JBS, Entercom price; Netflix megadeal on tap; APX jumps; Air Methods gains; Sprint drops

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 23 – The floodgates opened for the European and domestic high-yield primary market on Tuesday with several deals pricing and more on tap.

JBS USA priced $700 million of unsecured notes in three add-on tranches in a quick-to-market Tuesday trade.

Entercom Media Corp. priced an upsized $325 million issue of eight-year senior secured second-lien notes (B2/B-) at par to yield 6½%.

APX Group, Inc., the parent of Vivint Inc., was also in the market with a drive-by $250 million offering of senior notes due November 2024.

However, no updates were available as of press time.

All eyes will be on Wednesday’s session when Netflix, Inc. plans to price a $2 billion equivalent two-part offering.

In the European market, the forward calendar ballooned with EG Group, FNAC Darty SA, eircom, Telepizza and William Hill plc all planning roadshows.

Meanwhile, the secondary space was firm on Tuesday with trading volume beginning to pick up steam.

APX Group’s 7 5/8% senior notes due 2023 jumped more than 3 points in active trading on news a new refinancing deal was in the works.

Netflix’s 5 7/8% senior notes due 2028 were also active on news of the new offering.

Air Methods Corp.’s 8% senior notes due 2025 made large gains in active trading following news of the closure of some of its bases in Oklahoma.

Sprint Corp.’s 7 7/8% senior notes due 2023 continued to trade down on Tuesday as speculation continues about pushback surrounding the wireless service provider’s merger with T-Mobile.

JBS $700 million three-part tap

In a news-heavy Tuesday primary market, JBS USA priced $700 million of unsecured notes in three add-on tranches in a quick-to-market Tuesday trade, according to market sources.

The tranches were resized, with $200 million of proceeds shifted to the longest tranche by means of downsizing both shorter dated tranches by $100 million apiece.

The refinancing deal included a downsized $150 million add-on to the 5 7/8% senior notes due July 15, 2024 which priced at 101.75, with a 5.272%.

A downsized $150 million add-on to the 5¾% senior notes due Jun 15, 2025 priced at 101.75 to yield 5.271%, and an upsized $400 million add-on to the 6½% senior notes due April 15, 2029 priced at 104.00 to yield 5.863%.

Barclays was the left bookrunner.

All tranches priced tight and rich or through talk (see related story in this issue).

Entercom upsizes

Entercom Media priced an upsized $325 million issue of eight-year senior secured second-lien notes (B2/B-) at par to yield 6½%.

The issue size increased from $300 million.

The yield printed at the tight end of the 6½% to 6¾% yield talk and well inside of initial guidance of 6 7/8% to 7 1/8%.

BofA Merrill Lynch was the left bookrunner for the debt refinancing deal.

APX Group, the parent of Vivint, was also in the Tuesday market with a drive-by $250 million offering of senior notes due November 2024, via BofA Merrill Lynch.

Although it was expected to price Tuesday, no terms were available at press time.

Netflix $2 billion dollar/euro deal

Netflix talked the dollar-denominated tranche of its $2 billion equivalent two-part offering of senior bullet notes (Ba3/BB-) in the 5½% area.

Talk comes tight to the 5 5/8% initial guidance.

The deal is expected to come in similarly sized tranches, a trader said.

Meanwhile, with official talk pending, the euro-denominated notes have initial guidance of 4% to 4 1/8%.

Books close at 10:30 a.m. ET Wednesday, and the deal is set to price thereafter.

Morgan Stanley, Goldman Sachs, JP Morgan, Deutsche Bank and Wells Fargo are the joint bookrunners.

Proceeds will be used for general corporate purposes.

EG roadshows €1.36 billion equivalent

It was also a news-heavy day in the European primary market.

Filling station operator EG Group plans to start a European roadshow on Wednesday for a €1.355 billion equivalent offering of senior secured notes due February 2025.

The European roadshow wraps up on Friday. A roadshow in the United States is set to run from Monday to Wednesday, May 1.

The deal is coming in dollar-denominated and euro-denominated tranches with minimum sizes of $500 million and €500 million, respectively.

The dollar-denominated notes are in the market with initial guidance in the low 7% area. The euro-denominated notes have initial guidance of 5%.

Left global coordinator Barclays will bill and deliver.

Brief roadshow for FNAC Darty

FNAC Darty plans to have a roadshow for a €650 million two-part offering of senior notes (expected Ratings Ba2/BB+) on Wednesday.

The debt refinancing deal features €300 million of five-year notes with two years of call protection and €350 million of seven-year notes with three years of call protection.

Global coordinator Credit Agricole CIB will bill and deliver.

eircom brings notes

Dublin-based telecom company eircom plans to price an offering of senior secured notes (B+/BB) due 2026. The notes and the concurrent credit facility together are expected to raise €850 million.

Proceeds will be used to redeem eircom Finance’s €700 million senior secured notes due 2022, to put cash on the balance sheet and to pay fees and expenses associated with the transactions.

Telepizza roadshow

Madrid-based pizzeria chain Telepizza started a roadshow on Tuesday for a €335 million offering of seven-year notes (B2).

Lead left bookrunner Citigroup will bill and deliver.

The issuing entity will be Tasty Bondco 1 SAU, an investment vehicle managed directly by KKR, which is acquiring Telepizza.

Proceeds will be used to refinance debt.

William Hill sterling deal

William Hill plans to begin a brief roadshow on Wednesday for a £350 million offering of seven-year senior notes (expected ratings Ba1/BB).

Active bookrunner Barclays will bill and deliver.

The London-based bookmaking operation plans to use the proceeds to partially refinance £375 million of its 4¼% notes due 2020 and for general corporate purposes.

APX jumps

As the subscription process for APX Group’s new offering was underway, the smart home security service provider’s 7 5/8% senior notes due 2023 were making large gains in active trading.

The 7 5/8% notes jumped 3¼ points to 89, according to a market source.

More than $11.5 million of the bonds were on the tape by the late afternoon.

The credit spread on the 7 5/8% notes tightened more than 100 bps due to the new refinancing deal, according to a market source said.

Netflix active

With a new $2 billion equivalent megadeal in the works, Netflix’s 5 7/8% senior notes due 2028 were active in the secondary space, although the notes were largely trading flat.

The 5 7/8% notes continued to trade around 104¾, a market source said. More than $17 million of the bonds changed hands by the late afternoon.

Air Methods gains

Air Methods’ 8% senior notes due 2025 were gaining steam on Tuesday following news the helicopter operator was closing four of its bases in Oklahoma.

The 8% notes rose 1 7/8 points to 60 7/8, according to a market source. More than $17 million of the bonds were on the tape with more buyers than sellers in the market.

The 8% notes were making gains after Air Methods announced the closure of four of its Oklahoma medical helicopter bases due to financial considerations.

The cost of operating the bases was $3 million a year per base, the AP reported.

The closures in Oklahoma were the latest in a series of closures the company has made of its medical transport bases across the U.S.

Sprint down again

Sprint’s junk bonds continued to trade down on Tuesday as headlines fueled speculation about government pushback to the wireless service provider’s merger with T-Mobile.

The 7 7/8% senior notes due 2023 dropped 5/8 point to 104 in active trading on Tuesday with more than $21.5 million in reported volume.

Sprint’s junk bonds were trading down last Wednesday following news reports about government pushback to the merger.

Headlines surfaced on Tuesday about Sprint and T-Mobile executives meeting with the Federal Communications Commission to advocate for the merger, lending credence to speculation the deal was in trouble.

Monday flows

High-yield ETFs sustained $43 million of cash outflows on Monday, the most recent session for which data was available at press time, sources say.

Actively managed high-yield funds were absolutely flat on the day, the sources added.

So far in the week that will conclude with Wednesday's close the combined funds are tracking $108 million of outflows, the sources said.

Indexes flat to up

After launching the week with losses, indexes were either flat or on the rise on Tuesday.

The KDP High Yield Daily index was flat and closed Tuesday at 70.60 while the yield increased by 1 basis point to 5.71%.

The index slid 2 bps on Monday after a cumulative gain of 8 bps on the week last week.

The ICE BofAML US High Yield index gained 13.2 bps with the year-to-date return now 8.679%. The index slipped 0.6 bps on Tuesday after a 2.2 bps drop on the week last week.

The index shot past 8% year-to-date returns on April 8 after only recently surpassing the 7% threshold on March 26 and passing 6% year-to-date returns on March 11.

The CDX High Yield 30 index gained 18 bps to close Tuesday at 107.70. The index dropped 12 bps on Monday after closing last week flat.

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