Suburban Propane drives by, split-rated Symantec prices, gains; new Post, AmeriGas issues active

By Paul Deckelman and Paul A. Harris

New York, Feb. 7 – The high-yield primary market dialed things down a couple of notches on Tuesday as just one new deal worth $350 million priced during the session.

That was but a small fraction of the more than $3 billion of new U.S. dollar-denominated and fully junk-rated paper from domestic or industrialized-country borrowers that had come to market in five tranches on Monday, which according to data compiled by Prospect News was the heaviest volume day Junkbondland had seen since Jan. 20, when $3.75 billion had priced in four tranches.

Suburban Propane Partners, LP priced its quickly shopped $350 million of 10-year notes – the second transaction to come out of the propane distribution segment of the energy sector in as many days, following sector peer AmeriGas Partners, LP’s $525 million of 10.25-year notes which got done on Monday, also a quick-to-market issue.

Traders later saw the new Suburban Propane bonds modestly firmer in the aftermarket.

The day’s other pricing came in the crossover arena, as computer security company Symantec Corp. did a split-rated and upsized $1.1 billion of 8.25-year notes as a regularly scheduled forward calendar deal.

Those new bonds were seen to have firmed smartly when they were freed to trade, in active volume.

In the secondary realm, traders meantime saw busy dealings in some of Monday’s credits, notably the AmeriGas Partners deal and consumer packaged food products company Post Holdings Inc.’s quickly shopped and upsized $1.75 billion two-part deal, with the latter deal seen firming from Monday’s aftermarket levels.

Statistical market performance measures were mixed for a second consecutive session, after having been higher across the board three sessions before that.

Suburban Propane drives through

In Tuesday's primary market Suburban Propane Partners, LP priced a $350 million issue of 10-year senior notes (Ba3/BB-) at par to yield 5 7/8%.

The yield printed in the middle of the 5¾% to 6% yield talk.

Wells Fargo was the left bookrunner for the debt refinancing deal. BofA Merrill Lynch, Citizens, Citigroup and JP Morgan were the joint bookrunners.

Split-rated Symantec prices

In the crossover market Symantec Corp. priced an upsized $1.1 billion issue of split-rated senior notes due April 15, 2025 (Baa3/BB+/BB+) at par to yield 5%.

The issue size was increased from $1 billion.

The yield printed 25 basis points inside of the 5¼% to 5½% yield talk.

Joint physical bookrunner BofA Merrill Lynch will bill and deliver for the acquisition financing deal. JP Morgan was also a joint physical bookrunner.

Barclays, Citigroup, Mizuho, MUFG, RBC, SMBC, TD and Wells Fargo were joint bookrunners.

Peabody new structure, talk

Peabody Energy Corp. restructured its $1 billion offering of first-lien senior secured notes (Ba3) into two tranches and set price talk.

The deal, via left bookrunner Goldman Sachs, includes five-year notes that become callable after two years at par plus 50% of the coupon, talked to yield in the 6 1/8% area.

A tranche of eight-year notes that become callable after three years at par plus 75% of the coupon are talked to yield in the 6½% area.

Tranche sizes remain to be determined.

Books close at 1 p.m. ET on Wednesday, and the deal is set to price thereafter.

At the time it was announced the Peabody senior notes offer was structured as a single $1 billion tranche of five-year notes.

Parsley coming Wednesday

Parsley Energy, LLC plans to price a $350 million offering of senior notes due August 2025 on Wednesday.

The deal is scheduled to be marketed on an investor conference call set to take place at 10:30 a.m. ET on Wednesday.

Credit Suisse is leading the acquisition financing. Other syndicate names are expected to be announced.

Silgan initial guidance

Initial guidance on Silgan Holdings Inc.'s dual-tranche offering of senior notes due March 15, 2025 circulated the market on Tuesday, according to a high-yield investor.

Guidance is in the mid-to-high 3% area on the notes in a €450 million tranche.

Guidance is in the 5% area on the notes in a $300 million tranche.

The deal, being led by BofA Merrill Lynch, is expected to price on Thursday.

Proceeds from the dollar-denominated notes will be used to prepay a portion of the company's dollar-denominated term loans and repay a portion of the revolving loans under its senior secured credit facility. Proceeds from euro-denominated notes will be used to prepay all euro term loans and repay a portion of the revolving loans under its senior secured credit facility and to repay certain foreign bank revolving and term loans of certain of the company's non-U.S. subsidiaries.

Hapag-Lloyd taps 6¾% notes

In the European primary market Hapag-Lloyd AG priced an upsized €200 million add-on to its 6¾% senior notes due Feb. 1, 2022 (Caa1/B-) at 102.375 to yield 6.19% on Tuesday, according to market sources.

The add-on size was increased from €150 million.

The reoffer price came at the rich end of price talk in the 102.25 area.

Joint global coordinator Berenberg Bank will bill and deliver for the debt refinancing deal. Deutsche Bank and Credit Suisse were also joint global coordinators.

HSH Nordbank, ING and M.M.Warburg & Co. were joint bookrunners.

The company priced the original upsized €250 million issue (from €150 million) at par less than three weeks ago, on Jan. 18.

An institutional investor who professed an interest in the original €150 million deal – before the Jan. 18 upsizing – liked it less with the additional debt that the Hamburg shipping company was piling on at the €250 million size, and a whole lot less at the issue's new €450 million size.

However the deal was not necessarily playing to an institutional crowd, a London-based debt capital markets banker said on Tuesday.

Berenberg Bank, which does not have a big footprint among institutional high-yield investors, nevertheless has a sizable retail clientele, the banker said, adding that German retail investors are believed to have been the biggest part of the Hapag-Lloyd order books.

The deal illustrates the hunger for yield out there in the non-institutional world, the banker added.

Suburban Propane seen better

In the secondary sphere, Suburban Propane Partners’ new issue of 5 7/8% notes due 2027 was seen by a trader in a 100¼ to 100¾ bid context on Tuesday afternoon, after the Whippany, N.J.-based distributor of propane, fuel oil and electricity in deregulated markets, along with funding subsidiary Suburban Energy Finance Corp., had priced its quick-to-market issue at par.

At another desk, a market source located those new bonds in a 100¼ to 101 bid range.

Split-rated Symantec strengthens

A trader reported that there had been brisk aftermarket activity in Symantec’s new 5% notes due in April of 2025, after the Sunnyvale, Calif.-based web security provider had priced its upsized deal off the forward calendar at par.

More than $52 million of those new bonds changed hands, putting the credit high up on the day’s Most Actives list – although the trader allowed that much of that buying likely came from high-grade accounts dipping down into split-rated territory to pick up some yield rather than purely junk investors.

He pegged the bonds going home at 101¼ bid.

Post pop continues

Among the deals that priced on Monday, traders saw better levels, on heavy volume in the big new two-part issue that St. Louis-based breakfast cereal, dry pasta and snack-food producer Post Holdings had brought to market.

A trader quoted the company’s new 5½% notes due 2025 at 101 bid, which he said was “kind of unchanged” from the levels seen late Monday after that $1billion tranche had priced at par.

But a second trader saw the bonds having firmed to 101 1/8 bid and called that a gain of more than 5/16 point on the day.

At another desk, a market source said the bonds were moving around between 100 7/8 and 101 1/8 bid, on volume of more than $78 million, making the credit easily the day’s volume leader.

The other part of Post’s quick to market $1.75 billion deal – upsized from an originally announced $1.5 billion – was its $750 million of 5¾% notes due 2027, which had also priced at par.

One of the traders saw those bonds up by 3/8 point on the day, at 100 7/8 bid.

He estimated that more than $62 million of that issue had traded during the day.

A second trader saw those bonds in a 100 5/8 to 100 7/8 bid context.

AmeriGas edges up

Another busy bond was the new AmeriGas Partners 5¾% note due in May of 2027, with over $33 million seen having changed hands, about double Monday’s aftermarket action after that quickly shopped $525 million had priced at par.

One of the traders saw the Valley Forge, Pa.-based propane distributor’s new deal at 100½ bid, 100¾ offered, up a little from initial secondary levels around par bid, 100¼ offered.

At another shop, those notes were seen finishing at 100¼ bid, which was deemed unchanged on the day.

Vertiv firms modestly

Vertiv Intermediate Holding Co.’s new 12%/13% senior PIK toggle notes due 2022 were seen by a trader on Tuesday in a 99½ to 100½ bid range.

That was up from the 99 level where those bonds had traded on Monday.

Those $500 million of bonds had priced at a discounted 98, yielding 12.55%, after the Columbus, Ohio-based provider of thermal management, A/C and D/C power, transfer switches, services and information management systems for the data center and telecommunications industries had downsized its regularly scheduled forward calendar deal from an originally planned $600 million.

Change bonds slightly improved

Going back a little further Change Healthcare Holdings, LLC’s 5¾% notes due 2025 were seen by a trader to have edged up about 1/8 point on the day, ending at 101½ bid.

Volume in the new credit, however, had fallen off to around just $8 million – down from the $23 million seen on Monday and well down from Friday’s more than $80 million, when it had topped the Most Actives after the San Francisco and Nashville-based healthcare information and technology company had priced its $1 billion of bonds at par. That regularly scheduled forward calendar offering had been downsized from an initially shopped $1.235 billion.

The bonds had moved up to around a 101 1/8 to 101½ range when they were freed for secondary dealings and had continued to firm on Monday to around a 101¼ to 101 3/8 bid context.

Indicators are mixed

Statistical market performance measures were mixed for a second consecutive session, after having been higher across the board three sessions before that.

The KDP High Yield index inched up by 1 basis point on Tuesday to close at 72.23, its fifth straight rise and sixth such improvement in the last seven sessions, including Monday, when it had jumped by 10 bps.

Its yield was unchanged at 5.08%, its third such unchanged level in the last five sessions; on Monday, it had come in by 4 bps, its second consecutive narrowing after two steady sessions a row on Wednesday and Thursday.

The Merrill Lynch High Yield index gained 0.03% on Tuesday, on top of Monday’s 0.092% improvement. That was its fifth straight gain and ninth advance in the last 11 sessions, and it lifted the index’s year-to-date return up to 1.916 %, its fifth straight new peak level for the year, topping the previous zenith of 1.886%, set on Monday.

But the Markit CDX Series 27 High Yield index was down 1/8 point on the day to end at 107 7/32 bid, 107 ¼ offered. Its second straight retreat, including Monday’s 3/32 point downturn.

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