Builders First Source leads drive-by parade, new bonds pop; Valeant jumps on results

By Paul Deckelman and Paul A. Harris

New York, Aug. 9 – For a second consecutive session, the high yield primary realm continued to be ruled on Tuesday by opportunistically timed and quickly shopped “drive-by” offerings pricing just hours after they had surfaced in the market.

A trio of such issuers brought a total of $1.5 billion of new dollar-denominated and fully junk-rated paper to market, each in a single-tranche offering.

Builders First Source Inc., a building materials manufacturer and supplier, had the big deal of the day, a $750 million issue of eight-year secured notes.

After that pricing, traders saw those new bonds having firmed smartly on brisk initial aftermarket volume.

MGM Growth Properties LLC, a gaming-oriented real estate investment trust, rolled the dice on an upsized $500 million of 10-year notes, with the new bonds quoted up modestly, though on much less volume than the Builders Source paper saw.

Another real estate investment company, Kennedy-Wilson Holdings, Inc., meanwhile did a $250 million add-on to its existing 2024 notes.

Besides those three brand-new transactions, the syndicate sources said that dealers holding seven-year senior secured notes from data management company Veritas priced an upsized $405 million of those notes, and plan to also sell another €230 million of that paper this week.

Away from the new issues, traders said there was intense activity in Valeant Pharmaceuticals International Inc.’s various note issues, all of it to the upside in busy trading, after the drug maker released second-quarter financial results.

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