Oasis Petroleum, NXP deals price; new Oasis bonds firm; new Whiting paper heavily traded

By Paul Deckelman and Paul A. Harris

New York, Sept. 10 - Oasis Petroleum, Inc. came to market on Tuesday with a greatly upsized $1 billion drive-by offering of 8.5-year notes, high-yield syndicate sources said. The exploration and production company's megadeal was heard by traders to have moved up solidly when it reached the aftermarket.

The session also saw Dutch semiconductor manufacturer NXP BV price a quickly shopped $500 million issue of three-year notes, which was not seen immediately trading around.

Another European manufacturer - automaker Peugeot SA - weighed in with a €600 million issue of 5.25-year notes.

Traders said that Whiting Petroleum Corp.'s upsized $1.9 billion two-part deal from Monday - priced too late that session for any kind of aftermarket - made up for it with a vengeance on Tuesday, as both tranches of new paper were among the most actively traded credits in Junkbondland.

There was also brisk activity - though not much price movement - in last Wednesday's issue of five-year notes from notes from lender and online banking firm Ally Financial Inc. Another Wednesday deal - Regency Energy Partners LP - was seen moving up a little after a rocky start in the secondary arena.

Apart from the priced deals, primaryside players saw considerable calendar activity. Among other names, insurance broker Hub International Ltd. and real estate investment trust DuPont Fabros Technology, Inc. announced upcoming bond deals, as did Ancestry.com Holdings LLC.

Interactive entertainment publishing company Activision Blizzard, Inc. was heard by the syndicate sources to have downsized its planned bond deal to $2.25 billion and to have eliminated one of its originally announced three tranches.

Traders said the secondary market away from the new deals was mostly dull.

Statistical market performance indicators turned higher across the board after having been mixed on Monday.

Oasis massively upsized

As was the case on Monday, Tuesday's session in the new issue market saw a heavy news flow.

Two deals priced as a pair of issuers brought single-tranche transactions totaling $1.5 billion.

One of the two deals was upsized, and both priced in the middle of talk.

Oasis Petroleum priced a massively upsized $1 billion issue of 8.5-year senior notes (B3/B) at par to yield 6 7/8%.

The deal was upsized from $600 million.

The yield printed in the middle of the 6¾% to 7% yield talk.

The $1 billion transaction played to $3.3 billion of orders, according to a buyside source.

A trader reported seeing the new Oasis Petroleum 6 7/8% notes due March 2022 trading in a context of 101½ bid, 102 offered.

Wells Fargo was the left bookrunner. Citigroup, JP Morgan and RBC were the joint bookrunners.

NXP prints at 3½%

Netherlands-based NXP BV and NXP Funding LLC priced a $500 million issue of non-callable three-year senior notes (B3/B+) at par to yield 3½%, also in the middle of talk.

Barclays, BofA Merrill Lynch, Goldman Sachs and KKR were the joint bookrunners for the debt refinancing.

Activision restructures

Activision Blizzard downsized and restructured its bond deal on Tuesday.

The restructured two-part bond deal was downsized to $2.25 billion from $2.5 billion, with $250 million of the proceeds shifted to the company's term loan.

Now an all high-yield trade, a $1 billion tranche of investment grade-rated senior secured notes was withdrawn.

Both of the remaining senior notes tranches (expected ratings Ba2/BB+) were upsized, and price talk was circulated.

An upsized $1.5 billion tranche of eight-year notes, which come with three years of call protection, is talked to yield 5¾% to 6%. The eight-year notes tranche was upsized from $1 billion.

An upsized $750 million tranche of 10-year notes, which come with five years of call protection, is talked at 6¼% to 6½%. The 10-year notes tranche was upsized from $500 million.

The deal, which is being led by bookrunners J.P. Morgan and BofA Merrill Lynch, is set to price on Wednesday.

Hub rolls out $1.035 billion

The forward calendar saw another substantial buildup on Tuesday.

"They seem to be jamming in the deals," a trader commented, expressing the belief that if the Federal Reserve's Federal Open Market Committee announces that it will meaningfully "taper" its bond buying program when it meets on Sept. 17 and 18, the new issue market could see a substantial decrease in volume.

Dealers and issuers may be trying to get business in ahead of that, the trader said.

On Tuesday, Hub International announced plans to sell $1.035 billion of eight-year senior notes during the week ahead.

BofA Merrill Lynch is the left bookrunner for the buyout deal. Morgan Stanley, RBC, Macquarie, BMO and UBS are the joint bookrunners.

DuPont Fabros roadshow

DuPont Fabros Technology began a roadshow on Tuesday for a $600 million offering of eight-year senior notes (expected ratings Ba1/BB) in a deal expected to price by the end of the present week.

Goldman Sachs, RBC, SunTrust, Credit Suisse and KeyBanc are the joint bookrunners for the debt refinancing.

PRA starts Wednesday

PRA International plans to start a roadshow on Wednesday for its $375 million offering of 10-year senior notes, which are set to price during week ahead.

Credit Suisse, Jefferies, UBS, KKR and Citigroup are joint bookrunners for the LBO deal.

Prospect Mortgage five-years

Prospect Mortgage plans to start a roadshow on Wednesday for a $200 million offering of five-year senior notes in another deal is set to price during the week ahead.

Credit Suisse and BofA Merrill Lynch are the joint bookrunners.

The Sherman Oaks, Calif.-based full service mortgage company plans to use the proceeds to fund growth through expanding retail and correspondent origination channels and to fund associated working capital, retain and acquire mortgage servicing rights, and to fund a special dividend.

Ancestry.com PIK deal

Ancestry.com Holdings plans to price a $250 million offering of five-year senior PIK toggle notes on Wednesday.

Morgan Stanley, Credit Suisse, Deutsche Bank, Goldman Sachs and RBC are the joint bookrunners.

The Provo, Utah-based online family history resource plans to use the proceeds to pay cash dividends on-, or make other payments with respect of the issuer's equity interests.

Given its size and the fact that the dealers definitely are reaching out to high-yield investors with the high-grade deal from Verizon Communications Inc., there were more questions than answers during calls with sources around the junk market.

The deal appears to generally be the provenance of the high-grade trading desks, sources said.

Of calls that one trader fielded, there was a smattering of high-yield investors calling to inquire whether other high-yield investors appeared to be taking part.

"It's going to be big," the trader said, adding that the combined eight tranches are expected to come to an overall total of $45 billion to $49 billion and appear to be playing to an order book well in excess of $100 billion.

Peugeot drives by

The Tuesday session also saw headlines in Europe.

French car manufacturer Peugeot launched and priced a €600 million issue of 6½% senior notes due Jan. 18, 2019 (B1/BB-) at 99.366 to yield 6 5/8%.

The yield printed at the tight end of yield talk set in the 6¾% area.

The quick-to-market deal, which was announced at size-range of €500 million to €600 million, played to €3.25 billion of orders, an informed source said.

BNP Paribas, Credit Agricole CIB, HSBC, Natixis and SG CIB were the active bookrunners.

BBVA, Commerzbank, Lloyds and Santander were the passive bookrunners.

HSBC will bill and deliver.

Meanwhile, Polish Television Holding BV (PTH) plans to price a €300 million offering of seven-year senior secured PIK toggle notes (expected /B-/) on Wednesday.

Joint bookrunner JPMorgan will bill and deliver for the debt refinancing deal. Deutsche Bank and Nomura are also joint bookrunners.

PTH is the parent of TVN, which priced a €430 million issue of 7 3/8% senior notes (B1/B+/) due 2020 at par to yield 7.378% last Friday.

Oasis trades up

In the secondary market, the new Oasis Petroleum 6 7/8% notes due 2022 were seen by a trader having firmed to around the 101¼ bid mark.

That was well up from the par level at which the Houston-based independent oil and natural gas exploration and production company's quickly shopped and greatly upsized deal had priced.

He noted that he saw no aftermarket activity in semiconductor manufacturer NXP' 3½% notes due 2016, owning to the late hour and the sparse coupon.

Whiting actively traded

Monday's big two-part offering from Whiting Petroleum was seen by a market source to be near or even perhaps right at the top of the new-deal arena's most-actives list.

He saw the Denver-based oil and gas company's $1.1 billion of 5% notes due 2019 having traded as high as 102 bid, well up from the par issue price, on mid-afternoon volume of nearly $48 million.

And he saw its $800 million of 5¾% notes due 2021 at 100¼ bid, with over $40 million of the new issue having changed hands. Those bonds too had priced at par.

However, a second trader was more conservative in his estimates, particularly in terms of the 2019 notes. He pegged the latter credit in a par to 100¾ bid context and saw the same levels in the 2021 bonds as well.

A third trader said the '19s "were wrapped around par," at 99 7/8 bid, 100 1/8 offered, while the 2021s were at 99¾ bid, par offered.

Ally is active

Going back to the deals that priced last Wednesday, a trader said that Ally Financial's 4¾% senior guaranteed notes due 2018 traded as high as 102½ bid, on volume approaching $14 million.

This was up substantially from the previous quoted levels for the Detroit-based automotive and mortgage lender and online banking company's quick-to-market $750 million deal, which had priced at 99.123 to yield 4.95% and was then seen over the next few sessions trading between 99 1/8 and 1001/2.

At another desk, those bonds were quoted as mostly holding in a narrow range parked right around par on volume of over $12 million.

Regency rallies

A trader said that Regency Energy Partners' 5¾% notes due 2020 seemed to be trading at better levels Tuesday, after having taken their lumps after pricing last Wednesday at par.

He noted that after the pricing of the Dallas-based natural gas master limited partnership's $400 million issue - downsized from an originally announced $500 million - they fell as low as 98½ bid in the aftermarket.

However, he said that "the last three days, the market seemed a little stronger in our world. So I've got to believe that they are [back up to] right around new-issue, or maybe 99-par, right around that range."

HD Supply sees activity

Away from the new junk deals, a trader noted that there was some activity going on in the bonds of HD Supply Holdings, Inc., an Atlanta-based distributor of tools and other industrial products to the construction, building maintenance and water supply industries, which reported fiscal second-quarter results.

The company's 11½% notes due 2020 eased by about a ½ point to 118½ bid on round-lot volume of over $7 million, plus additional smaller off-lot trades.

The company's 8 1/8% senior secured first-lien notes due 2019 were down about a ¼ point at 111¼ bid, on volume of over $3 million.

Its Nasdaq-traded shares meantime plunged as much as 14% in intraday dealings before finally ending down $2.78, or 11.24%, at $21.97, on volume of 9.5 million shares, almost five times the norm.

Although the company's adjusted per-share earnings of 23 cents beat analysts' expectations of around 20 cents per share of earnings, its revenue numbers - while up from a year ago - missed the estimates. Analysts also noted disappointing full-year guidance, particularly on the revenue front.

The company also noted during its conference call that capital markets transactions during the quarter and earlier in the year had allowed it to solidly lower debt and interest costs and extend its maturities out to 2017 at the earliest.

Waiting for Verizon

Away from those specific names, a trader said that there was "nothing crazy" going on, adding, "I guess everybody is waiting for their allocations for this Verizon thing," referring to the telecommunications giant's massive upcoming multi-part deal.

The issue is expected to price Wednesday and could see some interest from high-yield accounts despite its nominally investment-grade status.

"That was the only thing going on," he opined.

He said he spoke to a few junk accounts and their view was that "the secondary world is pretty much quieting off - it's all geared to new issues."

Market indicators turn upward

Statistical junk market performance indicators turned higher across the board on Tuesday, after having been mixed on Monday.

The Markit Series 20 CDX North American High Yield Index gained 9/32 of a point on Tuesday to end at 105 1/16 bid, 105 3/16 offered, its third consecutive gain. This was the first close above the 105 mark since Aug. 14, when it finished at 105 1/32 bid, 105 3/32 offered. On Monday, it had improved by 11/16 of a point.

The KDP High Yield Daily index rose by 4 basis points to finish at 73.22, after having lost 1bp on Monday. Its yield, meanwhile, came in by 2 bps on Tuesday, to 6.32%, after having been unchanged at 6.34% for the two previous sessions.

And the widely followed Merrill Lynch High Yield Master II gained 0.017%, its third straight advance, after having risen 0.133% on Monday.

The rise brought the index's year-to-date return up to 2.902% from Monday's level of 2.885%. Those returns remained well down from the index's peak level for the year so far of 5.835%, recorded on May 9, though they were still up solidly from its 2013 low point of 0.384%, set on June 25.

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