Live Nation, Alliant, National CineMedia price; Shutterfly trades; Stars Group better

By James McCandless and Paul A. Harris

San Antonio, Oct. 2 – An active Wednesday session saw three high-yield deals price, while the secondary market continued to focus on names making news and newer issues.

Live Nation Entertainment, Inc. priced a $950 million issue of eight-year senior notes at par to yield 4¾%, in a drive-by.

Alliant Holdings Intermediate, LLC priced an upsized $690 million issue of eight-year senior notes at par to yield 6¾%.

National CineMedia, LLC priced a $400 million issue of 8.5-year senior secured notes at par to yield 5 7/8% in a drive-by.

In the secondary, Shutterfly Inc.’s new notes were free to trade, ending in a weaker position.

Meanwhile, gaming name Stars Group Inc.’s issues shot up after the company announced a merger with a competitor.

PG&E Corp.’s paper was in decline as creditors and stockholders clash over the company’s exclusive right to propose a restructuring plan.

United States Steel Corp.’s notes fell after a ratings agency revised its view of the company for the worse.

A recent issue from Telesat Canada continued to see a negative trend.

Three deals price

An active Wednesday session saw three deals price.

Two came as drive-bys while the third execution was completed on a foreshortened timeline.

And considering widespread volatility in the equity markets, with the Dow Jones Industrial Average falling 1.86% on the session, executions were notable: All three deals came in line with talk.

Live Nation Entertainment, Inc. priced a $950 million issue of eight-year senior notes (existing ratings Ba3/B+) at par to yield 4¾%, in a drive-by.

The yield printed at the tight end of the 4¾% to 5% yield talk and in the middle of initial talk in the 4¾% area.

Alliant Holdings Intermediate, LLC priced an upsized $690 million issue of eight-year senior notes (Caa2/CCC+) at par to yield 6¾%.

The issue size increased from $575 million with the shift of proceeds from a concurrently withdrawn $115 million loan.

The yield printed in the middle of yield talk in the 6¾% area and tight to initial guidance in the high 6% area.

The Wednesday execution represented an acceleration of the deal's timing. When announced, the deal had been expected to remain in the market into Thursday's session.

And National CineMedia, LLC priced a $400 million issue of 8.5-year senior secured notes (Ba3/B+) at par to yield 5 7/8% in a drive-by.

The yield printed in the middle of yield talk in the 5 7/8% area and tight to initial guidance in the 6% area (see related stories in this issue).

The difficult deals

The smooth sailing that Wednesday's issuers enjoyed in the choppy seas of the global capital markets stands in contrast to difficulties others have recently endured in completing transactions, or in some cases not completing them.

On Wednesday the high-yield market remained rife with chatter about the Shutterfly Inc. bond and loan deals backing the buyout of the company by Apollo Global Management LLC.

To recap, on Tuesday Shutterfly priced an upsized $785 million issue of 8½% seven-year senior secured notes (B1/B) at 94.371 to yield 9 5/8%.

That was the biggest original issue discount extended to bond investors since February 2018, a buyside source said on Wednesday.

The deal, which was upsized from $500 million, priced on top of final coupon talk, and cheap to price talk that was set at 95 (earlier price talk was 95 to 96). Initially the deal was talked to yield 8¼% to 8½%.

The notes also underwent covenant changes tightening restrictions on payments, investments, debt incurrence and liens.

As to the loan, which finished at a final size of $1.03 billion, the banks were heard to have taken down $280 million of that loan paper, themselves, while agreeing to refrain from selling any of that portion below 95 for six months, the buysider added.

Thursday

Looking to the Thursday primary market session NFP Corp. plans to price a $250 million offering of senior notes due July 2025 identical to its existing 6 7/8% senior notes due 2025 (existing ratings Caa2/CCC+).

Initial talk has the notes coming to yield in the high 7% to 8% area.

And in the European new issue market Wind Hellas is expected to price €500 million offering of five-year senior secured notes (Fitch: B).

Initial talk is in the mid-4% area.

Tuesday outflows

The daily cash flows of the dedicated high-yield bond funds were negative on Tuesday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs sustained $159 million of outflows on the day.

Actively managed high-yield funds saw $25 million of outflows on Tuesday, the source said.

With only Wednesday's numbers to factor into the tally, the combined funds are tracking $615 million of net inflows for the week to Wednesday's close, the source added.

Shutterfly trades

New notes from Shutterfly were free tot trade, weakening by the end of the day, traders said.

The 8½% senior secured notes due 2026, which priced at 94.371, softened to 93.91 bid at the end of Wednesday.

The Redwood City, Calif.-based photo services company’s new $785 million issue was upsized from $500 million and came with covenant changes related to restrictions on payments, investments, debt incurrence and liens.

The notes are part of a buyout of Shutterfly and Snapfish LLC by Apollo Global Management LLC.

Stars Group rises

Meanwhile, in gaming, Stars Group’s issues shot higher, market sources said.

The 7% senior notes due 2026 gained 1¾ points to close at 108¼ bid.

Early Wednesday, the Toronto, Ontario-based online gaming name announced that it had agreed to be acquired by sector peer Flutter Entertainment in an all-stock deal.

As part of the agreement, Flutter shareholders will own about 54.64% of the new entity, leaving Stars Group shareholders with the remaining 45.36%.

PG&E declines

Utilities name PG&E’s paper was in decline in Wednesday’s activity, traders said.

The 6.05% paper due 2034 dropped 1¾ points to close at 112¼ bid.

The San Francisco-based bankrupt electric utility’s structure saw negativity after a group made up of creditors, wildfire victims and other stakeholders said that it supports ending the company’s exclusive right to propose a restructuring plan.

The group argued that ending the exclusivity would allow for competition in the development of a plan, increasing the chance of giving the best outcome to those affected most by its bankruptcy.

PG&E’s plan would see an $8.4 billion cap in wildfire victim payouts, retaining shareholder value.

In a bankruptcy court hearing later this month, a judge will decide on whether or not to terminate the exclusivity period.

“It seems more likely that the judge will throw it out,” a trader said. “They might realize that there are too many stakeholders wanting in, so ending exclusivity could mean a cleaner process.”

U.S. Steel falls

Elsewhere, U.S. Steel’s notes were seen falling, market sources said.

The 6¼% senior notes due 2026 lost 1½ points to close at 81½ bid. The 6 7/8% senior notes due 2025 shed 1¾ points to close at 87½ bid.

On Wednesday, S&P Global Ratings revised its view of the Pittsburgh-based steel manufacturer to negative from stable.

The agency cited the company’s decision to purchase a 49.9% interest in competitor Big River Steel with $700 million drawn from a $2 billion asset-based loan revolver.

S&P said that a debt-financed purchase could factor into a downgrade if market conditions weaken.

The name announced the purchase on Tuesday.

As part of the purchase agreement, the company may decide to acquire the remaining 50.1% over the next four years.

Telesat lower

Telecom name Telesat Canada’s recent issue continued to track downward, traders said.

The 6½% senior notes due 2027 shaved off ½ point to close at 101 bid.

The $550 million issue priced on Sept. 27 after printing at the tight end of talk for a yield at 6½% to 6¾%.

Since pricing, the issues saw a short climb followed by a longer decline.

Indexes

The KDP High Yield Daily index dropped 19 basis points on Wednesday, marking the close at 71.22 with the yield climbing to 5.49%.

The index declined by 2 bps on Tuesday, fell 12 bps on Monday and dropped 10 bps on Friday.

The ICE BofAML US High Yield index crashed 43 bps with the year-to-date return now at 10.949%.

The index lost 6.9 bps on Tuesday.

The CDX High Yield 30 index fell 36.67 bps to 105.9270.

The index declined by 35.5 bps on Tuesday, added 34.99 bps on Monday and shifted lower by 35.59 bps on Friday.

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