Ascend Learning prices; CommScope, Clear Channel improve; Bristow losses intensify; Springleaf jumps

By Paul A.Harris and Abigail W.Adams

Portland, Me., Feb.12 – The high-yield primary market saw one deal price during Tuesday’s session with the one deal remaining on the forward calendar expected to price on Wednesday.

Ascend Learning, LLC priced an upsized $350 million issue of 6 7/8% mirror notes due Aug.1, 2025 (Caa2/CCC) at 95.00 to yield 7.878%.

Getty Images Inc.is expected to price its $400 million offering of eight-year senior notes during Wednesday’s session.

Meanwhile, the secondary space was strong on Tuesday with the market climbing about ¼ point as equities rallied and crude oil futures spiked.

New paper from CommScope Inc.and Clear Channel Outdoor Holdings, Inc.were riding the strength of the market with the notes improved in high-volume activity.

While the overall market was up, Bristow Group Inc.’s 6¼% senior notes due 2022 intensified their losses on Tuesday with the notes shaving off double digits as the company’s 8¾% notes due 2023 saw a slight rebound.

Springleaf Finance Corp.’s 7 1/8% senior notes due 2026 (B1/B+) jumped in high-volume activity on Tuesday following a ratings upgrade.

Ascend prices rich

Ascend Learning priced an upsized $350 million issue of 6 7/8% mirror notes due Aug.1, 2025 (Caa2/CCC) at 95.00 to yield 7.878% on Tuesday.

The issue price came at the rich end of price talk in the 94.5 area and rich to initial talk of 93 to 94.

The deal went well, playing to an order book that was in good shape, sources said.

Barclays was the left lead bookrunner.

The Burlington, Mass.-based provider of educational content, software and analytics solutions plans to use the proceeds to fund a dividend to its shareholders and to put cash on its balance sheet.

The only other deal on the active calendar at Tuesday's close was Getty Images’ $400 million offering of eight-year senior notes (S&P: CCC+).

It's expected to price on Wednesday, sources say.

As the market awaits official price talk, initial guidance has the deal coming to yield in the 10½% area.

Trailing last Thursday's massive $6.25 billion of issuance, the biggest single day in the primary market since March 2017, the new issue market has been quiet.

However, it is poised to become more active as potential issuers clear capital markets blackout periods related to reporting earnings for the last quarter of 2018, sources say.

CommScope improves

CommScope’s three tranches of recently priced senior notes were improved on Tuesday with the notes riding the strength of the overall market.

CommScope’s 6% senior notes due 2026 were quoted at par 7/8 bid, 101 3/8 offered mid-morning, according a market source.

They traded up ¾ point to 101¼ with more than $28 million of the bonds on the tape by the late afternoon.

CommScope’s 5½% senior notes due 2024 were also quoted at par 7/8 bid, 101 3/8 offered. They traded up ½ point to 101 1/8 with more than $24 million on the tape by the late afternoon.

CommScope’s 8¼% senior notes due 2027 were quoted at 102¼ bid, 102¾ offered.

They traded up ¾ point to 102¾ with more than $24 million on the tape by the late afternoon, according to a market source.

CommScope priced an upsized $3.75 billion of senior notes over three tranches last Thursday with each tranche pricing at par.

Tuesday marked the highest levels for the notes since they hit the secondary space.

Clear Channel improves

Clear Channel’s 9¼% senior notes due 2024 continued to shoot higher on Tuesday, riding the strength of the overall market, according to a market source.

The 9¼% senior notes also reached their highest level since hitting the secondary space.

They were quoted at 103¼ bid, 103¾ offered and traded up ½ point to 103 5/8, sources said. More than $23 million of the bonds were on the tape by the late afternoon.

Clear Channel priced an upsized $2.235 billion issue of the 9¼% notes at par last Thursday.

The notes skyrocketed soon after breaking for trade with the notes more than 2 points above their issue price right out of the gate, sources said.

Bristow losses intensify

Bristow’s 6¼% senior notes due 2022 intensified their losses in active trading on Tuesday.

The 6¼% notes shaved off 11 points to trade down to 24.

More than $27 million of the bonds were on the tape by the late afternoon.

The notes dropped 13 points in late trading on Monday.

While Bristow’s unsecured notes continued their downward spiral, the company’s 8¾% senior secured notes due 2023 saw a slight rebound after tanking in late-day trading on Monday.

The 8¾% senior notes rose 2¾ points to 75¼ on Tuesday, a market source said. More than $21 million of the bonds were on the tape by the late afternoon.

The notes dropped almost 9 points in a flurry of activity in the last hour of Monday’s session.

Bristow’s junk bonds tanked after the civil aviation company released its third-quarter earnings report on Monday and announced it was terminating its planned acquisition of Columbia Helicopters.

In November 2018, Bristow announced it had signed a definitive agreement to acquire Columbia Helicopters for $560 million.

Bristow paid $20 million to Columbia Helicopters to terminate the agreement.

As recently as last week, a syndication effort was underway for a bridge loan to back the acquisition, Prospect News reported.

Springleaf jumps

OneMain/Springleaf’s 7 1/8% senior notes due 2026 jumped in high-volume activity on Tuesday following a ratings upgrade.

The 7 1/8% notes rose 3¼ points to par ½, according to a market source.

With more than $48 million on the tape by the late afternoon, the 7 1/8% notes were among the most actively traded issues in the secondary space.

The notes were making gains after Moody’s Investors Service upgraded the junk bonds to Ba3 from B1, a market source said.

The upgrade was due to progress OneMain Holdings has made in deleveraging and improving its liquidity profile, the rating agency said.

The personal loan lender reduced its leverage to 6.9x from 9.4x in 2018 and plans to have its leverage ratio down to 6x by the year’s end, Prospect News reported.

Monday fund flows

The cash flows of the dedicated high-yield bond funds were flat to slightly positive on Monday, a trader said.

High-yield ETFs saw $36 million of inflows on the day.

Actively managed high-yield funds saw $15 million of inflows on Monday, the trader said.

With three of the current week's five reporting sessions in the book, the combined funds are tracking $130 million of outflows on the week, the source added.

Indexes gain

Indexes were posting gains on Tuesday after a mixed start to the week.

The KDP High Yield Daily index rose 13 basis points to close Tuesday at 69.55 with the yield 6.23%.

The index dropped 6 bps on Monday after a cumulative gain of 8 bps on the week last week.

The ICE BofAML US High Yield index again shot past 5% returns on Tuesday.

The index gained 33 bps with the year-to-date return now 5.293%.

The index rose 7.7 bps on Monday after a cumulative gain of 16.7 bps on the week last week.

The index sank below the 5% threshold last Thursday after shooting past it just two days earlier last Tuesday.

The index surpassed 4% year-to-date returns on Jan.30.

The CDX High Yield 30 index jumped 52 bps to close Tuesday at 106.15.

The index dropped 2 bps on Monday after shaving off a cumulative 25 bps on the week last week.

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