Worldpay prices in junkland; Syneos gains continue; Medical Properties jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 20 – Worldpay’s offerings of junk bonds and loans were well-received with $20 billion equivalent of demand across both offerings, a source noted.

The bond deal priced on Wednesday, as scheduled, and final terms were still pending at press time.

The dollar-denominated bonds were noted as trading in the grey, at par ¾ to 101, by a source.

Meanwhile, it was a relatively flat day in the secondary space on Wednesday as the Federal Open Market Committee made their rate-hike announcement.

The market was slightly softer after the Fed held rates steady but penciled in an additional rate hike before the year draws to a close.

However, the bond market was stable compared to the selling in equities on the heels of the announcement as chair Jerome Powell’s press conference wielded few surprises, a source said.

While the broader secondary space was quiet as market players awaited clues about the Fed’s path forward, new issues remained in focus and continued to put in strong performances in the secondary space.

Syneos Health Inc.’s 9% senior secured notes due 2030 (B1/B/BB) continued to notch gains after a strong break.

Outside of new paper, Medical Properties Trust Inc.’s senior notes (Ba1/BB+) were once again in focus with the notes reversing a more than month-long downtrend to claim the title of largest gainer of the session.

Syneos gains continue

Syneos’ 9% senior secured notes due 2030 continued to log gains after a strong break with the notes breaking above a 101-handle.

The 9% notes added ¼ point to trade in the 101½ to 102 context heading into the market close, a source said.

There was $86 million in reported volume.

Syneos’s bonds became the latest in a series of issues to buck the previous trend of new issues falling flat or trading to nominal premiums in the aftermarket.

Pricing was starting to cheapen, leaving new issues more room to move in the secondary, a source said.

Star Parent, Inc. priced a downsized $1 billion, from an initial $1.7 billion, issue of the 9% notes at par on Tuesday in support of the leveraged buyout of Syneos.

The yield printed tighter than talk for a 9¼% to 9½% yield but in line with initial guidance in the 9% area.

Medical Properties jumps

Medical Properties’ senior notes were among the major gainers of Wednesday’s session with the notes reversing a month-long downtrend.

The REIT’s 5% senior notes due 2027 jumped more than 2 points to a 76-handle.

They were trading in the 76 to 76½ context heading into the market close with the yield about 12 5/8%, a source said.

There was $15 million in reported volume.

The notes had strong buying interest on Wednesday after trading down to a 74-handle the previous session, marking the lowest level of the year for the notes.

The 5½% senior notes due 2026 gained 1½ points to trade up to an 83-handle.

The notes were trading in the 83½ to 83¾ context heading into the market close with the yield about 12¼%.

There was $9 million in reported volume.

The notes were wrapped around 82 heading into Wednesday’s session, also a new annual low for the notes.

While volume was lighter, Medical Properties’ 3½% senior notes due 2031 also bounced about 2¼ points to close the day wrapped around 62 with the yield about 11 1/8%, a source said.

The notes traded down to a 59-handle, their lowest level of the year the previous session.

Medical Properties has been under pressure since a Wall Street Journal article released mid-August questioned regulatory approval of a financing transaction with its third-largest tenant Prospect Medical Holdings.

Fund flows

High-yield ETFs had $110 million of daily cash inflows on Tuesday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds sustained $20 million of outflows on the day, the source said.

Indexes

The KDP High Yield Daily index added 3 basis points to close Wednesday at 50.09 with the yield 7.63%.

The index was down 13 basis points on Tuesday and 5 bps on Monday.

The ICE BofAML US High Yield index gained 7.2 bps with the year-to-date return now 6.938%.

The index was down 16.9 bps on Tuesday and 6.4 bps on Monday.

The CDX High Yield 30 index was down 17 bps to close Wednesday at 102.58.

The index was down 8 bps on Tuesday and 4 bps on Monday.

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