and $300 million with a 10-to-12-year maturity. By one account the estimated coupon rate was between 9 1/4 to 9 1/2%. Another source descibed that as "propably a little rich."
Chiquita seen "an opportunity to raise funds at favorable rates," a high-yield source said. Proceeds will go toward the company's "aggressive" capital investment plan, he said.
Another high-yield company likely to jump in this week is Mitchell Energy & Development Corp., which may offer about $200 million of its $400 million shelf. Sources earlier said Stone Container Corp. may offer its $240 million deal on Nov. 25 or 26.
Following close of business Tuesday, Wheeling-Pittsburgh Corp. priced its $175 million nin-year offering at 12 1/4%. The deal was increased from $150 million earlier.
"There was very strong demand for the paper," a company source said.
Elsewhere in high-yield, enough Carolco Pictures Inc. 14% noteholders waived some provisions of the notes' indenture to help the company avoid a possible violation of consolidated cash flow ratio that the company must maintain under the indenture, a company spokesman confirmed.
The consenting note holders represent about $56,784,000 principal amount, or 72.6% of the $78,193,000 of the notes due 1993 outstanding, much more than the majority needed to approve the amendment, he said. Carolco's offer to note holders expired at the close of business on Tuesday.
In return for their consent, noteholders consenting before the deadline will get a cash payment of $10 per $1,000 note. Based on the consenting note holders, those cash payments will total $567,840.
The waiver allows the company to exclude from calculation of consolidated cash flow an increase in amortization of film costs of $15 million for the quarter ended June 30, 1991, and another $15 million in amortization of film, television, and video costs, residuals, participations, and costs of goods sold for the quarter ended Sept. 30, 1991, in order to avoid violation of the cash-flow requirement, a company release says.
The waivers' approval improves Carolco's ability to finance future film production activities and enhances its financial flexibility, the release says. Carolco plans to use proceeds from a $65 million private placement to help redeem those 14% notes.
Also yesterday, Carolco reported significant third-quarter losses.
Carolco owns 53% of LIVE Entertainment Inc., which recently sold off Lieberman Enterprises Inc. in a sale that failed to go as well as expected, the spokesman said. The poor sale hurt Carolco's third quarter earnings, he said.
In secondary high-yield trading, higher-grade names ended mixed, while lesser names lost a point to 1 1/2 points. The high-grade market traded off about 1/8 point in the morning on October housing start news, but the long-end rebounded to finish slightly higher than Tuesday's close. Both the short and intermediate sectors ended unchanged.
Yesterday's issuers included Montana Power Co., which issued a three-part first mortgage bond deal yesterday totaling $160 million. Moody's Investors Service rates the bonds Baal, while Standard & Poor's Corp. rates them BBB-plus. Goldman, Sachs & Co. lead managed the offering.
The first tranche consisted of $55 million of 7.7% bonds due 1999. The noncallable bonds were priced at par to yield 70 basis points over comparable Treasuries. The second piece consisted of $55 million of 8.250% bonds due 2007. The noncallable bonds were priced at 99.932 to yield 8.26% or 87.5 basis points over comparable Treasuries. The third tranche consisted of $50 million of 8.950% bonds due 2022. Noncallable for 10 years, those bonds were priced at 99.948 to yield 8.95% or 103 basis points over comparable Treasuries.
Heller Financial issued $150 million of variable-priced floating rate notes due 1992. Priced initially at par, the notes float daily at primve minus 240 and pay monthly. The coupon will be reset monthly. Moody's rates the notes A2, while Standard & Poor's rates them A-plus. Lehman Brothers sole managed the offering.
Illinois Tool Works issued $125 million of 7.5% notes due 1998. The noncallable notes were priced at 99.892 to yield 7.52% or 53 basis points over seven-year Treasuries. Moody's rates the notes A1, while Standard & Poor's rates them AA-minus. First Boston lead managed the offering.
Federal Farm Credit Banks issued $105 million of 6.7% notes due 1996. Noncallable for a year, the notes were priced at par to yield 15 basis points over comparable Treasuries. Lehman sole managed the transaction.
Great Western Financial issued $100 million of 8.625% senior notes due 1998. The noncallable notes were priced at 99.87 to yield 165 basis points over comparble Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it A-minus. Merrill Lynch lead managed the offering.
