Morning Commentary: Cornerstone Chemical joins thin July calendar; Ashton Woods on deck

By Paul A. Harris

Portland, Ore., July 26 – Cornerstone Chemical Co. climbed aboard a thin late-July forward calendar on Wednesday.

A roadshow is set to start on Thursday for a $430 million offering of seven-year senior secured notes backing the buyout of the company.

Initial talk has the notes coming to yield in the low-to-mid 7% area, an investor said.

Goldman Sachs & Co. is the left bookrunner. Credit Suisse Securities (USA) LLC and KeyBanc Capital Markets are the joint bookrunners.

Proceeds will be used to fund the acquisition of Cornerstone Chemical Co. by Littlejohn & Co. LLC from H.I.G. Capital, and to repay debt.

Meanwhile Ashton Woods USA LLC is on deck to price a $250 million offering of eight-year senior notes (Caa1/B-) on Wednesday.

Talk is 6 5/8% to 6 7/8%.

The deal, which is being led by J.P. Morgan Securities LLC and Wells Fargo Securities LLC, was playing to a $200 million book as of Tuesday, and should get done, the investor said.

Vivint, Inc. (APX Group, Inc.) remains in the market with a $400 million offering of seven-year senior notes (Caa2/CCC), which had been expected to price on Tuesday.

Talk remains in the 8% area, the investor said, and added that there is a $200 million anchor order that hinges on the issuer making some concessions with respect to the covenant package.

And AssuredPartners, Inc. is on the road with a $450 million offering of eight-year senior notes (Caa2/CCC+) expected to price before the end of the week.

The triple-hooks deal is being guided at 7½% to 7¾%, the investor said.

A slow-to-moderate deal pace appears to be in the offing between now and Labor Day, the investor said on Wednesday.

Bridge loan syndications have been underway for H&E Equipment Services, Inc. and Staples, Inc., both expected to lead to bond deals in the near-to-intermediate term.

Tight-trading market

High-yield ETFs were flat to slightly better at mid-morning.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was 7 cents (0.07%) better at $88.90 per share.

The JPMorgan high-yield index was posting a composite yield to worst of 5.89%, as tight as it has been since September 2014, the investor said.

The cash balances of the funds are healthy, the source added.

The daily cash flows of the dedicated high-yield funds were mixed on Tuesday.

High-yield ETFs sustained $130 million of outflows on the day.

However asset managers saw $120 million of inflows on Tuesday.

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