Morning Commentary: Curo, Masonite on deck as new issue activity expected to wane

By Paul A. Harris

Portland, Ore., Aug. 13 – On the heels of the high-yield new issue market’s biggest week year to date, the pace of issuance is set to taper off, as is customary for mid-to-late August, sources said on Monday.

Issuance in the Aug. 6 week came to $9.83 billion, making it the biggest week of 2018 to date, in terms of dollar-denominated issuance. The market had not seen a bigger weekly total since the week of Dec. 4, 2017, which saw $10.45 billion.

Although Monday's news volume was slower than that of recent sessions, there was news.

Curo Group Holdings Corp. talked its $675 million offering of seven-year senior secured notes (B3/B-) to yield 8% to 8¼%.

Official talk comes on top of initial price talk.

Books close at 2:30 p.m. ET on Monday, and the deal, which was marketed by means of a full roadshow, is set to price thereafter.

Jefferies LLC is the left bookrunner.

The high-yield drive-through also reopened on Monday.

Masonite International Corp. plans to price a $300 million offering of eight-year senior notes in a quick-to-market Monday trade following a late-morning conference call with investors.

Initial price talk has the deal coming to yield in the high 5% to 6% area.

BofA Merrill Lynch and Wells Fargo Securities LLC are the joint bookrunners.

The active forward calendar features one other roadshow deal carried over from the Aug. 6 week.

Frontdoor, Inc. (ServiceMaster Global Holdings, Inc.) has been marketing a $350 million offering of eight-year senior notes (B2/B-).

The deal is set to price on Tuesday.

As the market awaits official talk, early guidance is in the low 7% area, a trader said.

Recent issues

High-yield ETFs were flat to slightly lower on Monday.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was down a nickel, or 0.01%, at $85.89 per share at mid-morning.

Crude oil prices were lower on the day.

The barrel price of West Texas Intermediate crude for September 2018 delivery was off 34 cents, or 0.5%, at $67.29.

Among recent issues, the new Verscend Holding Corp. 9¾% senior notes due August 2026 (Caa2) were up a point on Monday at par ¾ bid, 101¼ offered, a trader said.

The downsized $1.1 billion (from $1.15 billion) deal priced at par on Friday.

And eight-year notes priced recently by Marriott Vacations Worldwide Corp. were up half a point on Monday morning, the trader said.

The Marriott Vacations 6½% senior notes due 2026 (BB-) were par ¼ bid, 101 offered.

The $750 million issue came at par on Thursday.

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