Radiology on tap; CenturyLink, ADT, Air Transport, MEG, Ortho-Clinical, PBF at a premium

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 17 – After an active week that saw 11 issuers price $9.33 billion in 12 tranches, the domestic high-yield primary market took a breather on Friday.

However, one deal joined the forward calendar.

Radiology Partners, Inc. disclosed plans to shop a $610 million offering of eight-year senior notes at an investor lunch on Tuesday, Jan. 21.

Meanwhile, new paper was in focus in the secondary space with the issues to price during Thursday’s session topping the volume charts.

While some issues rose higher than others, all were trading with a healthy premium in the secondary space.

ADT Inc.’s 6¼% senior notes due 2028 (B3/B-) were among the most actively traded issues in the secondary space with the notes more than 1 point above their issue price.

CenturyLink, Inc.’s 4% senior notes due 2027 (Ba3/expected BBB-/expected BB+) also saw heavy volume.

While the notes were trading at a premium, they were the weakest of the new paper to price during Thursday’s session.

MEG Energy Corp.’s 7 1/8% senior notes due 2027 (B3/BB-/B+) and PBF Holding Co. and PBF Finance Corp.’s 6% senior notes due 2028 (B1/BB/BB) – both issues from the energy sector – were putting in strong performances.

Air Transport Services Group, Inc.’s 4¾% senior notes due 2028 (Ba3/B+) were also more than 1 point above their issue price in active trading.

Ortho-Clinical Diagnostics SA’s 7¼% senior notes due 2028 (Caa2/CCC) were in demand with the notes one of the best performers out of the slew of deals to price during Thursday’s session.

ADT in focus

ADT’s 6¼% senior notes due 2028 were among the most actively traded issues of Friday’s session with the notes trading at a large premium to their issue price.

The 6¼% notes were changing hands in a 101 1/8 to 101 3/8 context, a market source said.

The bonds saw more than $136 million in reported volume.

The coupon was a decent one for a single-B credit, a source said.

ADT priced a $1.3 billion issue of the 6¼% notes at the tight end of talk in a Thursday drive-by.

The yield printed at the tight end of the 6¼% to 6½% yield talk.

CenturyLink underwhelms

CenturyLink’s 4% senior notes due 2027 also saw heavy volume during Friday’s session.

While the notes were moving at a premium, they were the worst performers of the deals to price on Thursday, a source said.

The notes were changing hands in the par 3/8 to par 5/8 context on Friday. “They never really took off,” a source said.

The lack of movement was attributed to the tight pricing of the large issue.

CenturyLink priced an upsized $1.25 billion issue of the 4% notes at par in a Thursday drive-by.

Early guidance was in the 4 3/8% area, a source said.

The initial size of the deal was $750 million.

MEG Energy trades up

MEG Energy’s 7 1/8% senior notes due 2027 were trading at a large premium in the secondary space, with higher-rated energy names in demand.

The 7 1/8% notes were changing hands in the 101 5/8 to 101 7/8 context on Friday.

MEG Energy priced an upsized $1.2 billion issue of the 7 1/8% notes in a Thursday drive-by.

The yield printed at the tight end of yield talk in the 7¼% area.

The issue size increased from $800 million.

The deal was heard to be heavily oversubscribed and driven to the market by a substantial amount of reverse inquiry.

PBF shoots higher

While volume was light on Friday, PBF Holding’s 6% senior notes due 2028 continued to trade at a large premium in the secondary space with the notes the best performer out of Thursday’s deals.

The notes “shot straight up,” and were changing hands in the 102¾ to 103 context on Friday, a source said.

PBF is a double-B credit from the energy sector. The notes were priced with plenty of room for them to run, the source said.

Volume in the large issue was lighter on Friday given the amount it traded during Thursday’s session.

The notes broke for trade on the early side of Thursday’s session and saw more than $100 million in reported volume before the close.

PBF priced a $1 billion issue of the 6% notes at par on Thursday.

The yield printed in the middle of yield talk in the 6% area and tight to initial guidance in the low 6% area.

Air Transport eyed

While the issue size was small compared to the megadeals to price on Thursday, Air Transport’s 4¾% notes due 2028 were active in the secondary space with the notes trading at a healthy premium to their issue price.

The 4¾% notes were changing hands in the 101½ to 101¾ context on Friday with the notes sought after by investors, sources said.

The notes saw more than $52 million in reported volume.

Air Transport priced an upsized $500 million issue of the 4¾% senior notes at par on Thursday.

The yield printed at the tight end of yield talk in the 4 7/8% area and tighter than initial guidance in the 5¼% area.

The issue size increased from $400 million.

Ortho-Clinical in demand

Ortho-Clinical’s 7¼% senior notes due 2028 (Caa2/CCC) were in demand in the secondary space with the notes trading more than 2 points above their issue price.

The 7¼% notes were changing hands in the 102¼ to 102¾ context on Friday with more than $44 million in reported volume.

Ortho-Clinical priced an upsized $675 million issue of the 7¼% notes at par on Thursday.

The deal priced tight to talk in the mid 7% area. The issue size was increased from $440 million.

Indexes

Indexes closed the week mixed.

The KDP High Yield Daily index was down 4 points to close Friday at 71.92 with the yield 4.87%.

The index was flat on Thursday, was up 4 basis points on Wednesday, 3 bps on Tuesday and 2 bps on Monday.

The index saw a cumulative gain of 5 bps on the week.

The ICE BofAML US High Yield index gained 1.5 bps with the year-to-date return now 0.759%.

The index was up 6.1 bps on Thursday, 6 bps on Wednesday, 8 bps on Tuesday and 8 bps on Monday for a cumulative gain of 29.6 bps on the week.

The CDX High Yield 30 index rose 2 bps to close Friday at 109.62. The index was up 8 bps on Thursday, was down 2 bps on Wednesday, 12 bps on Tuesday and 10 bps on Monday.

The index saw a cumulative loss of 14 bps on the week.

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