Morning Commentary: Molina, Franchise Group on deck; secondary tone improves

By Abigail W. Adams

Portland, Me., Nov. 2 – While the domestic high-yield primary market slowed its pace on the eve of the U.S. election, the deal-making continued with two offerings on deck.

Molina Healthcare Inc. plans to price $650 million of 10-year bullet notes (Ba3/BB-) in a Monday drive-by. Early whispers have the notes coming in the low to mid-4% area, according to a market source.

The notes are pricing just wide of Molina’s 4 3/8% senior notes due 2028, which trade with a 3¾% yield, a source said.

The deal is coming amid an elevated amount of volatility surrounding the election.

However, the Long Beach, Calif.-based managed health care service provider is a solid credit with the name well-liked by investors, a source said.

While there has been no official update on the deal, Franchise Group Inc. is rumored to be pricing its $650 million offering of five-year senior secured notes on Monday.

Pricing was initially slated for Friday.

Latest talk has the deal coming with an 8¼% yield, a source said.

While timing of the deal is uncertain, Inspire Brands Inc. announced its intention over the weekend to fund its $8.8 billion acquisition of Dunkin Brands, in part, through the issuance of senior secured notes, a source said.

Meanwhile, the tone in the secondary space improved substantially as the market braces for the U.S. presidential election on Tuesday.

The cash bond market was up ¼ point, and ETFs were circulating some offers-wanted-in-competition lists, a source said.

“They are buyers for the first time in a long time,” a source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.