Junk ends firm; Parsley, Brinks, Gulfport price, trade up; recent issues active, strong

By Paul A. Harris and Stephanie N. Rotondo

Seattle, Oct. 5 – Three new deals priced on Thursday, two of them upsized.

Parsley Energy, LLC brought an increase $700 million of 10-year senior notes, Brinks Co. priced $600 million issue of 10-year senior notes, an offering that was also expanded from its planned size, and Gulfport Energy Corp. brought $450 million of nine-year senior notes.

Meanwhile in secondary trading it continued to be new-issues-all-the-time in the high yield bond market on Thursday.

Deals priced during the day’s session were rather active – and better – though new issues from earlier in the week also remained on the radar.

Away from the new deals, oil names pushed up as crude oil prices once again ticked over the $50 mark. Among the gainers were California Resources Corp. and Denbury Resources Inc.

Market indicators showed the overall market was firm in trading on Thursday.

Meanwhile high-yield mutual funds – seen as an indicator of overall market liquidity trends – were in positive territory for the most recent week, seeing $646 million of inflows in the period ending Wednesday, according to AMG Data Services Inc., a source familiar with the data said. It was the third consecutive cash gain.

According to a Prospect News analysis of the data, this week’s inflow was the 20th so far this year, versus 20 outflows during that time.

Parsley Energy upsizes

Parsley Energy, LLC and Parsley Finance Corp. priced an upsized $700 million of 10-year senior notes (B2/BB-) at par to yield 5 5/8% in a quick-to-market trade on Thursday, according to an informed source.

The amount was increased from $600 million and the yield printed on top of talk set in the 5 5/8% area.

Credit Suisse Securities (USA) LLC was the sole bookrunner.

The Austin, Texas-based energy exploration and production company, which is solely focused on the Permian Basin, plans to use the proceeds to fund a portion of its capital program and for general corporate purposes.

Brinks upsized

Brinks priced an upsized $600 million issue of 10-year senior notes (Ba2/BB/BB+) at par to yield 4 5/8% on Thursday, according to a market source.

The deal was increased from $500 million.

BofA Merrill Lynch was the lead.

The Richmond, Va.-based provider of cash management and security services plans to use the proceeds to repay revolving credit facility, term loan and certain other debt, with remaining proceeds to be used for working capital, capital expenditures, acquisitions and for other general corporate purposes.

Gulfport drives by

Gulfport Energy announced in a Thursday press release that it priced $450 million of 6 3/8% senior notes due 2026 via Rule 144A and Regulation S.

Gulfport expects to use the net proceeds to pay off its secured revolving credit facility and for general corporate purposes, which may include the funding of a portion of its 2017 capital development plans.

Gulfport is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North. It maintains corporate headquarters in Oklahoma City.

Dominion talked at 7½% to 7¾%

Dominion Diamond Corp. talked its $550 million offering of five-year senior secured second-lien notes to yield 7½% to 7¾%, according to a syndicate source.

Along with price talk there were covenant changes.

Books close at 10:30 a.m. ET Friday and the Rule 144A and Regulation S for life notes are set to price subsequently.

Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., Natixis and UBS Investment Bank are the joint bookrunners.

Proceeds will be used to help fund the leveraged buyout of the Calgary, Alta.-based producer of rough diamonds by Washington Cos.

The issuing entities will be special-purpose vehicles Northwest Acquisitions ULC and Dominion Finance Corp.

Altice announces €500 million

Altice Finco SA announced that a stabilization period was expected to begin on Thursday for a €500 million offering of 10.25-year fixed-rate notes.

J.P. Morgan Securities plc, Barclays, BNP Paribas, Credit Suisse, Goldman Sachs and Morgan Stanley are the stabilization managers.

The notes will come with five years of call protection.

Altice is a Netherlands-based telecom.

Indicators turn up

The high-yield bond market was trading firm on Thursday.

The KDP High Yield Index jumped to 72.46 with a 5.09% yield. That compared to 72.39 with a 5.12% yield, on Wednesday.

As for the CDX North American Series 29 High Yield Index, it was up over 1/8 point at 108.77 bid, 108.257 offered, according to a market source.

Thursday’s issues firm

In trading in Thursday’s new deals, Parsley Energy’s 5 5/8% notes due 2027 pushed up over their par issue price after coming upsized and in line with price talk.

A trader pegged the paper at 101½.

The deal came to market via Credit Suisse Securities (USA) LLC.

Also from Thursday’s business, Gulfport Energy’s 6 3/8% notes due 2026 saw “tons of trades,” a trader said.

The trader placed the issue at par 7/8.

Another trader said the bonds closed “just below 101.”

Weeks deals do well

Among deals priced earlier in the week, Transocean Inc.’s 7½% notes due 2026 “continued to march upward,” according to a trader.

The trader said the $750 million deal was “heavily traded,” ticking up ¼ point to 102¼.

A second trader pegged the paper “around 102.”

The deal priced Wednesday via Citigroup Global Markets Inc., Barclays and Wells Fargo Securities LLC.

Time Inc.’s $300 million of 7½% notes due 2025 – another deal that came Wednesday – edged up a touch as well, adding ¼ point to end at par ¾.

Citigroup, Morgan Stanley & Co. LLC, BofA Merrill Lynch, Barclays, BNP Paribas Securities Corp. and J.P. Morgan Securities LLC were the joint bookrunners.

Rounding out Wednesday’s deals, Hologic Inc.’s $350 million of 4 3/8% notes due 2025 gained nearly a point in trading on Thursday, finishing at 101¼.

Goldman Sachs & Co. was the left bookrunner. BofA, JP Morgan, MUFG and Citigroup acted as joint bookrunners.

Not to be outdone, West Corp.’s $1.15 billion of 8½% notes due 2025 were busy and a shade better, closing at 99¼, a trader said.

The deal came on Tuesday at the discounted price of 98.579. It was downsized from $1.35 billion.

Joint bookrunner RBC Capital Markets LLC will bill and deliver. Credit Suisse, Barclays, BofA, Citigroup, Deutsche Bank Securities Inc., Morgan Stanley and Goldman Sachs were also joint bookrunners.

Oil issuers gain

Meanwhile, oil names were firm up as crude prices once again passed the $50 mark.

A trader said California Resources’ 8% second-lien notes due 2022, for instance, rose 1¼ points to 64¼.

Another trader placed the issue “around 64.”

Yet another source pegged the bonds at 64½, up ¼ point.

Denbury Resources was also better, with a trader calling the 5½% notes due 2022 up 3½ points to 60.

Another source deemed the Denbury 6 3/8% notes due 2021 higher by 2 points at 63.

Domestic crude oil prices improved nearly 1.5% on Thursday as chatter of an extension on OPEC’s production cut agreement increased.

The commodity’s increase was also helped by a larger-than-expected drawdown in U.S. crude stockpiles. The Energy Information Administration reported on Wednesday that crude inventories fell by 6 million barrels last week, over four times the amount Wall Street expected.

Furthermore, Tropical Storm Nate is gaining strength in the Gulf of Mexico and is expected to turn into a hurricane by the weekend. This puts oil production and refinery work in harm’s way yet again.

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