BMC prices; Live Nation, Power Solution, Boyd gain in secondary; Uber, Outfront Media lag

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 14 – The domestic high-yield primary market slowed its pace on Thursday after the torrent of new paper that hit the drive-by window in the previous session.

BMC Software priced an upsized $1.35 billion equivalent three-tranche offering. Olin Corp. priced a $500 million offering of five-year senior bullet notes (Ba3/BB-) after the market closed.

In another crossover, Antares Holdings LP priced an upsized $215 million issue of five-year senior notes (//BBB-) off the investment-grade desk but with a high-yield execution.

The European primary market also saw some action with Rubis Terminal Infra pricing a €410 million issue of five-year senior secured notes (B1/B+).

Meanwhile, the torrent of new paper from Wednesday’s session dominated activity in the secondary space on Thursday, which was a volatile day for the market.

While the secondary space opened the day with losses, it pared those losses heading into the close and ended the day largely flat, a source said.

The majority of new deals followed suit – they opened the day lower but gained strength into the market close.

However, Uber Technologies Inc.’s 7½% senior notes due 2025 (B3/CCC+) and Outfront Media Capital LLC and Outfront Media Capital Corp.’s 6¼% senior notes due 2025 (B2/B+) remained weak throughout Thursday’s session.

Goodyear Tire & Rubber Co.’s 9½% senior notes due 2025 (B2/B+/BB-) fell flat in active trading.

However, Live Nation Entertainment, Inc.’s 6½% senior notes due 2027 (Ba2/BB-), Boyd Gaming Corp.’s 8 5/8% senior notes due 2025 (Caa1/B-) and Power Solutions’ 6¾% senior notes due 2025 (B/B+) were putting in strong performances.

While the secondary market was beginning to show signs of weakness, money continued to enter the space with dedicated funds seeing another multibillion-dollar inflow.

High-yield mutual and exchange-traded funds had inflows of $4.49 billion for the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow report.

BMC Software prices, trades up

A relatively quiet Thursday in the primary market saw BMC Software price an upsized $1.35 billion equivalent amount of senior secured notes in three tranches.

The deal, which had been in the market since late last week, included an upsized $600 million tranche of 7 1/8% first-lien notes due Oct. 2, 2025 which priced at par to yield 7.122%. The tranche size increased from $500 million. The yield came tight to the 7 1/8% to 7¼% yield talk.

The deal, which was upsized from $1.25 billion equivalent, also included €370 million of 6½% first-lien notes due Oct. 2, 2025 which priced at par to yield 6.497%, tight to the 6½% to 6 5/8% yield talk.

BMC Software also priced a $350 million tranche of 9 1/8% second-lien notes due March 1, 2026 at par to yield 9.119%, tight to the 9 1/8% to 9¼% yield talk.

Both dollar-denominated tranches were trading well, as Thursday's session came to a close, according to a bond trader in New York.

The second-lien notes were trading at 101¾, while the first-lien notes were 101¾ or better, the trader said.

More primary activity

Elsewhere, Olin Corp. sold a $500 million offering of five-year senior bullet notes (Ba3/BB-) to yield in the 9½% area.

The notes priced with a 9½% coupon at 99.5 to yield 9.626%, at the wide end of talk.

In Europe, France-based Rubis Terminal Infra priced a €410 million issue of five-year senior secured notes (B1/B+) at par to yield 5 5/8%.

Rubis pricing tightened while the deal was in the market, according to a European sellside source who added that the Rubis story, which involves providing much needed storage for the glut of petroleum awaiting refiner capacity that has been crimped by the pandemic, was a fairly easy story for European high-yield investors to like.

Meanwhile, Antares Holdings priced an upsized $215 million issue of five-year senior notes (//BBB-) at par to yield 8½%.

The notes priced on the investment-grade syndicate desk, but came with high yield-style price talk, at a yield instead of a spread.

In this case the deal, which was upsized from $200 million, priced on top of the 8½% talk.

Uber weakens

While Uber’s new 7½% senior notes due 2025 were trading with a premium after breaking for trade on Wednesday, they gave up their gains and sank below par on Thursday.

The notes traded in a range of 99¼ to 99¾ on Thursday with the final prints between 99¼ and 99½, a market source said.

The notes were active with more than $38 million in reported volume.

The notes were marked at par ½ bid, 101 offered after breaking on Wednesday, a source said.

Uber priced an upsized $900 million issue of the 7½% notes at par in a Wednesday drive-by.

The issue size increased from $750 million.

The yield printed in the middle of yield talk in the 7½% area and tight to the 7½% to 7¾% initial guidance.

Outfront below par

Outfront Media’s 6¼% senior notes due 2025 were also struggling in the aftermarket.

The notes were trading in a range of 99 to par with the majority of prints between 99 to 99 5/8, a source said.

The notes had $21 million in reported volume.

The notes also struggled after breaking for trade on Wednesday and were marked at 99¾ bid, par ¼ offered, a source said.

While Outfront Media is incorporated as a real estate investment trust, which has a special tax incentive, the company specializes in outdoor advertising through billboards and transit displays.

“People are staying away from advertising related revenue,” a market source said.

The coupon was also low for the credit, the source said.

Outfront Media priced a $400 million issue of the 6¼% notes at par in a Wednesday drive-by.

The yield printed in the middle of yield talk in the 6¼% area and in line with early guidance in the low-to-mid 6% area.

Goodyear flat

While Goodyear’s 9½% senior notes due 2025 lagged their issue price in intraday activity, they closed Thursday largely flat, a market source said.

The 9½% notes traded as low as 98½ amid the sell-off early in the session.

However, they pared their losses as the session progressed and were wrapped around par heading into the market close, a source said.

The notes were among the most actively traded of Thursday’s session with $77 million in reported volume.

The notes fell flat despite their relatively large coupon.

The tire company was taking a hit alongside the auto industry due to a decrease in travel-related demand, a source said.

Goodyear priced a $600 million issue of the 9½% notes at par in a Wednesday drive-by.

The yield printed in the middle of yield talk in the 9½% area and in line with early guidance in the mid-9% area.

Live Nation at a premium

While several of Wednesday’s drive-by deals were struggling in the aftermarket on Thursday, others were putting in strong performances.

While the notes briefly dipped below par, Live Nation Entertainment’s 6½% senior notes due 2027 roared into the market close.

The notes traded in a range of 99 7/8 to 101 during Thursday’s session with the final prints between par ¾ to 101, a source said.

With more than $117 million in reported volume, the notes were the most actively traded in the secondary space.

Live Nation priced an upsized $1.2 billion issue of the 6½% notes at par in a Wednesday drive-by.

The issue size increased from $800 million.

The yield printed in the middle of yield talk in the 6½% area.

Boyd, Power Solutions do well

Boyd Gaming’s 8 5/8% senior notes due 2025 were also putting in a strong performance.

The 8 5/8% notes continued to trade on a 101-handle heading into Thursday’s close, a source said.

The bonds had more than $51 million in reported volume.

The notes saw a strong break and were marked at 101¼ bid soon after pricing on Wednesday.

Boyd Gaming priced an upsized $600 million issue of the 8 5/8% notes at par in a Wednesday drive-by.

The issue size increased from $500 million.

The yield printed at the tight end of the 8 5/8% to 8 7/8% yield talk and inside of initial guidance in the 9% area.

Power Solutions’ 6¾% senior notes due 2025 were also trading at a healthy premium on Thursday.

The notes were changing hands in a range of par 1/8 to 101¼ with the final prints between par 7/8 to 101, a market source said.

The bonds had more than $54 million in reported volume during Thursday’s session.

Power Solutions priced a $500 million issue of the 6¾% notes at par in a Wednesday drive-by.

The yield printed at the tight end of the 6¾% to 7% yield talk and tight to early guidance in the high 6% to 7% area.

Indexes soft

Indexes were again soft on Thursday.

The KDP High Yield Daily index dropped 40 basis points to close Thursday at 62.52 with the yield now 7.53%.

The index was down 19 bps on Wednesday, gained 19 bps on Tuesday, and dropped 10 bps on Monday.

The ICE BofAML US High Yield index dropped 60.1 bps with the year-to-date return now negative 9.801%.

The index was down 42.6 bps on Wednesday, gained 42.8 bps on Tuesday and was largely flat on Monday, shaving off 0.4 bps.

The CDX High Yield 30 index shaved off 3 bps to close Thursday at 92.89. The index plummeted 122 bps on Wednesday and was down 13 bps on Tuesday and 24 bps on Monday.

© 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.