Videotron, Aston Martin, SLM wrap $7 billion week; new Aston Martin active, Chobani gains

By Paul Deckelman and Paul A. Harris

New York, March 31 – The month of March – and the first quarter of 2017 – ended on a busy note in Junkbondland on Friday, with a trio of new deals totaling $1.2 billion priced.

Canadian telecommunications company Videotron Ltd. had the big deal of the day, a quickly shopped $600 million offering of 10-year notes. It was quoted at firmer levels by traders when it hit the aftermarket late in the session.

British luxury automaker Aston Martin brought a $400 million issue of five-year senior secured notes to market via a financing subsidiary as a forward calendar transaction, part of an upsized two-part deal that also included a sterling-denominated tranche. The bonds were among the day’s most actively traded credits, though they retreated from their early peak levels to end only modestly higher.

Financial services concern SLM Corp. priced $200 million of five-year notes. That quick-to-market deal was quoted higher, though on not much volume.

The day’s issuance topped off a week which saw a total of just over $7 billion of new notes price, about twice the volume racked up the week before.

It also closed out a very active month of March, during which over $42 billion of new notes came to market – not only the busiest month of the year so far, but the heaviest new-issuance volume of any month in some 2½ years, according to data compiled by Prospect News.

Away from the new deals that priced during the session Friday, syndicate sources heard that diversified industrial manufacturer Park-Ohio Industries, Inc. would be shopping around a $350 million offering of 10-year notes.

Traders meantime saw active aftermarket dealings in some of the week’s new issues, notably yogurt maker Chobani LLC, whose bonds gained solidly on Friday.

Statistical market performance measures were seen mixed on Friday after three consecutive sessions in which they had been stronger across the board.

Those indicators were ending the week mostly higher than where they were last Friday, when they had lost ground all around week-over week, after having been stronger the week before.

Videotron prices tight

Videotron priced a $600 million issue of 10-year senior notes (Ba2/BB) at par to yield 5 1/8%.

The yield printed at the tight end of the 5 1/8% to 5¼% yield talk.

BofA Merrill Lynch, Scotia, TD and Citigroup were the joint bookrunners for the debt refinancing deal.

Sallie Mae’s five-year bullet

SLM priced a $200 million issue of five-year senior bullet notes (Ba2/BB+) at par to yield 5 1/8%.

The yield printed on top of yield talk.

JP Morgan and RBC were the joint bookrunners.

The Newark, Del.-based financial services company, more commonly known as Sallie Mae, plans to use the proceeds to redeem its 6.97% cumulative redeemable series A preferred stock and for general corporate purposes.

Aston Martin upsizes

Aston Martin Capital Holdings Ltd. launched and priced an upsized £550 million equivalent two-part offering of five-year senior secured notes (B3/B-).

The deal included $400 million of the notes which priced at par to yield 6½% and £230 million which priced at par to yield 5¾%.

The overall amount was increased from £530 million equivalent.

Global coordinator JPMorgan will bill and deliver for the debt refinancing deal. Deutsche Bank and Goldman Sachs were also global coordinators.

BofA Merrill Lynch, HSBC, Morgan Stanley, Standard Chartered and UniCredit were bookrunners.

Orbcomm $250 million secureds

Orbcomm Inc. announced in a Friday press release that it priced $250 million of 8% senior secured notes due 2024.

The Rochelle Park, N.J.-based technology company plans to use the proceeds to repay the $150 million of outstanding loans under its existing $160 million secured credit facilities. Any remaining proceeds will be used for general corporate purposes, including potential future acquisitions.

Park-Ohio sets roadshow

Park-Ohio Industries plans to start a roadshow on Monday for a $350 million offering of 10-year senior notes (existing ratings B3/B), which is expected to price in the middle part of the week ahead.

Barclays is the lead left bookrunner for the debt refinancing deal. JP Morgan and KeyBanc are the joint bookrunners.

Park-Ohio climbs aboard a calendar with a pair of other deals already announced and slated to price during the week ahead.

They include Talen Energy Supply, with $500 million of five-year senior guaranteed notes, and Petra Diamonds Ltd. with $600 million of five-year second-lien secured notes.

The primary market is headed into April with a good tone, and the stage is set for an active month, a debt capital markets banker said on Friday.

Look for the drive-by market to be active during the week ahead, the banker advised.

The next few weeks in the new issue market promise to be pretty active ones, the source added.

A busier week – and month

The just-concluded week was a fairly busy one, with the day’s three issues swelling the weekly volume to $7.08 billion of new U.S. dollar-denominated and fully junk-rated paper from domestic and industrialized-country borrowers, which priced in 13 tranches, according to data compiled by Prospect News.

That was almost double the $3.65 billion which priced in 6 tranches the week before, ended March 24, though still down a little from the $7.8 billion in 16 tranches during the week before that, ended March 17.

The month of March saw an astonishing $42.35 billion of new junk paper price in 71 tranches, the Prospect News data indicated.

It far exceeded the issuance totals seen a year ago, in March 2016, when just $18.47 billion got done in 27 tranches, and handily beat the heaviest-volume month of last year, April 2016, which saw $30.53 billion price in 31 tranches.

March was, in fact, the busiest single month seen in the junk world since September of 2014, when new issuance totaled $45.35 billion in 76 tranches.

The data also indicated that the biggest-ever month for new junk paper was September 2013, when $46.78 billion of high yield notes priced in 65 tranches.

This week’s primary activity meantime raised year-to-date issuance for 2017 so far to $84.16 billion in 148 tranches – well more than double the $33.76 billion which had priced in 53 tranches by this point on the 2016 calendar, the Prospect News data indicated.

Full-year issuance in 2016 finished at $226.78 billion in 359 tranches – which ran 12.9% behind the $260.02 billion which had gotten done in 408 tranches in 2015.

Aston Martin active

In the secondary arena, traders said the new Aston Martin Capital Holdings 6½% senior secured notes were among the day’s busiest, with one estimating total trading volume at nearly $60 million, at least $53 million of which came in big round-lot transactions.

He said that the new bonds gyrated between a low of 100¼ bid and a high of 101½ bid, though he saw the last prints of the day in a 100¼ to 100½ context.

He said that when they were first freed for aftermarket dealings, the bonds had been trading around 101½, well up from the par level at which the Gaydon, England-based auto manufacturer – whose speedy luxury sports cars were prominently featured in a number of the popular James Bond movies – priced its deal.

But after that, he said, “they came down – to 101 to 101 1/8, then to 100 7/8 to 101 and then softer, softer and softer.”

Another trader saw the notes finishing at 100¼ bid.

Among the day’s other issues, one of the traders quoted Montreal-based telecommunications company Videotron’s 5 1/8% notes due 2027 trading between 100½ and 101¼ bid, up from their par issue price, with over $13 million changing hands.

He saw financial services company SLM Corp.’s 5 1/8% notes due 2022 moving up to a 101 to 101¼ bid range, but said that only “around $2 million” had traded by late in the afternoon.

Chobani bonds better

Among the recently priced issues, Norwich, N.Y.-based yogurt maker Chobani LLC’s 7½% notes due 2025 were seen by a market source to have moved up by 1 full point in Friday’s dealings on top of their already robust gains notched in initial trading after pricing on Thursday.

He pegged the bonds at 102½ on volume of more than $24 million.

Chobani and its Chobani Finance Corp. subsidiary priced $530 million of the notes at par on Thursday in a regularly scheduled forward calendar transaction.

When they were freed to trade, they were seen having pushed as high as 101¾ bid by the close Thursday, with over $28 million having changed hands.

Indicators turn mixed

Statistical market performance measures were seen mixed on Friday, after three consecutive sessions during which they had been stronger across the board.

The indicators were mostly higher than where they were last Friday, when they had lost ground all around versus the week before.

The KDP High Yield Daily Index rose by 4 basis points on Friday, its fourth straight gain, finishing at 71.82, after jumping by 16 bps on Wednesday and then zooming another 22 bps on Thursday.

Its yield came in by 1 bp, to 5.28%. its sixth consecutive tightening. It narrowed by 9 bps on Thursday.

Those levels compared favorably with last Friday’s 71.36 index reading and 5.45% yield.

The Markit CDX Series 28 High Yield Index was marginally lower on Friday, finishing at 107 5/32 bid, 107 7/32 offered, after gaining 1/8 point on Thursday, its third straight advance.

Friday’s close was not directly comparable to last Friday’s because the index underwent its regular semi-annual “roll” into a new series during the week, with a new roster of credit default swaps contracts followed.

© 2015 Prospect News.
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