SiriusXM, International Came, Griffon price; Realogy, Hillenbrand on deck; Royal Caribbean higher; Univision slips

By Paul A. Harris and James McCandless

Portland, Ore., June 8 – The high-yield new-deal machine picked up on Monday where it left off last week, while the secondary market started the week marked by a trend of weakness in newer issues.

The busy session saw SiriusXM price an upsized $1.5 billion issue of 10-year senior notes (Ba3/BB) at par to yield 4 1/8% in a drive-by.

The issue size increased from $1 billion.

The yield printed at the tight end of yield talk in the 4¼% area. Initial talk was 4¼% to 4½%.

International Game Technology plc priced an upsized $750 million issue of 5¼% senior secured notes due Jan. 15 2029 (Ba3/BB) at par to yield 5.249%.

The yield printed 12.6 basis points through yield in the 5½% area. Initial talk was in the high 5% area.

Griffon Corp. priced a $150 million add-on to its 5¾% senior notes due March 1, 2028 (B2/B+) at 100.25 to yield 5.696%.

The issue price came rich to the 99.5 to par price talk. Initial price talk was in the 99.25 area.

Looking ahead, Realogy Group talked a $400 million offering of five-year senior secured second lien notes (B3) to yield 8% to 8¼%.

Price talk comes well inside of initial guidance in the high 8% area, according to a trader who said that prior to official talk circulating the deal was heard to be playing to $1 billion of orders.

The deal is set to price Tuesday morning.

And Hillenbrand, Inc. talked an upsized $400 million offering of five-year senior notes (Ba1/BB+/BB+) to yield in the 6% area.

Official talk comes inside of initial talk in the low-to-mid 6% area.

The issue size increased from $300 million.

The deal is also set to price Tuesday.

Recent issuance from Royal Caribbean Cruises Ltd. pushed higher while Univision Communications Inc. and L Brands, Inc.’s saw weakness.

Meanwhile, PG&E Corp.’s notes were seen gaining after the company released its plans for funding its end-of-June bankruptcy exit.

Real estate name Realogy’s paper saw varying movements as the company prepares a new issue.

Recent notes active

On the back of a broad market push upward, newer issuance from Royal Caribbean and NMI pushed higher, traders said.

The Miami-based cruise line’s 9 1/8% senior notes due 2023 gained ¾ point to close at 104½ bid.

About $22 million of the notes changed hands.

Elsewhere, Dallas-based broadcaster Univision’s new 6 5/8% senior secured notes due 2027 shaved off ¼ point to close at 100¾ bid.

By the end of the day, about $29 million of the notes traded.

In the retail space, the Columbus, Ohio-based department store name’s new dual issuance saw weakness.

The 9 3/8% senior paper due 2025 chalked off 1 point to close at 106½ bid. The 6 5/8% senior secured notes due 2025 lost ½ point to close at 104½ bid.

The two tranches combined saw about $35 million exchanged.

“There were a few names that were left out of the positive wave,” a trader said. “There might just not be much of a market for this paper right now.”

PG&E gains

During the Monday session, PG&E’s notes were seen gaining, market sources said.

The 6.05% senior notes due 2034 rose ½ point to close at 118½ bid.

On Monday morning, the San Francisco-based electric utility said that it expects to pursue underwritten public offerings of common stock and equity units as part of its plan to fund its emergence from Chapter 11, Prospect News reported.

The offerings are expected to generate $5.75 billion in gross proceeds, which PG&E expects to combine with $3.25 billion of proceeds from private sales of common stock to fund its reorganization plans.

The equity units are expected to consist of two components, including a prepaid forward purchase contract to purchase common stock and an undivided beneficial interest in specified U.S. Treasury securities.

News of the financing package broke late last week, following a California regulator’s decision to approve its restructuring plan.

Realogy varies

While the company prepped a new issue, property name Realogy’s established issues saw varying movements, traders said.

The 4 7/8% senior paper due 2023 tacked on ½ point. The 9 3/8% senior paper due 2027 chalked off ¾ point to close at 95½ bid.

During the Monday session, the Madison, N.J.-based real estate services name announced that its indirect, wholly owned subsidiary Realogy Group LLC is planning a new offering of $400 million of senior secured second-lien notes due 2025 for Tuesday morning.

The company plans to redeem its $400 million of 5¼% senior notes due 2021 with the proceeds.

Moody’s Investors Service described the new issuance as positive for liquidity but credit negative.

Indexes

Two high-yield indexes started the week with gains.

The KDP High Yield Daily index rose 32 basis points on Monday, finishing the day at 67.12 with the yield contracting to 5.84%.

The index was up 51 bps on Friday, 28 bps on Thursday, 60 bps on Wednesday and 41 bps last Tuesday.

The ICE BofAML US High Yield index picked up 28.7 bps with the year-to-date return ending at 2.298%.

The index jumped up 191 bps on Friday, 28 bps on Thursday, 60 bps on Wednesday and 41 bps on Tuesday.

$1.35 billion Friday inflows

The dedicated high-yield bond funds saw $1.35 billion of net daily inflows on Friday, according to a market source.

High-yield ETFs saw $1.214 billion of inflows on the day.

Actively managed high-yield funds saw $135 million of inflows on Friday, the source said.

© 2015 Prospect News.
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