Lamar Advertising, Hilcorp price; Urban One on deck; Realogy soars; Crestwood active

By Abigail W. Adams and Paul A. Harris

Portland, Me., Jan. 7 – Two issuers raised a total of $1.75 billion in a combined three tranches of junk on Thursday.

Hilcorp Energy I, LP priced an upsized $1.2 billion two-tranche offering and Lamar Advertising Co. priced a $550 million issue of 10-year senior notes (B1/BB-).

One deal remains on the forward calendar.

Urban One, Inc. is slated to price an $825 million offering of seven-year senior secured notes on Friday.

Meanwhile, the secondary space was firm on Thursday with the cash bond market up about ¼ point as equities broached fresh heights and crude oil futures extended their rally following the successful confirmation of president-elect Joseph Biden’s victory.

New paper remained in focus with recent deals continuing to perform well.

Realogy Holdings Corp.’s 5¾% senior notes due 2029 (Caa1/B-) traded up to a 102-handle in high-volume activity.

While Crestwood Midstream Partners LP’s 6% senior notes due 2028 (B1/BB-) did not reach the same heights, the notes were trading at a premium to their issue price.

Outside of recent issues, United States Steel Corp.’s 6¼% senior notes due 2026 were active with the notes on the rise due to the political victory of the Democrats.

Thursday’s primary

Two issuers raised a total of $1.75 billion in a combined three tranches of junk on Thursday.

Executions were ultra-tight, with two tranches coming inside of talk and the other coming tight to talk.

Hilcorp Energy managed to both upsize its two-part offering of senior notes and bring both tranches inside of talk.

The upsized $1.2 billion of notes (Ba3/BB-) (from $1 billion) came in an upsized $600 million tranche (from $500 million) of eight-year notes, which priced at par to yield 5¾%. The yield printed 12.5 basis points inside of price talk in the 6% area.

The deal also included an upsized $600 million tranche (from $500 million) of 10-year notes which priced at par to yield 6%. The yield printed 12.5 bps inside of yield talk in the 6¼% area.

Elsewhere, Lamar Advertising priced a $550 million issue of 10-year senior notes (B1/BB-) at par to yield 3 5/8%.

The yield printed at the tight end of yield talk in the 3¾% area. Initial guidance was in the 3¾% to 4% area.

On deck for Friday is Urban One with an $825 million offering of seven-year senior secured notes.

Pending official price talk, initial guidance is in the 8% area.

Realogy trades up

Realogy’s 5¾% senior notes due 2029 were in focus on Thursday with the demand seen during bookbuilding following the notes into the aftermarket.

The notes traded up to a 102-handle and were changing hands in the 102 to 102¼ context heading into the market close, a source said.

There was more than $100 million of the bonds on the tape during Thursday’s session.

In a heavily oversubscribed offering, Realogy priced an upsized $600 million, from $400 million, issue of the 5¾% notes at par.

Pricing came at the tight end of the 5¾% to 5 7/8% yield talk, which tightened from earlier talk in the 6% area.

The deal was heard to be as much as 8x oversubscribed, a source said.

Crestwood active

Crestwood Midstream’s newly priced 6% senior notes due 2028 were putting in a solid performance in the secondary space.

While the notes remained on a par-handle, they were trading at a premium to their issue price.

The notes stood poised to close the day at par 5/8, according to a market source.

There was more than $87 million of the bonds on the tape during Thursday’s session.

Crestwood priced a $700 million issue of the 6% notes at par on Wednesday.

Pricing came at the tight end of the 6% to 6¼% yield talk.

United States Steel gains

While new deals continued to dominate the tape, United States Steel’s 6¼% senior notes due 2026 were posting gains as a result of the Democrat’s political victory.

The 6¼% senior notes gained 1¾ point. They were changing hands in the 96 to 96 3/8 context heading into the market close.

There was more than $33 million bonds on the tape during Thursday’s session.

It was the highest level for the notes since 2018, according to Trace data.

U.S. Steel’s capital structure jumped following the Democrats’ victory in Georgia, which gave the party control of the Senate.

The victory increases the odds of Democrats pushing through their legislative agenda, which includes infrastructure spending.

Infrastructure spending will benefit the beleaguered steel company.

Indexes gain

The KDP High Yield Daily index gained 11 points to close Thursday at 69.13 with the yield now 4.23%.

The index gained 1 point on Wednesday and was up 2 points on Tuesday.

The ICE BofAML US High Yield index moved further into territory on Wednesday. The index was up 7.3 bps with the year-to-date return now 0.172. The index was up 10.7 bps on Wednesday and 1.9 bps on Tuesday.

The CDX High Yield 30 index rose 39 bps to close Thursday at 109.25.

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