Unisys, loanDepot price; Providence on 102-handle; AA gains; Diamond Sports, PBF drop

By Paul A. Harris and Abigail W. Adams

Portland, Me. Oct. 22 – The domestic high-yield primary market remained active on Thursday with two deals clearing the market and several more set to price before the week draws to a close.

Unisys Corp. priced an upsized $485 million issue of 6 7/8% eight-year senior secured notes (B2/BB-) and loanDepot priced an upsized $500 million issue of five-year senior secured notes.

Sizzling Platter, LLC, Prime Healthcare Services, Inc. and Akumin Inc. are slated to price their offerings on Friday.

Meanwhile, it was another sidewise day in the secondary space on Thursday as the market awaits the final word on a pre-election stimulus package.

New paper remained in focus. However, earnings and topical news catapulted some outstanding issues into the spotlight.

Providence Service Corp.’s 5 7/8% senior notes due 2025 (B2/B+) skyrocketed in the aftermarket with the notes trading up to a 102-handle.

American Airlines, Inc.’s bonds jumped in active trading following a better-than-expected earnings report.

Diamond Sports Group LLC and Diamond Sports Finance Co.’s 5 3/8% senior secured notes due 2026 continued to slide in active trading as the company talks restructuring.

PBF Holding Co. LLC’s notes had a large decline as investors prepare for the energy company’s earnings next week.

Meanwhile, dedicated bond funds continued to see money enter the space although inflows were nominal compared to the multibillion-dollar inflows of the previous two weeks.

High-yield mutual and exchange-traded funds had inflows of $151 million in the week through Wednesday’s close, according to the Refinitiv Lipper US Fund Flows report.

Thursday’s primary

The high-yield new issue news flow from the United States and Europe remained strong and steady throughout the Thursday session, with deals pricing, deals talked and potential deals announced.

Issuers continue to enjoy solid or better executions.

On Thursday, Unisys priced an upsized $485 million issue of 6 7/8% eight-year senior secured notes (B2/BB-) 25 basis points through talk.

The Oct. 19 week is set to have a big finish.

Six dollar-denominated offerings, with a combined total of $2.8 billion, are possible Friday business.

News, in the form of price talk and timing, surfaced Thursday on several of the offers in question, including Sizzling Platter, Prime Healthcare Services, and Akumin.

However, there was no word on either of the two PIK toggle holdco dividend deals that have been making their ways along the high-yield road.

The offers in question are the Multi-Color Corp./LABL Intermediate Holding Corp. $500 million of five-year senior PIK toggle notes, and the Highlands Holdings Bond Issuer, Ltd./Highlands Holdings Bond Co-Issuer, Inc. (Aspen Insurance) $500 million of five-year senior secured PIK toggle notes.

Both have been expected to price ahead of Friday's close.

Providence skyrockets

Providence Service’s 5 7/8% senior notes due 2025 rocketed up to a 102-handle in the aftermarket.

The notes from the non-emergency medical transport provider stood poised to close the day at 102 5/8, a market source said.

The notes were active with more than $65 million in reported volume.

The deal was in hot demand during bookbuilding with the demand following it into the secondary space.

The health care sector in general has also been strong recently, a source said.

Providence Service priced a $500 million issue of the 5 7/8% notes at par on Wednesday.

Pricing came tighter than the 6% to 6¼% yield talk. Early guidance was in the 6¼% to 6½% area.

American Airlines gains

American Airlines’ 11¾% senior notes due 2025 were on the rise in active trading on Thursday following better-than-expected earnings.

The 11¾% notes gained more than 1¼ points to top par.

They stood poised to close the day at par ¼.

The embattled airline was on the rise on better-than-expected earnings, continued hope for a stimulus package, and an upbeat conference call, sources said.

While American Airlines reported a net loss of $2.4 billion, revenue was $3.17 billion versus analyst expectations for revenue of $2.81 billion, CNBC reported.

On its conference call, the airline announced plans to make debt repayment a priority once revenue levels return to normal with the intention of pre-paying up to 40% of its current debt, Prospect News reported. (See related article in this issue)

Diamond Sports slides

Diamond Sports’ 5 3/8% senior secured notes due 2026 continued to slide in active trading on Thursday.

The notes were down another 3½ points to 62½ on Thursday.

The bonds had more than $30 million in reported volume.

The notes have been active and trading off throughout the week, sources said.

They were down about 5 points from Friday’s close.

While not as active, Diamond Sports’ 6 5/8% senior notes due 2027, which are unsecured, dropped down to a 45-handle on Thursday.

They are also down about 5 points on the week, a source said.

The notes have been trading off since Tuesday when news broke the company is considering restructuring.

Diamond Sports has had a contentious relationship with its creditors as it has tried to pursue a variety of debt refinancing initiatives, which creditors have claimed would rob their securities of value.

Last week, the 5 3/8% notes were posting gains after lenders to Diamond Sports’ first lien term loan due 2026 hired a legal advisor to challenge potential transactions that would devalue the company’s debt.

PBF Holdings sinks

PBF Holdings’ 9¼% senior notes 2025 were among the major losers of Thursday’s session with the notes down almost 4 points in active trading.

The 9¼% notes stood poised to close the day at 94.

There was more than $14 million in reported volume during Thursday’s session.

The petroleum refiner and supplier is scheduled to report earnings next week and the outlook is not good, a source said.

Indexes gain

Indexes eked out minor gains on Thursday.

The KDP High Yield Daily index rose 2 bps to close Thursday at 66.76 with the yield now 5.39%.

The index slipped 3 bps on Wednesday, was flat on Tuesday and gained 2 bps on Monday.

The ICE BofAML US High Yield index rose 0.7 bps with the year-to-date return now 1.178%.

The index shaved off 3.2 bps on Wednesday after gaining 2.8 bps on Tuesday and 10.1 bps on Monday.

The CDX High Yield 30 index rose 2 bps to close Thursday at 105.65.

The index rose 3 bps on Wednesday and 27 bps on Tuesday after dropping 41 bps on Monday.

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