Nielsen, Spirit AeroSystems price; DISH gains in junk trading; crypto-exposed notes fall

By Paul A. Harris and Abigail W. Adams

Portland, Me., Nov. 8 – Buoyed by a supportive capital markets backdrop two dollar-denominated secured deals priced Tuesday on accelerated timelines.

The leveraged buyout Nielsen Holdings plc deal priced. Separately, Spirit AeroSystems Inc. priced a new offering late on Tuesday.

Meanwhile, in secondary trading it was another whipsaw session for risk assets with the high-yield market gaining ¼ to ½ point early in the session with equities strong.

And then Bitcoin crashed, dragging broader markets down with it.

The high-yield secondary space again swung to losses by the close with the cash bond market ending the day off ¼ point, sources said.

While the broader market closed Tuesday on soft footing, DISH Network Corp.’s 11¾% senior secured notes due 2027 (Ba3/B+) held on to the gains made early in the session to close the day well above their discounted issue price.

The company’s outstanding issues, which took a hit as the new deal repriced DISH’s capital structure, also improved in heavy volume.

While earnings, inflation, interest rate volatility and midterm elections were the main movers of the market early Tuesday, the flash crash of Bitcoin following news crypto-exchange FTX would sell to Binance added another factor to the equation.

Bitcoin plummeted 17% in intraday activity following news of FTX’s sudden sale after the exchange suffered $6 billion in outflows in 72 hours.

Issuers with exposure to Bitcoin suffered large losses as well with Coinbase Global, Inc.’s senior notes (Ba2/BB) and MicroStrategy Inc.’s 6 1/8% senior notes due 2028 (Ba3/B-) falling 4 to 6 points during Tuesday’s session.

MPH Acquisition Holdings LLC’s (MultiPlan Corp.) also had large losses during Tuesday’s session after disappointing earnings.

Primary deals

Neptune BidCo US Inc. priced $1.96 billion of 9.29% senior secured notes due April 15, 2029 (B2/B/BB) backing the buyout of Nielsen Holdings plc.

The notes priced at 92.294 to yield 11%.

The coupon came on top of coupon talk. The issue price came rich to price talk. The yield printed at the tight end of yield talk.

Following covenant changes the order book grew to $3 billion, a bond trader said.

As the terms circulated after Tuesday's close the deal is expected to begin trading on Wednesday morning, the trader added.

Elsewhere Spirit AeroSystems priced an upsized $900 million issue (from $800 million) of seven-year senior secured notes (Ba2/BB-) at par to yield 9 3/8%.

The yield printed at the tight end of yield talk.

The deal played to a very solid book containing $3.2 billion of orders, a trader said.

The Spirit AeroSystems bonds also priced late Tuesday afternoon, and are expected to begin trading on Wednesday morning, a sellside source said.

Both of Tuesday's deals had been expected to remain in the market at least until Wednesday.

In the wake of those two deals one offering remained on the active forward calendar at Tuesday's close.

Pegasus Merger Co./Tenneco Inc. is attempting to place $1 billion of six-year senior secured notes (B2/B-) in the market with early guidance specifying a coupon of 8% at a discount to yield 12%, with expectations of pricing before the end of the week.

DISH does well

DISH’s new 11¾% senior secured notes due 2027 made strong gains on Tuesday after a weak break with the notes holding on to their gains despite the late-day weakness in the market.

The 11¾% notes rose 1 point in heavy volume with the notes trading in the 98½ to 99 context heading into the market close.

There was $134 million in reported volume.

DISH priced a $2 billion issue of the 11¾% notes at 98.171 to yield 12¼% on Monday.

Pricing came wide to initial talk for an all-in yield of 11¾% to 12%.

The notes traded down to a 97-handle after breaking for trade.

DISH’s deal struggled during bookbuilding with timing delayed, pricing widening and the deal undergoing covenant changes.

However, the notes offered a chunky yield for secured paper and its secondary performance was expected to continue to improve.

DISH’s latest offering sparked a repricing of its capital structure with the satellite broadcast company’s outstanding notes suffering large losses last week.

However, DISH’s notes were better on Tuesday.

The company’s 7¾% senior notes due 2026 (B3/B) gained more than 1 point in intraday activity before giving back most gains as selling pressure took hold in the late afternoon.

The 7¾% notes closed Tuesday at 78¾ with the yield about 15.6%.

There was $25 million in reported volume.

The 7¾% notes were trading on an 85-handle with a yield of 12¾% early last week prior to DISH announcing its new offering.

DISH’s 5¾% senior secured notes due 2028 (Ba3/B+) rose 1 point.

The notes were changing hands in the 77½ to 78 context with a yield of 10¾%, according to a market source.

There was $24 million in reported volume.

The notes were on an 80-handle with the yield about 10% prior to DISH’s new offering.

Crypto-winter

Names with crypto-exposure saw large losses on Tuesday as Bitcoin crashed following the emergency sale of crypto-exchange FTX.

Coinbase’s 3 3/8% senior guaranteed notes due 2028 fell 5 points in light volume to a new all-time low.

The 3 3/8% notes closed the day at 58½ with the yield now just shy of 14%.

Coinbase’s 3 5/8% senior guaranteed notes due 2031 sank 4½ points to close the day at a new all-time low of 52½.

The yield on the notes was now 12 5/8%.

MicroStrategy’s 6 1/8% senior notes due 2028 sank 6 points to close the day wrapped around 78.

The yield on the notes was 11½%.

Bitcoin sank 17% to a $17,000 handle in the early afternoon with market chatter about a liquidation following the emergency sale of crypto-exchange FTX to Binance.

FTX, a powerhouse in the crypto space as recently as a few days ago, became the latest crypto exchange unable to withstand the sudden and violent downturn of its digital assets.

Prior to the afternoon announcement about FTX’s sale to Binance, news reports circulated that Binance’s chief executive officer was prepared to sell a large chunk of FTT, FTX’s utility token that composed a large portion of FTX chief executive officer Sam Bankman-Fried’s Alameda Research.

MultiPlan’s earnings

MultiPlan’s senior notes suffered large losses after the health care cost management solutions company posted disappointing earnings.

The 5¾% senior notes due 2028 (B3/B-) sank 7 points to close Tuesday at 68 with the yield 13¾%.

The 5½% senior secured notes due 2028 (Ba3/B+) fell 5 points to 79½ with the yield 10¼%.

MultiPlan reported a large earnings miss with revenue down 13.5% year over year, according to a market source.

Monday inflows

The dedicated high-yield bond funds saw $457 million of daily net inflows of cash on Monday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $384 million of inflows on the day.

Actively managed high-yield funds saw $73 million of inflows on Monday, the source said.

The combined funds are tracking $1.51 billion of net inflows for the week that will conclude with Wednesday's close, according to the market source.

Indexes

The KDP High Yield Daily index shaved off 1 point to close Tuesday at 50.97 with the yield unchanged at 7.89%.

The index rose 7 points on Monday.

The ICE BofAML US High Yield index shaved off 1.1 bps with the year-to-date return now negative 12.935%.

The index rose 11.4 bps on Monday.

The CDX High Yield 30 index was down 17 bps to close Tuesday at 99.27.

The index gained 33 bps on Monday.

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