Downsized Consol launches; Harland Clarke on tap; Acrisure slates; Dynegy up on merger news; Sprint off

By Paul Deckelman

New York, Oct 30 – Consol Mining Corp. launched a downsized $300 million eight-year senior secured issue on Monday – carrying a considerably wider coupon than had been talked around the market last week, high-yield syndicate sources said on Monday.

There was no word by press time Monday evening about whether the coal miner’s deal had priced.

The sources meantime said that check printer and advertising services company Harland Clarke Holdings Corp.’s $500 million add-on to its existing five-year notes is expected to price during Tuesday’s session.

They meantime saw another U.S. dollar-denominated and fully junk-rated deal join the forward calendar, as insurance brokerage company Acrisure LLC began shopping around a $725 million eight-year issue, with pricing expected at the end of the week.

Another company based in the United States – records storage and information technology firm Iron Mountain Inc. – was heard to be tapping the sterling market with an eight-year issue.

Traders saw sizable activity in Friday’s new deals from goeasy Ltd. and FXI Holdings, Inc.

Away from the new issues, traders saw Dynegy Inc.’s bonds rise solidly in active trading on the news that Vistra Energy Corp. will be buying Dynegy in a $1.7 billion all-stock deal.

Homebuilder Lennar Corp.’s bonds eased on the news that it will acquire sector peer CalAtlantic Group Inc., whose bonds firmed.

The prospect that the possible merger between Sprint Corp. and T-Mobile USA may not take place caused Sprint’s paper to slide.

Statistical market performance measures were mixed for a second consecutive session on Monday. They had turned mixed on Friday after two straight lower across the board sessions and three mixed sessions in a row before that.

Downsized Consol deal launches

While junk market primary sources said that Consol Mining had launched its $300 million offering of senior secured second-lien notes due 2025at 11%, there had been no word at press time Monday evening as to whether the deal had actually priced.

Price talk on the issue was 10.75% to 11% – considerably wider than the 9% area price talk which had circulated in the market towards the end of last week.

The issue was meanwhile twice downsized – first from the originally planned $350 million to $325 million earlier Monday, and then again later in the session to $300 million.

A trader said “it doesn’t look like it is going well – when you have a deal downsized and widening out like that, not a good sign.”

The deal was first announced on Oct. 23 and had been expected to price at the tail end of last week, but that did not happen and the issue was ultimately floated off to this week.

That Rule 144A and Regulation S transaction is bring brought to market via J.P. Morgan Securities LLC.

The company – a Pittsburgh-based coal mine operator being spun off from its corporate parent, Consol Energy Inc., an oil and natural gas exploration and production company also based in Pittsburgh – plans to use the bulk of the new-deal proceeds, together with borrowings under new term loan facilities and a revolving credit facility to be entered into upon its separation from Consol Energy, to fund that spinoff via a payment to Consol Energy under the terms of the coming separation.

Harland Clarke pricing seen on tap

Elsewhere in the new-deal arena, participants were anticipating a possible Tuesday pricing for Harland Clarke Holdings Corp.’s $500 million add-on to its existing 8 3/8% senior secured notes due Aug. 15, 2022.

Syndicate sources said that the order books on the deal were scheduled to close on Monday afternoon, with pricing expected on Tuesday.

Talk on the deal is for a pricing at 104.75.

The San Antonio-based media delivery, payment solutions and marketing services provider’s 144A/ Regulation S for life deal is bring brought to market via joint bookrunners Credit Suisse Securities (USA) LLC, BofA Merrill Lynch, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Jefferies LLC, Macquarie Capital and Wells Fargo Securities LLC .

Fifth Third Bank, Regions Securities LLC and Eagle Hill will be co-managers on the issue.

The new Rule 144A tack-on notes will become immediately fungible with the existing Rule 144A notes. The Regulation S tack-on notes will become fungible with the existing Regulation S notes at the conclusion of a 40-day restriction period.

Harland Clarke plans to use the add-on proceeds for debt refinancing.

Acrisure announces deal

Acrisure LLC and Acrisure Finance, Inc. announced plans on Monday for an offering of $725 million senior notes due 2025.

The company was heard by high-yield syndicate sources to be starting a roadshow on Monday for the offering, with pricing expected on Friday of this week.

The Rule 144A/Regulation S deal will be brought to market via J.P. Morgan.

Caledonia, Mich.-based insurance brokerage Arcrisure – the 14th largest brokerage based in the United States in terms of revenues in 2016, according to the company announcement – plans to use the proceeds from the bond deal to replace all of its existing second-lien notes, to pay related fees and expenses, and to fund acquisitions.

The company also said that in connection with the notes issue, it plans to reprice and increase the size of its existing first-lien term loan facility, “and make certain other modifications.”

Iron Mountain does sterling deal

Iron Mountain Inc. was heard to be taping the sterling-denominated bond market via its Iron Mountain (UK) PLC subsidiary, which will be selling £400 million of senior notes due 2025 under Rule 144A and Regulation S.

The Boston-based records storage and information management company said that the new-deal proceeds, together with revolving credit facility borrowings, will be used to fund the redemption of all of the outstanding £400 million of Iron Mountain Europe PLC's 6.125% sterling-denominated senior notes due 2022.

Information on the deal’s timing was not immediately available.

Recent deals trade actively

Back in the dollar-denominated market, traders saw some brisk activity Monday in recently priced issues.

A trader said that goeasy Ltd.’s 7 7/8% notes due 2022 traded between 101¾ and 102 5/8, with the last prints of the day going off in a 102¼-to-102 5/8 bid context.

A second trader pegged the bonds at 102 5/8 bid, while at another desk, they were quoted going home at 102¾ bid, up 5/8 point on the day, on volume of more than $35 million.

The Mississauga, Ont.-based provider of goods and alternative financial services brought an upsized $325 million of those five-year notes to market Friday at par in a regularly scheduled forward calendar offering originally announced at $300 million. The new bonds were later quoted higher, though on not much initial volume.

One of the traders said that the new FXI Holdings 7 7/8% senior secured notes due 2024 traded in a 101½-to-102 bid range, “with most of those trades” centering between 101½ and 101¾ bid.

He saw more than $25 million of those notes changing hands.

Another market source located the notes at 101 5/8 bid, calling that actually down 1/8 point on the session.

FXI, a Media, Pa.-based manufacturer of flexible polyurethane foam, priced $525 million of those seven-year secured notes at par Friday after that scheduled forward calendar deal was upsized from $500 million originally.

Those new FXI bonds were the busiest junk credit of the day on Friday, firming smartly from their issue price when they reached the aftermarket, going out at around the 101½ bid mark.

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