Helios prices; Encino under pressure; Ahead DB in demand; StoneMor, Wheel Pros at a premium

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 26 – The domestic high-yield primary market saw one deal price during Monday’s session.

Helios Software Holdings, Inc. was the sole issuer to tap the market with its $350 million issue of seven-year senior secured notes (B2/B).

Meanwhile, it was another quiet day in the secondary space with the market largely unchanged.

“We’re just chugging along sideways,” a source said.

While unchanged on Monday, the coming week promised to be busy with a slew of earnings expected throughout the week and the Federal Reserve’s two-day meeting set to conclude on Wednesday.

New paper was active although with mixed trajectories.

Encino Acquisition Partners Holdings, LLC’s 8½% senior notes due 2028 (B3/B/B) were under pressure with the notes trading down to a 98-handle.

However, Ahead DB Holdings’ 6 5/8% senior notes due 2028 (Caa1/CCC+) outperformed with the notes trading up to a 102-handle despite a lower coupon and credit rating.

Wheel Pros, Inc.’s 6 ½% senior notes due 2029 (Caa2/CCC) and StoneMor Inc.’s 8½% senior notes due 2029 were also trading with a healthy premium in the aftermarket.

Monday’s primary

Helios Software Holdings and its parent, ION Corporate Solutions Finance Sarl, priced Monday's sole deal, a $350 million issue of 4 5/8% seven-year senior secured notes (B2/B) that came at par, in the middle talk.

Pricing came at the conclusion of a roadshow.

Meanwhile the active forward calendar saw a modicum of growth (see related stories in this issue).

The pace of activity in the primary market is almost certain to pick up on Tuesday, a trader said, noting that Tesla soundly beat analysts' expectations on its late Monday earnings call, and Fed Chairman Jerome Powell is widely expected to telegraph continuing support for the U.S., in the form of ultra-low rates, at a news conference on Wednesday.

Investors who may have been taking a header will likely conclude that the rally in high yield bonds still has a way to run, the source added.

Encino under pressure

Encino’s 8½% senior notes due 2028 were under pressure in the secondary space with the notes trading down to a 98-handle.

The 8½% notes traded as low as 97¾ during Monday’s session.

They were changing hands in the 98 to 98¾ context heading into the close.

The notes were active with more than $56 million on the tape during Monday’s session.

Encino Acquisition Partners priced a $700 million issue of the 8½% notes at par on Friday.

The yield printed in the middle of yield talk in the 8½% area.

Ahead DB in demand

The demand seen during bookbuilding for Ahead DB’s 6 5/8% senior notes due 2028 followed them into the secondary space.

The 6 5/8% notes outperformed recent issues and traded up to a 102-handle.

They were marked at 102 bid, 102 ½ offered heading into the close.

There was more than $24 million in reported volume.

Ahead DB priced a $400 million issue of the 6 5/8% notes at par last Friday.

The yield printed at the tight end of yield talk in the 6¾% area.

The deal was heard to have played to $1.5 billion of orders.

At a premium

Wheel Pros 6½% senior notes due 2029 and StoneMor’s 8½% senior notes due 2029 were putting in strong performances in the aftermarket.

Wheel Pros 6½% senior notes due 2029 were marked at par ¾ bid, 101¼ offered heading into the market close.

There was about $19 million in reported volume.

In a heavily oversubscribed offering, Wheel Pros priced a $365 million issue of the 6½% notes on Friday.

Pricing came at the tight end of talk for a yield in the 6 5/8% area, which had been revised from earlier talk for a yield of 6¾% to 7%.

StoneMor’s 8½% senior notes due 2029 were marked at par ¾ bid, 101¼ offered heading into the market close.

The cemetery owner and operator priced a $400 million issue of the 8½% notes at par on Friday.

The yield printed at the wide end of the 8¼% to 8½% yield talk.

Friday fund flows

The dedicated high-yield bond funds saw $90 million of net daily inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $180 million of inflows on the day.

However actively managed high-yield funds sustained $90 million of outflows on Friday, the source said.

Indexes

Indexes notched out minor gains on a relatively flat day for the market.

The KDP High Yield Daily index added 1 point to close Monday at 69.55. However, the yield was flush with Friday’s close at 3.89%.

The index posted a cumulative loss of 9 points on the week last week.

The ICE BofAML US High Yield index gained 9 bps with the year-to-date return now 1.9%.

The index posted a cumulative loss of 21.4 bps on the week last week.

The CDX High Yield 30 index inched up 3 bps to close Monday at 109.68.

The index posted a cumulative loss of 31 bps on the week last week.

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