Chart prices dollar deal, breaks strong; Mohegan up; Sirius, Life Time active in junkland

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 8 – The first junk-rated, dollar-denominated deal to clear the market since before Thanksgiving priced on Thursday.

Engineered equipment manufacturer Chart Industries, Inc. broke the dry spell with a well-received offer.

Meanwhile, the secondary space firmed on Thursday with the cash bond market adding ¼ point after slipping or barely holding steady over the past three sessions.

While trading volume remained light, new paper from Chart jumpstarted activity with the two-tranche offering breaking strong.

Sirius XM Radio Inc’s 3 7/8% notes due 2031 (Ba3/BB) were active although with little movement in price after falling 1 point over the past few sessions.

Mohegan Gaming & Entertainment’s 8% senior secured notes due 2026 (Caa1/B-) eliminated their losses from the past three sessions to reclaim their former level.

Life Time Inc.’s 5¾% senior secured notes due 2026 (B3/B-) were active after the company presented at a conference although with little movement in price.

Meanwhile, high-yield mutual and exchange-traded funds posted nominal inflows of $66 million in the week ending Wednesday, according to the Refinitiv Lipper Fund Flows report.

Chart Industries

Ballground, Ga.-based Chart Industries, Inc. brought fresh dollar-denominated paper to the junk bond market on Thursday.

And it was near enough a blowout, sources said.

The company priced a downsized $1.97 billion amount of high-yield notes in two tranches.

The deal, which was downsized from $2.06 billion (proceeds shifted to the term loan) featured an upsized $1.46 billion tranche (from $1.31 billion) of 7½% seven-year senior secured notes (Ba3/B+) that priced at 98.661 to yield 7¾%, tight to talk.

Chart Industries also priced a downsized $510 million tranche (from $750 million) of 9½% eight-year senior unsecured notes (B3/B) at 97.949 to yield 9 7/8%, also tight to talk.

The deal played to very strong investor interest, with the secured tranche seeing $6 billion of demand, while the unsecured notes played to over $3.5 billion of orders, according to a sellside source.

Also, Jones DesLauriers Insurance Management Inc. a broker partner of Navacord Corp. priced a $300 million issue of 10½% eight-year senior notes (Caa2/CCC/CCC+) at 97.384 to yield 11%.

The yield printed at the wide end of the 10¾% to 11% yield talk, but snug to early guidance in the high-10% to low-11% area.

The first deal to come with triple-C equivalent ratings (“triple hooks”) on both sides of the split since mid-June, it had a “clubby” following among fixed-income investors who follow the insurance and financial sector, a relatively small component of the high-yield index, a sellside source said.

Strong break

Chart Industries’ two-tranches of senior notes dominated activity in the secondary space after breaking for trade with both tranches trading at strong premiums to their discounted issue prices.

The 9½% senior notes due 2031 quickly traded up to a 101-handle with the notes marked at 101 bid heading into the close, a source said.

There was $42 million in reported volume.

The 7½% senior secured notes due 2030 traded in a range of 99½ to 101.

The notes were changing hands in the par ¼ to par ¾ context heading into the market close, a source said.

There was $25 million in reported volume.

Sirius XM active

Sirius XM’s 3 7/8% senior notes due 2031 were active in secondary market activity although with little movement in price after dipping about 1 point over the past three sessions.

The 3 7/8% notes were trading in the 81½ to 82 context with the yield about 6 5/8%, according to a market source.

There was $21 million in reported volume with the notes among the most actively traded issues of Thursday’s session, outside of new paper from Chart.

While active, there was little movement in price with the notes dipping to their current level over the past three sessions.

The notes closed the previous week on an 82-handle.

Mohegan improves

Mohegan’s 8% senior secured notes due 2026 improved in active trading on Thursday to reclaim their previous level after losing some footing alongside the broader market over the past three sessions.

The 8% notes were up about 1 point with the notes launching the day on a 94-handle and continuing to climb as the session progressed.

The notes were changing hands in the 94½ to 95 context heading into the market close, a source said.

The yield was about 10%.

There was $16 million in reported volume.

The 8% notes traded as low as 93 the previous session.

Mohegan’s 8% notes shot up 6 points to a 94-handle in early December following an exchange for the company’s 7 7/8% senior notes due Oct. 15, 2024.

They have largely traded on a 94-handle since.

Life Time active

Life Time’s 5¾% senior secured notes due 2026 were active although with little movement in price following an investor presentation, a source said.

The 5¾% notes were changing hands in the 95 to 95½ context with the yield about 9 7/8%, a source said.

There was about $8 million in reported volume.

The Chanhassen, Minn.-based operator of athletic resorts recently presented at Morgan Stanley’s global consumer and retail conference which may have sparked interest in the name, a source said.

Indexes

The KDP High Yield Daily index gained 8 points to close Thursday at 52.5 with the yield 7.19%.

The index gained 5 points on Wednesday after slipping 15 points on Tuesday and 8 points on Monday.

The ICE BofAML US High Yield index added 21.7 basis points with the year-to-date return now negative 10.073%.

The index inched up 3.1 bps on Wednesday after falling 25.1 bps on Tuesday and 15.8 bps on Monday.

The CDX High Yield 30 index was down 27 bps to close Thursday at 100.53.

The index crept up 3 bps on Wednesday after sliding 8 bps on Tuesday and 61 bps on Monday.

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