Summit, Calpine price; Eldorado active; Charter gains continue; Diamond Sports drops

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 27 – The domestic high-yield primary market was active on Monday with two well-known issuers pricing drive-by deals.

Calpine Corp. priced an upsized $1.5 billion of senior notes (S&P: B) in two tranches.

And Summit Materials, LLC and Summit Materials Finance Corp. priced a $700 million issue of 8.5-year senior notes (B2/BB).

The forward calendar also grew with Italy-based doValue SpA starting a roadshow for a euro-denominated offering and Israel-based Leviathan Bond Ltd. on the road with a $2.25 billion four-tranche offering of senior secured notes (Ba3//BB).

Meanwhile, the secondary space continued to grind tighter on Monday with the market up ¼ point, sources said.

Eldorado Resorts, Inc.’s 8 1/8% senior notes due 2027 were active with the notes trading off their highs.

Charter Communications Inc. subsidiaries CCO Holdings LLC/CCO Holdings Capital Corp.’s 4¼% senior notes due Feb. 1, 2031 (B1/BB) continued to gain in active trading following last week’s massive add-on.

Sinclair Broadcast Group Inc.’s two tranches of senior notes issued by Diamond Sports Group LLC and Diamond Sports Finance Co. gave back some of their gains from last week’s rally in the wake of more cancellations of Major League Baseball games.

Big upsize for Calpine

The primary market was active as the final week of July got underway on Monday.

A pair of well-known issuers came with drive-by deals.

Calpine priced an upsized $1.5 billion amount of senior notes (S&P: B) in two tranches.

The deal included an upsized $650 million amount of 8.5-year notes, which priced at par to yield 4 5/8%. The tranche size increased from $500 million. The yield printed 12.5 basis points through the 4¾% to 5% yield talk. Initial guidance was in the 5% area.

The deal also included an upsized $850 million amount of 10.5-year notes, which priced at par to yield 5%. The issue size increased from $500 million. The yield printed at the tight end of the 5% to 5¼% area. Initial guidance was in the 5¼% area.

Also, Summit Materials priced a $700 million issue of 8.5-year senior notes (B2/BB) at par to yield 5¼%.

The yield printed at the tight end of the 5¼% to 5½% yield talk, and well inside of initial talk in the high 5% area.

The notes saw a strong break and were seen changing hands at 102¼ heading into the market close.

Roadshow

There were also new deal announcements on Monday.

Italy-based financial services provider doValue SpA started a roadshow on Monday for a €265 million offering of five-year senior secured notes (/BB/BB).

And Israel-based Leviathan Bond Ltd. began a roadshow on Monday for a $2.25 billion offering senior secured notes (Ba3//BB) in four bullet tranches, according to high-yield market sources in Europe and the United States.

The deal features tranches of three-, five-, seven- and 10-year notes, with tranche sizes remaining to be determined, and could price as early as Monday, Aug. 4

Eldorado trades down

Eldorado’s 8 1/8% senior notes due 2027 were active on Monday and coming in from their highs.

The 8 1/8% notes were down about ½ point.

They were changing hands in the par ¾ to 101¼ context heading into Monday’s close, according to a market source.

More than $25 million of the bonds were on the tape during Monday’s session.

The 8 1/8% notes were coming in after trading as high as 101¾ on Friday, their highest level since Colt Merger Sub, Inc. priced the $1.8 billion tranche of the unsecured notes at par in late June to back Eldorado’s acquisition of Caesars Entertainment.

While the 8 1/8% notes initially struggled in the secondary, trading down to a 96-handle in early July, the notes have gained since Eldorado completed its acquisition of Caesars a little over one week ago.

Charter gains

Charter’s 4¼% senior notes due Feb. 1, 2031 continued to gain in active trading on Monday after the telecommunications company’s massive add-on the previous week.

The 4¼% notes traded up to a 103-handle on Monday.

They were changing hands in the 103 3/8 to 103 5/8 context throughout the session.

It was the highest level for the notes since they initially priced in early July, a market source said.

Charter initially priced a $1.5 billion issue of the 4¼% notes at par on July 6.

The telecommunication company priced a massively upsized $1.5 billion add-on to the notes at 102 on July 21, raising the total amount of the issue to $3 billion.

Diamond Sports

After a rally the previous week that pushed the notes up 10 points, Diamond Sports’ secured and unsecured tranches gave back some of their gains during Monday’s session.

Diamond Sports’ 5 3/8% senior secured notes due 2026 slid 3¾ points to close Monday at 83, according to a market source.

The notes were active with more than $12 million in reported volume.

While volume was light, the 6 5/8% senior notes due 2027 slid 2 points to close Monday at 61¼.

The notes were trading off following headlines that more Major League Baseball games would be canceled following the Miami Marlins’ Covid-19 outbreak.

The notes were among the major losers of Monday’s session, which was an overall firm day for the market, sources said.

While the notes have struggled, both tranches made significant gains in the previous week following the renewal of Sinclair’s content carrier agreement with Comcast.

$298 million Friday inflows

The dedicated high-yield bond funds saw $298 million of net daily inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $233 million of inflows on the day.

Actively managed high-yield funds saw $65 million of inflows on Friday, the source said.

Indexes gain

Indexes started the week with gains.

The KDP High Yield Daily index added 2 bps to close Monday at 66.57. The index posted a cumulative gain of 72 bps on the week last week.

The ICE BofAML US High Yield index gained 12.8 bps with the year-to-date return now negative 0.974%.

The index saw a cumulative gain of 158.7 bps on the week last week.

The CDX High Yield 30 index gained 43 bps to close Monday at 102.05.

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