IPL Plastics eyes offering; New Fortress firm; American Airlines varies; Carnival eyed; Revlon diverges

By James McCandless and Paul A. Harris

San Antonio, Aug. 24 – As the Aug. 24 week got underway there was a sole deal parked on the calendar, while the high-yield secondary market opened the week with a focus on new issues and travel names.

IPL Plastics Inc. is scheduled to have a roadshow for a $450 million offering of eight-year senior secured notes (B3) through Tuesday.

New notes priced by New Fortress Energy Inc. were seen pushing higher than par after coming to market last week.

Meanwhile, American Airlines Group Inc.’s and United Airlines Holdings, Inc.’s issues trended higher on news of a potential coronavirus treatment.

Also in the travel space, Carnival Corp. & plc’s paper saw mixed results.

In retail, Revlon, Inc.’s paper diverged after extending the early deadline for an exchange offer.

Sparse primary

As the Aug. 24 week got underway there was a sole deal parked on the calendar.

IPL Plastics is scheduled to have a roadshow for a $450 million offering of eight-year senior secured notes (B3) through Tuesday.

The deal is in the market with initial price talk in the high 6% area to 7%.

Beyond that the active calendar stood empty at Monday's close.

New issue activity is expected to remain muted through the remainder of the month, sources say.

However the Dog Days of August are seldom completely dormant in the primary market, market sources point out.

It is, for example, a period during which off-the-run issuers, with stories for which investors traditionally have a limited amount of patience, might attempt to raise cash, when there is little else making a play for the market's attention.

New Fortress firm

New notes priced by Fortress Energy were seen pushing higher on Monday, traders said.

The 6¾% senior secured notes due 2025 reached up ¼ point to close at 101¼ bid.

$18 million of the notes were on the tape as the afternoon ended.

The New York-based energy infrastructure company’s upsized $1 billion issue priced last Wednesday.

Initially, the issue size was $800 million with yield talk in the 6 7/8% area.

“I think it could move as high as 102, somewhere in that context,” a trader said. “I don’t think it’ll get much higher than that.”

AA varies, United up

Meanwhile, American Airlines’ issues varied in direction to lead off the week, market sources said.

The 11¾% senior notes due 2025 added ½ point to close at 95¼ bid. The 5% senior notes due 2022 dipped 1 point to close at 62½ bid.

The Fort Worth-based air carrier’s structure, along with much of the travel sector, saw positivity as the market expressed optimism over news of a potential coronavirus treatment.

Over the weekend, the Food and Drug Administration announced that it had granted an emergency use authorization for convalescent plasma as a treatment for Covid-19.

Last week, the company announced that it would cancel flights to 15 U.S. airports in October, affecting more than 700 flights.

Chicago-based sector peer United Airlines’ paper picked up steam

The 5% senior paper due 2025 grabbed ½ point to close at 87¾ bid. The 4¼% senior paper due 2022 rose 1¼ points to close at 92¾ bid.

Carnival diverges

Also in the travel space, Carnival’s notes yielded mixed results, traders said.

The 11½% notes due 2023 held level to close at 109½ bid. The 10½% notes due 2026 rose ¾ point to close at 103 bid.

The Miami-based cruise operator was another company to see a positive trend after the FDA’s coronavirus news.

The cruise industry has been one of the hardest hit by the pandemic as travel mandates continue to hamper demand.

Earlier in the month, the name said that it would resume some European routes in September and U.S. routes in October.

Revlon diverges

Meanwhile, in retail, Revlon’s issues diverged, market sources said.

The 5¾% senior notes due 2021 declined by 1¾ points to close at 20 bid. The 6¼% senior notes due 2024 tacked on ¾ point to close at 17½ bid.

On Monday morning, the New York-based cosmetics maker announced that the early tender deadline and the expiration time for Revlon Consumer Products Corp.’s private exchange offer and consent solicitation for its 2021 notes have been further extended to 11:59 p.m. ET on Sept. 11, Prospect News reported.

The company is exchanging the 2021 notes for 5¾% senior notes due 2024.

As of Aug. 21, about $20,326,000 aggregate principal amount have been tendered for exchange.

Last week, Citibank sued some lenders to the name in its effort to recover $900 million that it mistakenly distributed.

Indexes up

Two high-yield indexes kicked off the week with improvements.

The KDP High Yield Daily index rose 8 basis points on Monday to close at 66.83 with the yield declining to 5.49%.

The index gained 3 bps on Friday, garnered 1 bps on Thursday and lost 1 bps on Wednesday.

The ICE BofAML US High Yield index improved by 29.2 bps with the year-to-date return closing at 0.206%.

The index tacked on 4.4 bps on Friday, shaved off 4.3 bps on Thursday and. gained 3.7 bps on Wednesday.

© 2015 Prospect News.
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