IPL Plastics on deck; Sabre in focus, trades up; GFL breaks par; Albertsons gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 21 – After a heavy-volume week, the domestic high-yield primary market was subdued on Friday with only one deal on the horizon.

IPL Plastics Inc. began a roadshow for a $450 million offering of eight-year senior secured notes.

Meanwhile, the secondary space was quiet on Friday with the market again largely unchanged as it has been for much of the week.

Sabre GLBL Inc.’s 7 3/8% senior secured notes due 2025 (Ba3/B) were making gains in heavy volume.

While focus was on Sabre’s new notes, the travel technology company’s 9¼% senior secured notes due 2025 (Ba3/B) were also active and making gains.

Meanwhile, several recent deals that initially struggled in the aftermarket were on the rise on Friday.

GFL Environmental Inc.’s recently priced 3¾% senior secured notes due 2025 (Ba1/BB) topped par on Friday after largely languishing below since breaking for trade.

Albertsons Cos. Inc.’s 3½% senior notes due 2029 (B2/BB-) continued to improve in active trading on Friday.

Friday’s primary

The Friday primary market session turned up news on a single deal.

IPL Plastics began a roadshow for a $450 million offering of eight-year senior secured notes backing Madison Dearborn's venture to take the company private, announced in late July.

Initial talk is in the high 6% to 7% area. There is an investor call set for noon ET Monday (see related story in this issue).

Apart from that deal, all was as expected on a late August Friday in the primary market: ultra-quiet.

The Dog Days of August might have started sooner had it not been for the fact that Labor Day, the traditional summer/fall terminus in the bond market, takes place so late this year, a bond trader said.

Labor Day 2020 is set for Sept. 7, whereas it fell on Sept. 2 in 2019 and Sept. 3 in 2018.

Some workers in the big banks are already taking their mandatory two-week vacations, the trader said.

The run-up to Labor Day figures to be quiet, but not completely quiet.

It is often a period when off-the-run names show up with high-yield bond offerings, since it is a given that a prospective issuer is apt to command a greater share of the market's attention when the active calendar empties.

Sabre in focus

Sabre’s 7 3/8% senior secured notes due 2025 were in focus on Friday with the notes trading with a heavy premium.

The 7 3/8% notes traded up to a 101-handle and were changing hands in the 101¼ to 101 5/8 context heading into the market close.

The bonds had more than $173 million in reported volume by the late afternoon, making them the most actively traded issue in the secondary space.

Sabre priced a massively upsized $850 million issue of the 7 3/8% notes at par in a Thursday drive-by. Pricing came at the tight end of yield talk in the 7½% area.

The initial size of the deal was $300 million.

While Sabre’s 7 3/8% notes were in focus, the travel technology company’s 9¼% senior secured notes due 2025 were active and posting gains.

The 9¼% notes traded up ¾ point to close Friday at 109¼.

While the 7 3/8% notes and 9¼% notes were trading with a similar yield, the 7 3/8% notes were cheaper based on their credit spread, a source said.

The 7 3/8% notes were trading with a spread of 670 bps versus the 9¼% notes’ spread of 658, the source said.

GFL tops par

After trading at par since breaking for trade, GFL’s 3¾% senior notes due 2025 topped par on Friday.

The notes gained 5/8 point to close Friday at par ¼, a source said.

The notes were active on a low-volume day with $14 million on the tape by the late afternoon.

The 3¾% notes have largely traded on a 99-handle since breaking for trade.

GFL priced a $750 million issue of the 3¾% notes at par on Aug. 17.

Albertsons gains

Albertsons’ 3½% senior notes due 2029 continued their upward momentum on Friday.

The notes were up ½ point to close the day at 101, sources said.

There was more than $16 million on the tape by the late afternoon.

The 3½% notes have steadily gained throughout the week after an initial lackluster performance in the aftermarket.

Albertsons priced a $750 million tranche of the 3½% notes due 2029 at par on Aug. 12.

The notes were wrapped around par after breaking for trade.

However, they have been bid up since Monday.

$106 million Thursday inflows

The dedicated high-yield bond funds saw $106 million of net inflows on Thursday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds saw $141 million of inflows on the day.

However high-yield ETFs were negative, sustaining $35 million of outflows on Thursday, the source said.

News of those daily flows follows a Thursday report that the combined funds sustained $301 million of net outflows in the week to the Wednesday, Aug. 19 close, according to the Refinitiv Lipper Fund Flow Report Newsline.

It was the first weekly outflow since late July, trailing six consecutive weekly inflows totaling $13.1 billion, the market source noted.

Indexes gain

Indexes closed Friday with gains. However, they were mixed on the week.

The KDP High Yield Daily index gained 3 basis points to close Friday at 66.75 with the yield 5.55%.

The index was up 1 bp on Thursday after shaving off 1 bp on Wednesday, 3 bps on Tuesday and 9 bps on Monday.

The index posted a cumulative loss of 9 bps on the week.

The ICE BofAML US High Yield index gained 4.4 bps with the year-to-date return now 0.086%.

The index shaved off 4.3 bps on Thursday, gained 3.7 bps on Wednesday and 7.5 bps on Tuesday after sliding 2.9 bps on Monday.

The index posted a cumulative gain of 8.4 bps on the week.

The CDX High Yield 30 index rose 15 bps to close Friday at 104.72.

The index gained 16 bps on Thursday, dropped 36 bps on Wednesday, gained 29 bps on Tuesday and 48 bps on Monday.

The index posted a cumulative gain of 72 bps on the week.

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