Compass, Targa, American Greetings price; McDermott dominates; funds lose $573 million

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 5 – The primary market was busy on Thursday with dealers clearing the active forward calendar. Four deals totaling $1.76 billion priced – two of them coming as drive-bys from the energy sector.

Targa Resources Partners LP priced an upsized $1 billion issue of eight-year senior notes (existing ratings Ba3/BB-) at par to yield 5 7/8%.

Resolute Energy Corp. priced a $75 million add-on to its 8½% senior notes due May 1, 2020 (Caa1/B-/B+) at 99.51 to yield 8.76%.

In a roadshow deal, Compass Diversified Holdings LLC priced a $400 million issue of eight-year senior notes (B3/B-) at par to yield 8%.

After an elongated and embattled marketing tour, American Greetings Corp. priced a downsized, restructured $282.5 million issue of 8¾% seven-year senior notes (Caa1/CCC+) at 87 to yield 11.499%.

As new paper enters the market, recent deals from McDermott International Inc. and Freedom Mortgage Corp. continued to perform well in the secondary space.

McDermott’s new 10 5/8% senior notes due May 2024 (B2/B-) were up sharply in high volume trading while Freedom Mortgage’s new 8¼% senior notes due 2025 (B2/B-) were relatively unchanged but also active.

Meanwhile high-yield mutual and exchange-traded funds saw a third consecutive losing week. Lipper US Fund Flows reported high-yield funds sustained $573 million of aggregate outflows for the week closing on Wednesday.

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