Primary high-yield market
The U.S. high-yield bond market looks to be prepping for another active week of issuance. The calendar currently holds 10 tranches for pricing through March 19. Year-to-date volume was slated to total $118.1 billion at today’s close, for a 65% increase year-to-year.
In intraday business, Sensata Technologies BV, after initially proposing $500 million of eight-year notes for general corporate purposes, launched the offering with an upsize to $750 million at a 4% yield. Guidance had circulated in the 4% area. Proceeds will be used for general corporate purposes. Ratings are BB+/Ba3 and S&P Global Ratings today revised the outlook on the company to stable, from negative.
TriMas Corp. was eyeing a 4%-4.25% yield for its proposed $350 million offering of eight-year senior notes backing the refinancing of its 4.875% senior unsecured notes due 2025 and general corporate purposes. Assigned issue ratings are BB-/Ba3.
Among the current week’s debt raises, Triton Water Holdings Inc. has moved off the shadow calendar with an anticipated buyout bond offering. The deal includes $670 million of eight-year unsecured notes and $750 million of seven-year secured notes. Proceeds will be combined with those of a $1.8 billion term loan B to finance the acquisition of the Nestlé Waters North America Holdings business by One Rock and Metropoulos & Co. S&P Global Ratings has assigned a B rating to the secured bonds and a CCC+ rating to the unsecureds. Pricing is expected on March 17.
Trinseo SA is underway with marketing for $450 million of eight-year senior notes to support the purchase of Arkema's polymethyl methacrylate business. Trinseo is also shopping a $750 million incremental term loan B. The notes are rated B-/B2.
Ferrellgas Partners LP this week is expected to complete a $1.475 billion, two-part pitch of senior notes in connection with the company’s reorganization. Initial price thoughts are in the 5.5% area for five-year bonds and in the 6% area for an eight-year tranche. Proceeds of the notes, along with a new secured revolving credit facility and a $700 million preferred equity raise, will be used to refinance all existing bonds. Ratings are B-/B3.
Primary high-yield stories/links
High-yield forward calendar
Sensata Technologies launches upsized senior notes at 4%
TriMas circulates price guidance for $350M senior unsecured notes offering
Ferrellgas eyes $1.475B of senior notes in connection with restructuring
Trinseo sets call for $450M, 8-year unsecured bond offering
Triton Water launches $1.4B, 2-part bond offering
Secondary high-yield market
The high-yield secondary had another soft session today with sellers of high-quality duration bonds stepping back in to replace the opportunistic buyers that made a fleeting appearance last week. The CDX HY 35 closed today a whisker higher on the session, near 108.8, in the context of closes from 108-109 since March 1.
Bonds backing AMC Entertainment Holdings Inc. extended recent gains after the movie theater chain said it would have all 25 of its Los Angeles locations open by the end of the week. The borrower's bonds hit fresh pandemic-era highs on the news, with the 12% pay-in-kind second-lien secured notes due 2026 garnering around two points, to trade at 86.37, while a handful of tag-end trades pushed the 5.875% senior subordinated notes due 2026 up to 66.5 on the highs.
Airline bonds advanced amid optimism about an industrywide recovery. American Airlines Group Inc. bonds were among the most actively traded of the session, rising as much as 2 points, with the company's 3.75% notes due 2025 coming within three-quarters of a point of a March 1 pandemic-era high of 87.75.
Extended Stay America Inc. bonds wobbled after the company announced that Blackstone and Starwood Capital have agreed to buy the hotel operator for $6 billion in cash. Extended Stay's 4.625% senior unsecured notes due 2027 picked up half a point, to trade back above 102, after dipping to a post-slump low of 101.875 on March 9, while the 5.25% senior unsecured notes due 2025 were a fraction of a point lower on the day, at 102.125.
Friday’s four new-money offerings were a mixed bag, with two tranches of Pitney Bowes Inc. bonds and $310 million of triple-C rated secured first-lien notes for Shelf Drilling Holdings Ltd. all breaking to trades on either side of 99. While the latter closed out the session on the highs at 101.5, albeit on light volumes, the more active Pitney Bowes bonds never strayed far from break levels. A last-minute dollar-denominated addition to Ahlstrom-Munksjö Oyj's buyout-backing debt package also ended the day with a 101 handle, from initial trades at 100.5. The deal was issued via SPA Holdings 3 OY.
High-yield secondary stories/links
Airline bonds active on cash-burn curtailment, rise in leisure bookings
High-grade market
With market participants braced for at least one more blockbuster deal in the offing for the days ahead to back the FCC-facilitated land grab for 5G spectrum assets — post the $25 billion print for Verizon Communications Inc. last week — Monday’s session produced a solid slate of five deals, totaling $5.7 billion. The total does not include a $2.25 billion preferred placement for Charles Schwab Corp., under LCD criteria that exclude SAS and hybrid deals from the IG issuance totals.
Today’s docket included offerings for NextEra Energy Capital Holding ($2.5 billion), Anglo American Capital PLC ($1 billion), The Northwestern Mutual Life Insurance Co. Ltd. ($900 million), Tampa Electric Co. ($800 million) and CBRE Services Inc. ($500 million).
Meantime, the pipeline for blockbuster M&A prints bulged further today. Bonds backing Rogers Communications Inc. gapped wider after the company announced a debt-financed deal to acquire Shaw Communications Inc. for $26 billion, including $6 billion of Shaw debt. Rogers disclosed committed financing for the $19 billion cash portion, and the expected full debt financing for the deal is seen pushing leverage up two handles to more than 5x, which could result in the BBB+/Baa1/BBB+ company facing downgrades to the lowest rungs of the IG ratings ladder. Rogers’ 3.7% bonds due 2049 gapped 20 bps wider today, to the low T+140s, or roughly 35 bps above the tightest levels recorded less than a month ago, trade data show.
High-grade market stories/links
NextEra Energy Capital sets $2.5B of 2023 notes to pay down CP
Tampa Electric prints 2-part offering for refi purposes
Distressed news stories/links
Kenan Advantage upgraded by Moody's to B3 on extended maturities
Alpha Media disclosure statement nets approval; plan hearing set for April 1
Floatel International first-lien bondholders begin voting on restructuring
HighPoint Resources files Chapter 11 to implement Bonanza Creek merger
Ferrellgas eyes $1.475B of senior notes in connection with restructuring
