Vallourec resumes climb; Six Flags active; United Natural under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 22 – It was a quiet day for the domestic high-yield primary market on Monday with Europe once again stealing the show with one euro-denominated deal pricing.

Iliad SA priced a €500 million offering of seven-year senior notes at par to yield 5 3/8% on Monday.

However, two more deals joined the forward calendar including Helios Software Holdings, Inc. and ION Corporate Solutions Finance Sarl’s €730 million equivalent offering of dollar- and euro-denominated five-year senior secured notes and Mahle GmbH in the market with a €400 million offering of seven-year senior notes (Ba2/BB).

Meanwhile, it was a quiet day in the secondary space on Monday with the activity surrounding the onslaught of issuance from the previous week diminishing.

While quiet, the secondary space continued to firm with the cash bond market up ¼ point on a flat day for Treasuries and on the absence of negative news.

While most deals to price the previous week appeared tucked away, Vallourec SA’s 7½% senior notes due 2032 (Ba2/BB+/BB+) continued to march higher in active trade.

Six Flags Entertainment Corp. and Six Flags Theme Parks Inc.’s 6 5/8% senior secured notes due 2032 (Ba2/BB) also remained active although with little movement in price.

Outside of recent issues, United Natural Foods Inc.’s 6¾% senior notes due 2028 (B2/B-) were under pressure in active trade after the company announced the closure of a slate of distribution facilities as it markets a new term loan.

Vallourec higher

Vallourec’s 7½% senior notes due 2032 resumed their upward momentum in active trade on Monday as the broader market firmed.

The 7½% notes added ½ point to break above a 101-handle.

The notes were trading in the 101¾ to 102¼ context heading into the market close, a source said.

There was $15 million in reported volume.

Vallourec’s 7½% senior notes due 2032 have put in a strong aftermarket performance since the $820 million issue priced at par on April 17.

The notes were further lifted by the improved tone in the market on Monday, a source said.

Active

Six Flags’ 6 5/8% senior secured notes due 2032 were active on Monday although with little movement in price.

The 6 5/8% notes remained wrapped around their issue price and continued to trade in the 99 7/8 to par 1/8 context, a source said.

There was $14 million in reported volume.

The notes have put in a lackluster aftermarket performance since the $850 million issue priced at par on April 18.

While they shook after early weakness after dipping below par on the break, they have largely traded flat since hitting the secondary space.

The tight pricing left the notes little room for upside movement, a source previously said.

United Natural under pressure

United Natural’s 6¾% senior notes due 2028 were under pressure in active trade on Monday with the notes sinking 1½ points.

They were trading at 76 3/8 with a yield of 14% heading into the market close, a source said.

There was $13 million in reported volume.

The selling pressure in the notes comes as United Natural announces a slate of distribution facilities set for closure about one week after the company’s new president and chief financial officer assumed responsibilities, a source said.

The company is also in the process of marketing a new $500 term loan with commitments due on April 25.

Indexes

The ICE BofAML US High Yield index added 30.1 basis points with year-to-date returns now 0.069%.

The index posted a cumulative loss of 57.5 bps the previous week.

The CDX High Yield 30 index added 50 bps to close Monday at 105.85.

The index posted a cumulative loss of 60 bps the previous week.

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