Alliance Data, Capsugel add-on, Clearwater total $1.32 billion; funds plunge $2.38 billion

By Paul Deckelman and Paul A. Harris

New York, July 24 – A trio of drive-by deals dominated the high-yield primary sphere on Thursday, syndicate sources said, accounting for $1.32 billion of new dollar-denominated, fully junk-rated paper.

The largest transaction of the day came from Alliance Data Systems Corp., which came in with an upsized $600 million of eight-year notes.

Capsugel SA did a $415 million add-on to its existing 2019 PIK toggle notes.

And Clearwater Paper Corp. priced a $300 million 10.5-year issue.

Traders said that both the Alliance Data and the Capsugel issues firmed from their respective issue prices, but they did not see any aftermarket activity in Clearwater owing to the lateness of the hour at which it finally priced.

The three drive-by issues continued a trend of opportunistically timed and quickly shopped issues such as those already brought to the market this week by Regency Energy Partners LP on Tuesday and Micron Technology, Inc. on Wednesday.

The latter deal, meanwhile, was heard by traders to have been easily the most heavily traded credit of the day in Junkbondland. The bonds moved up solidly from their issue price. So did Wednesday’s other pricing, Citgo Petroleum Corp., which joined Micron on the day’s Most Actives list.

Statistical market performance indicators were mixed on Thursday.

Another indicator, the flow of cash into or out of high-yield mutual funds and exchange-traded funds, saw its second straight huge loss, the biggest in a year.

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