Howard Hughes, Harvest Midstream, DSLD price; new deals trade up; index turns positive

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 5 – Tropical Storm Isaias, which swamped portions of New Jersey, New York, and Connecticut beginning Tuesday – with market participants homebound by the pandemic facing widespread power outages – significantly slowed the high-yield new issue market on Wednesday, but failed to close it.

Three deals priced, including a drive-by.

All came at the tight ends of talk.

Howard Hughes Corp. priced a $750 million issue, Harvest Midstream I LP priced a $600 million issue and STL Holding Co. LLC, doing business as DSLD Homes, priced a $225 million issue.

Meanwhile, it was another risk-on day in the secondary space with the influx of new paper continuing to trade up despite tight pricing that had many deals clear the primary market with a 3-handle, a source said.

Element Solutions Inc.’s 3 7/8% senior notes due 2028, Emergent BioSolutions Inc.’s 3 7/8% senior notes due 2028 (Ba3/BB-) and Penske Automotive Group, Inc.’s 3½% senior notes due 2025 (Ba3/B+) were all trading well above their issue prices in the secondary space.

Xerox Holdings Corp.’s two tranches of senior notes (Ba1/BB) were also changing hands at large premiums in high-volume activity.

There continued to be an influx of cash into the high-yield market with buying pressure driving the secondary space higher, a source said.

The ICE BofAML US High Yield index year-to-date returns turned positive for the first time since the end of February.

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