CHS, Altice, Navient, Garda, Adams Homes, Icahn add-on price; VICI, Albertsons at a premium

By Abigail W. Adams

Portland, Me., Jan. 23 – The domestic high-yield primary market continued its active pace on Thursday with $4.26 billion pricing in six dollar-denominated tranches.

Altice priced an upsized €2.9 billion equivalent three-tranche offering, which included an upsized $1.23 billion tranche on Thursday.

Adams Homes, Inc. priced a $225 million issue of five-year senior notes (B3/B+).

In drive-by action, CHS/Community Health Systems Inc. priced an upsized $1,462,000,000 issue of five-year senior secured notes, Navient Corp. priced a $700 million issue of seven-year senior bullet notes (Ba3/B+/BB), Garda World Security Corp. priced an upsized $450 million issue of seven-year senior secured notes (B1/B), and Icahn Enterprises LP and Icahn Enterprises Finance Corp. priced an upsized $300 million add-on to their 4¾% senior bullet notes due Sept. 15, 2024 (expected ratings Ba3/BB+).

New paper remained in focus in the secondary space with the megadeals to price during Wednesday’s session putting in strong performances on Thursday.

VICI Properties LP and VICI Note Co. Inc.’s three-tranche offering was mixed on Thursday with one tranche weakening while two moved sidewise after all saw a strong break on Wednesday.

Albertsons Cos. Inc.’s three tranches were also mixed with some trading sidewise and other coming in slightly after also seeing a strong break.

However, Baytex Energy Corp.’s 8¾% senior notes due 2027 saw a lackluster reception in the secondary space with the notes lagging their issue price.

Altice upsizes

Altice priced an upsized €2.9 billion equivalent three tranche offering on Thursday.

Altice France SA priced €500 million of 2 1/8% five-year senior secured notes (B2/B) at 99.408 to yield 2¼%.

Ypso Finance BIS SA priced a euro-denominated and dollar-denominated tranche of eight-year senior unsecured notes (Caa1/CCC+) – a €500 million tranche, which priced at par to yield 4% and an upsized $1,225,000,000 tranche, which priced at par to yield 6%.

The dollar-denominated tranche had been marketed at a size of $500 million minimum. The yield printed on the low side of price talk in the 6¼% area.

The 6% notes were active and trading at a premium after breaking for trade. The notes traded up to par ½, a market source said.

Thursday’s drive-bys

The drive-by window was wide open on Thursday with several issuers tapping the market.

CHS/Community Health Systems priced an upsized $1,462,000,000 issue of five-year senior secured notes at par to yield 6 5/8%.

The issue size increased from $1.02 billion.

The yield printed at the tight end of yield talk in the 6¾% area.

Garda World Security priced an upsized $450 million issue of seven-year senior secured notes (B1/B) at par to yield 4 5/8%.

The issue size was increased from $400 million.

Navient priced a $700 million issue of seven-year senior bullet notes at par to yield 5% in a quick-to-market Thursday trade, according to a syndicate source.

The yield printed at the tight end of the 5% to 5 1/8% yield talk.

Icahn priced an upsized $300 million add-on to their 4¾% senior bullet notes due Sept. 15, 2024 at 102.

The deal priced on top of price talk. The issue size was upsized from $250 million.

While not a drive-by, Adams Homes priced a $225 million issue of five-year senior notes at par to yield 7½%.

The yield printed at the tight end of the 7½% to 7¾% yield talk.

VICI trades up

VICI Properties’ megadeal was a “blowout” with the offering heavily oversubscribed during bookbuilding and each of the three tranches trading with strong premiums in the secondary space, sources said.

VICI’s 3½% senior notes due 2025 were changing hands just north of 101 in high-volume activity on Thursday.

The tranche was largely flat from Wednesday’s close

However, the 3¾% senior notes due 2027 were coming in on Thursday after also closing out Wednesday at 101, sources said.

The 3¾% notes due 2027 dropped about ½ point. They were changing hands in the par 3/8 to par 5/8 context during Thursday’s session and stood poised to close the day at par ½, sources said.

The 4 1/8% senior notes due 2030 continued to trade in the 101½ to 101¾ context on Thursday – largely unchanged from Wednesday’s close.

VICI priced $2.5 billion of senior notes (Ba3/BB/BB) in three tranches on Wednesday.

The real estate investment trust specializing in casino properties priced a $750 million tranche of the 3½% notes, a $750 million tranche of the 3¾% notes and a $1 billion tranche of the 4 1/8% notes at par.

The 3½% notes priced on top of final talk and tight to earlier talk in the 3 5/8% area.

The 3¾% notes priced on top of final talk and tight to earlier talk in the 3 7/8% area.

The 4 1/8% notes priced on top of final talk and tight to earlier talk in the 4¼% area.

With strong inflows and heavy demand for higher-rated paper, the notes were trading at a large premium despite two of the tranches pricing with a 3-handle, a source said.

Albertsons at a premium

Albertsons’ megadeal was also well received in the secondary space.

While volume was comparatively light, the 3½% senior notes due 2023 gained about ¼ point to close the day at 101¼, sources said.

The 4 7/8% senior notes due 2030 continued to see heavy-volume activity on Thursday.

However, the notes were coming in slightly after a strong break on Wednesday.

The 4 7/8% notes were changing hands in the 101½ to 101¾ context on Thursday after closing out Wednesday at 102.

The grocery chain operator priced a $2.35 billion offering of senior notes (B2/BB-) in three tranches on Wednesday.

The deal included a $750 million tranche of the 3½% notes and a $1 billion tranche of the 4 7/8% notes at par on Wednesday.

The 3½% notes priced at the tight end of the 3½% to 3¾% yield talk.

The 4 7/8% notes priced at the tight end of the 4 7/8% to 5 1/8% price talk.

The deal also included a $600 million add-on to the 4 5/8% senior notes due Jan. 15, 2027, which priced at 101. The issue price came in the middle of price talk in the 101 area.

Baytex Energy lags

While Albertsons and VICI traded at a premium despite tight pricing that saw executions with a 3-handle, Baytex Energy’s 8¾% senior notes due 2027 were lagging their issue price in the aftermarket.

The notes were the most recent underperformer from the energy sector with several recent deals also taking a hit as crude oil futures slumped.

While the notes gained strength heading into the market close, they traded as low as 98 ¾ during Thursday’s session, a market source said.

However, the notes rebounded off their low and were changing hands around 99½ heading into the market close.

Baytex priced a $500 million issue of the 8¾% notes at par on Wednesday.

Pricing came at the wide end of the 8½% to 8¾% yield talk.

Indexes down

Indexes were down on Thursday after a mixed week.

The KDP High Yield Daily index dropped 13 points to close Thursday at 71.67 with the yield now 4.98%. The index was down 8 bps on Wednesday and 4 bps on Tuesday.

The ICE BofAML US High Yield index dropped 21.2 bps with the year-to-date return now 0.487%.

The index was down 3.4 bps on Wednesday and 2.6 bps on Tuesday, when the index saw its first decline in 2020.

The CDX High Yield 30 index dropped 24 bps to close Thursday at 109.1. The index was flat on Wednesday and was down 28 bps on Tuesday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.