Antero comes upsized; Ritchie Bros., Tervita price; new Chesapeake, other Tuesday deals busy

By Paul Deckelman and Paul A. Harris

New York, Dec. 7 – The high-yield primary sphere kept busy on Wednesday, with a trio of issuers bringing new offerings totaling $1.46 billion to market – although that was down from the $2.35 billion of new dollar-denominated and fully junk-rated paper that had gotten done in four tranches during Tuesday’s session, according to data compiled by Prospect News.

Oil and natural gas exploration and production company Antero Resources Corp. had the big deal of the day, an upsized $600 million of 8.25-year notes, which remained around their issue price, though in brisk trading, when they hit the aftermarket after pricing.

Ritchie Bros. Auctioneers Inc., a Canadian industrial auctioneer and equipment distributor, brought the gavel down on a $500 million issue of eight-year notes, which were not initially reported to be trading around.

Another Canadian company – earth, water, waste and resources solutions provider Tervita Corp. – priced $360 million of five-year notes.

Apart from the day’s deals, traders said that recently priced issues dominated secondary activity on Wednesday.

Chief among them was Chesapeake Energy Corp.’s new eight-year notes, which had priced on Tuesday, although terms on the deal didn’t hit the market until early Wednesday.

They also saw considerable activity in such new-issue names as Rowan Cos., Inc., Parsley Energy, LLC and Cheniere Corpus Christi Holdings, LLC.

Statistical market performance measures remained higher across the board on Wednesday for a fourth consecutive session.

Antero upsized

Issuers raised $1.46 billion on Wednesday.

In drive-by action, Antero Resources priced an upsized $600 million issue of senior notes due March 1, 2025 (Ba3/BB) at par to yield 5%.

The issue size was increased from $550 million.

The yield printed at the tight end of yield talk in the 5 1/8% area.

J.P. Morgan Securities LLC ran the books for the debt refinancing and general corporate purposes deal.

Ritchie Bros. prices tight

Ritchie Bros. Auctioneers priced a $500 million issue of eight-year senior notes (B2/BB-) at par to yield 5 3/8%.

The yield printed at the tight end of yield talk in the 5½% area. Initial guidance was in the high 5% area.

Goldman Sachs & Co. was the left bookrunner. RBC Capital Markets LLC was the joint bookrunner.

The Vancouver, B.C.-based industrial auctioneer and equipment distributor plans to use the proceeds, together with a new delayed-draw term loan and cash on hand or available under a new revolver, to fund the acquisition of IronPlanet, a California-based online marketplace for used heavy equipment and other durable asset sales.

Tervita oversubscribed

Tervita priced a $360 million issue of five-year senior secured notes (B2) at par to yield 7 5/8%.

JPMorgan, Barclays and Deutsche Bank Securities Inc. managed the sale.

The deal went extremely well, especially given that the issuer is coming out of bankruptcy, an informed source said, adding that Tervita's bond offer was multiple-times oversubscribed.

The Calgary, Alta.-based earth, water, waste and resource solutions provider plans to use the proceeds to finance its recently undertaken recapitalization.

American Midstream roadshow

American Midstream Partners, LP began a roadshow on Wednesday for a $300 million offering of five-year senior notes (expected ratings Caa1/B).

The offer is expected to price on Tuesday.

Wells Fargo Securities LLC is the left bookrunner. BofA Merrill Lynch, RBC Capital Markets Corp., Citigroup Global Markets Inc., SunTrust Robinson Humphrey Inc., Natixis and ABN Amro are the joint bookrunners.

The Denver-based partnership plans to use the proceeds to pay off JP Energy Partners LP’s senior secured revolver and repay a portion of the American Midstream Partners senior secured revolver.

The calendar

The American Midstream Partners deal takes a place on a busy calendar of deals slated to price before the coming weekend.

Included are GTT Communications Inc.'s $300 million offering of eight-year senior notes (Caa1/B-), in the market with initial guidance in the 8% area.

Carlson Wagonlit is marketing $1.03 billion equivalent in three tranches including $750 million of senior secured notes due 2023, dollar-denominated fixed-rate notes and euro-denominated floating-rate notes.

The secured fixed-rate notes are in the market with early guidance of 6½% to 7%. The floating-rate notes come with early guidance of Euribor plus 500 basis points to 525 bps, with no Euribor floor, at 99.5.

In addition there is a $275 million tranche of senior unsecured notes due 2024, in the market with early guidance of 8½% to 9%.

Starwood Property Trust is expected to price $500 million of non-callable five-year senior notes (expected ratings B1/BB-), in the market with early yield guidance of 5½%.

Also Downstream Development Authority gave initial yield guidance for its $250 million offering of six-year senior secured notes of 9½% to 9¾%.

New deals dominate

In the secondary market, a trader said that “new issues have moved front and center, in terms of investor activity.”

Among these was Antero Resources’ quickly shopped and upsized issue of 5% notes due 2025.

A trader saw the Denver-based oil and natural gas company’s deal “wrapped around par.”

A second trader located them at par bid, on volume of more than $55 million, putting that credit high up on the day’s Most Actives list.

A trader said that the new Chesapeake Energy 8% notes due 2025 were probably the busiest name of the day in Junkbondland, estimating that more than $124 million of the notes had changed hands at just under par bid.

A second trader, though, saw the bonds doing better, saying they got as good as 101¼ bid during the day.

The Oklahoma City natural gas and oil producer’s $1 billion quick-to-market deal had priced at par on Tuesday, after having been upsized from an originally announced $750 million.

However, the terms of the deal hit the market early Wednesday, producing the strong trading volume almost as soon as the market opened.

Rowan, Parsley show strength

Traders said that Tuesday’s new deals from Rowan and from Parsley Energy “were well bid-for,” as one put it.

He said that Houston-based energy industry contract driller Rowan’s 7 3/8% notes due 2025 had pushed up to 102 bid when they were freed for aftermarket activity.

A second market source also saw that deal trading around the 102 level, with more than $78 million traded.

Rowan had priced $500 million of the notes at par on Tuesday in a regularly scheduled forward calendar offering, after the transaction was upsized from an originally announced $400 million.

Austin, Texas-based oiler Parsley’s 5 3/8% notes due 2025 meantime were heard by traders at two separate desks to have topped the 101 bid mark, with over $76 million of those new bonds traded.

Parsley’s unscheduled $650 million offering had priced at par Tuesday after being upsized from $600 million originally; the new issue traded in a par-to-100½ bid context when it first hit the aftermarket after pricing, a trader said.

Cheniere churns higher

Yet another Texas-based energy-sector issuer, Houston-based liquefied natural gas company Cheniere Corpus Christi Holdings, was also advancing on Wednesday, part of a broadly stronger sector and overall market.

A trader said that those new 5 7/8% senior secured notes due 2025 gained 3/8 point to end the day at 100 7/8 bid, with more than $14 million of turnover.

Cheniere had priced $1.5 billion of those notes – sharply upsized from the originally announced $1 billion – at par on Monday.

The new notes had gained about 3/8 to ½ point in Monday’s aftermarket and had stayed there on Tuesday before rising on Wednesday.

Indicators momentum continues

Statistical market performance measures remained higher across the board on Wednesday for a fourth consecutive session and for a fifth session in the last six trading days. They had first strengthened on Friday, after having been mixed on Thursday, and stayed stronger on Monday, Tuesday and again on Wednesday.

The KDP High Yield index jumped by 21 basis points on Wednesday, ending at 71.13, its sixth consecutive gain and 11th such advance in the last 12 sessions, including an earlier five straight improvements. The big gain followed two consecutive sessions on Monday and Tuesday when the index was up by 16 bps each of those sessions.

Its yield came in by 8 bps to close at 5.56, after having declined by 5 bps on Tuesday and by 3 bps in each of the previous three sessions. Wednesday was the yield’s ninth straight narrowing and its 10th such decline in the last 11 sessions.

The Markit Series 27 CDX index firmed by more than ½ point on Wednesday to go out at 105 29/32 bid, 105 31/32 offered, its fourth straight rise and fifth improvement in the last six sessions. On Tuesday, it had gained 3/8 point.

The Merrill Lynch High Yield index rose for a sixth straight day, advancing by 0.413%, on top of Tuesday’s 0.312% upturn.

That lifted its year-to-date return to 16.419% from 15.94% on Tuesday – the first time the cumulative return has topped the 16% mark since Oct. 28, when it closed at 16.024%, although those levels are still below the index’s peak level for this year of 16.768%, established on Oct. 25.

© 2015 Prospect News.
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