Primary prices massive $7.13 billion on Tuesday; Sensata, TriMas on par handles

By Paul A. Harris and Abigail W. Adams

Portland, Ore., March 16 –

A massive Tuesday session saw four issuers – three with $1 billion-plus megadeals – price a total of seven tranches of junk to raise a combined total of $7.13 billion.

Three of the four issuers came with a.m.-to-p.m. drive-bys, while the fourth, which had been in the market overnight, accelerated the timing.

Three of the four issuers upsized.

Executions were solid or better.

Meanwhile, it was another sideways day in the secondary space with volume light as market players eyed the deals in the pipeline.

New paper remained the driving force of trading activity.

However, while active, the deals to price during Monday’s session saw little movement in terms of price.

TriMas Corp.’s 4 1/8% senior notes due 2029 (Ba3/BB-) and Sensata Technologies BV’s 4% senior notes due 2029 (Ba3/BB+) were both on a par handle in active trading.

Tuesday session

T-Mobile US Inc. priced the day's biggest deal, an upsized $3.8 billion of senior notes (Ba3/BB) in three tranches.

The coupons were 2 5/8%, 3 3/8% and 3¾%.

Spreads to Treasuries in all three tranches came beneath 200 basis points!

The overall deal size increased from $3 billion, and was heard to be playing to $8 billion of demand.

As part of its restructuring from Chapter 11 bankruptcy Ferrellgas priced $1.475 billion of senior notes (B3/B-) in two tranches, in a deal heard to be two-times oversubscribed on Tuesday morning.

Timing was accelerated. The deal had been expected to remain in the market until Wednesday.

Yum! Brands, Inc. priced an upsized $1.1 billion issue (from $1.05 billion) of 4 5/8% senior notes due 2032 (B1/BB-) at par, 12.5 bps inside of the talk (see related stories in this issue).

Par handle

TriMas’ 4 1/8% senior notes due 2029 and Sensata’s 4% senior notes due 2029 were in focus in the secondary space.

However, while the notes were active, they saw little movement in terms of price with both issues on a par handle.

TriMas’ 4 1/8% senior notes due 2029 were changing hands at par 3/8 heading into the market close.

There was more than $43 million in reported volume during the session.

TriMas priced an upsized $400 million, from $350 million, issue of the 4 1/8% notes at par in a Monday drive-by.

The issue size increased from $350 million.

The yield printed in the middle of the 4% to 4¼% yield talk. Initial guidance was in the low 4% area.

Sensata’s 4% senior notes due 2029 were changing hands at par ½ heading into the market close, according to a market source.

There was more than $90 million in reported volume.

Sensata priced an upsized $750 million, from $500 million, issue of the 4% notes at par on Monday.

The yield printed in the middle of yield talk in the 4% area.

$106 million Monday inflows

The dedicated high-yield bond funds saw $106 million of net daily inflows on Monday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $181 million of inflows on the day.

Actively managed high-yield funds were negative on Monday, sustaining $75 million of outflows on the day, the source said.

Indexes down

Indexes closed Tuesday in the red.

The KDP High Yield Daily index shaved off 3 points to close Tuesday at 69.17 with the yield now 4.17%.

The index was down 3 points on Monday.

The ICE BofAML US High Yield index inched lower by 0.3 bps with the year-to-date return now 0.48%.

The index was down 0.7 bps on Monday.

The CDX High Yield 30 index dropped 14 bps to close Tuesday at 108.64.

The index gained 3 bps on Monday.

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