Hub, WildHorse price; Nufarm, Lycra, Nationstar on tap; OCI, Fidelity active; Syngenta in focus

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 18 – The U.S. high-yield primary market priced $1.52 billion in two deals on Wednesday with several more on the horizon.

In a highly oversubscribed deal, Hub International Ltd. priced a $1.32 billion issue of eight-year senior notes (Caa2/CCC+) at par to yield 7% on Wednesday.

WildHorse Resource Development Corp. priced a $200 million add-on to its 6 7/8% senior notes due Feb. 1, 2025 (Caa1/B) at 102 to yield 6.38% in a quick-to-market trade.

Among upcoming deals, Nufarm Ltd. plans to price a $450 million offering of eight-year senior notes (expected ratings B1/BB-) on Thursday with talk for a yield in the 5¾% area.

Lycra Co.’s $810 million equivalent dual-currency offering, which could upsize to $1 billion, may also price on Thursday, a trader said.

Thursday will also see Nationstar Mortgage LLC launch $2.75 billion of one-year senior unsecured bridge loans, which are intended to lead to three tranches of senior notes. LSB Industries will also wrap its roadshow for $400 million in five-year secured notes.

The euro-denominated market was also busy with Samsonite Finco Sarl, Piaggio & C. SpA and Grupo Antolin-Irausa pricing deals and Gamenet Group SpA on the road.

As the primary market worked to bring new paper into the space, Tuesday’s deals from Fidelity & Guaranty Life Holdings, Inc. and OCI NV remained active with both trading above their issue price.

High beta energy names were the major gainers of the session. Junk bonds from California Resources Corp. and EP Energy LLC saw gains of 1 to 3 points.

However, Syngenta AG’s $4.75 billion of split-rated notes in six tranches were the focus of the secondary market on Wednesday.

The Basel, Switzerland-based agribusiness’ 5.182% senior notes due 2028 and 4.441% senior notes due 2023 (Ba2/BBB-) each saw more than $220 million of bonds trade, with the other tranches also active.

Hub plays to big book

Hub International priced a $1.32 billion issue of eight-year senior notes (Caa2/CCC+) at par to yield 7%, on Wednesday.

The yield printed below the 7¼% to 7½% yield talk.

The order book was said to be five-times oversubscribed, a trader said.

The Wednesday trade came as an acceleration of previously announced timing that had the deal remaining in the market until Thursday.

BofA Merrill Lynch was the left bookrunner.

The Chicago-based insurance brokerage plans to use the proceeds, together with $3.05 billion and C$200 million of term loans, to refinance its capital structure.

WildHorse prices richer

WildHorse priced a $200 million add-on to its 6 7/8% senior notes due Feb. 1, 2025 (Caa1/B) at 102 to yield 6.38% in a quick-to-market trade on Wednesday.

Talk wound richer and richer throughout the hours the deal was in the market, sources said.

The reoffer price came on top of final price talk which had been revised from earlier talk of 101 to 101.5. Initial talk was in the 101 area.

Wells Fargo Securities LLC was the sole bookrunner.

The notes were seen above their issue price after breaking for trade.

While only $9 million of bonds traded, they were seen at 102½ bid, 103 offer, a market source said.

The Houston-based independent oil and natural gas company plans to use the proceeds to repay outstanding debt under its revolver and for general corporate purposes.

Nufarm talk 5¾% area

Looking to Thursday’s session, Nufarm talked a $450 million offering of eight-year senior notes (expected ratings B1/BB-) to yield in the 5¾% area.

Books close at 10 a.m. ET Thursday and the deal, via lead bookrunner UBS, is set to price thereafter.

Meanwhile, Lycra (Eagle Intermediate Global Holding BV and Ruyi Finance LLC) has been roadshowing $810 million equivalent of secured paper made up of $500 million of seven-year notes whispered in the 8% area and €250 million of five-year notes whispered in the 6% area.

As the market awaits official talk, the deal could upsize to $1 billion equivalent, a trader said, and added that it could price Thursday.

LSB Industries has been shopping $400 million of five-year secured notes on a roadshow set to wrap up Thursday.

There have been no updates on the 9½% to 10% whisper, a trader said.

And Nationstar Mortgage is set to launch $2.75 billion of one-year senior unsecured bridge loans on a Thursday lender call. The deal is intended to lead to three tranches of senior notes, $1 billion of five-year, $1 billion of eight-year and $750 million of 10-year notes.

Samsonite upsizes

In the euro-denominated market, Samsonite Finco Sarl, a subsidiary of Samsonite International SA, priced an upsized a €350 million issue of eight-year senior notes (S&P: BB+) at par to yield 3½%.

The issue size was increased from €300 million.

The yield printed at the tight end of the 3½% to 3 5/8% yield talk and inside initial talk in the 3¾% area.

Joint bookrunner Morgan Stanley will bill and deliver. BofA Merrill Lynch, HSBC and SunTrust Robinson Humphrey Inc. are also joint bookrunners.

Piaggio prices tight

Piaggio & C. priced €250 million issue of seven-year senior notes (expected ratings B1/BB-) at par to yield 3 5/8% on Wednesday, according to market sources.

The yield printed at the tight end of yield talk that was set in the 3¾% area and inside initial price talk in the 4% area.

Physical bookrunner Banca IMI will bill and deliver. BNP Paribas and BofA Merrill Lynch are also physical bookrunners. Banca Akros, HSBC, ING, Mediobanca and UniCredit were joint bookrunners.

The Pontedera, Italy-based maker of two-wheeled motor vehicles and compact commercial vehicles plans to use the proceeds to refinance its 4 5/8% notes due 2021.

Antolin at the tight end

Grupo Antolin-Irausa priced a €250 million issue of eight-year senior secured notes (Ba3/BB-) at par to yield 3 3/8% on Wednesday, according to a market source.

The yield printed at the tight end of yield talk that was announced in the 3½% area.

Deutsche Bank managed the sale.

The Burgos, Spain-based supplier of automotive components plans to use the proceeds, plus a €50 million increase in its existing senior facilities and €100 million of other debt, to repurchase or redeem €400 million of senior secured notes due 2022.

One euro deal remained on this week’s calendar after the Wednesday close in London, according to a sell-side source based there.

Rome-based Gamenet Group has been on the road with €225 million of five-year senior secured floating-rate notes, talked at Euribor plus 400 to 425 bps.

Also, Credit Suisse sent memos to investor advising them that a deal from a credit in the technology, media and telecom sector is set to roll out Thursday.

The notably busy European primary market should remain busy for the remainder of the present week and through the April 26 week as well, the sell-side source said, adding that there are still deals in the visible pipeline.

Tuesday’s deals strong

As new paper entered the space, Tuesday’s deals remained active in the secondary market.

Fidelity & Guaranty’s 5½% senior bullet notes (Ba2) due 2025 were among the most actively traded during Wednesday’s session with more than $51 million on the tape.

The notes were trading well above their issue price of 99.5. They were seen up about 5/8 point with the last prints at par ¾, a market source said.

Fidelity & Guaranty priced a $550 million issue of the 5½% seven-year senior bullet notes (Ba2) at 99.5 to yield 5.587% on Tuesday.

OCI’s dollar-denominated tranche of 6 5/8% senior secured notes (B1/BB-/BB-) due 2023 also remained active on Wednesday.

The notes were trading in a range of 101 3/8 to 101½ with more than $50 million of bonds traded, a market source said.

The notes were slightly improved from Tuesday where they were seen trading at 101.25.

In a dual-currency debt refinancing deal, OCI priced $650 million of dollar-denominated notes at par to yield 6 5/8% on Tuesday.

Energy names jump

The steady rise of the energy sector over the past week and a half continued on Wednesday with some names seeing a 1 to 3 point increase, a market source said.

High beta names were the big gainers, the source said, as the price of West Texas intermediate crude oil for May delivery surged by $2 on Wednesday to $68.75.

California Resources 8% senior notes due 2022 were up 3 points to trade at 88.5. The notes were also a major volume mover during Wednesday’s session with more than $50 million of bonds traded, a market source said.

The notes closed Tuesday at 85.5.

EP Energy’s 8% senior notes due 2025 also gained 1 3/8 points in active trading on Wednesday. The notes were seen trading up to 73 1/8, a market source said.

Syngenta in focus

While new paper and the energy sector were active in the secondary market on Wednesday, they were dwarfed by the high-volume trading of Syngenta’s split-rated notes.

While there was little change in Syngenta’s 5.182% senior notes due 2028 (Ba2/BBB-/BBB) and 4.441% senior notes due 2023 (Ba2/BBB-/BBB), more than $220 million of bonds from each issue traded on Wednesday.

Syngenta’s 5.676% senior notes due 2048, 5.182% senior notes due 2028 and 3.933% senior notes due 2021 (Ba2/BBB-/BBB) were also active.

The notes were largely unchanged in the high volume trading, a market source said, with most trades between par and par ¼.

In addition to pricing the big new deal on Tuesday, the Basel, Switzerland-based agribusiness announced Wednesday the Environmental Protection Agency had cleared its Fusilade DX herbicide for tank mixing for weed control for soybean crops.

Syngenta also announced Wednesday that it is in the early development phase of producing an insecticide active ingredient to help control the spread of Malaria.

Syngenta was downgraded by Moody’s Investor Service to junk in May 2017 due to China National Chemical Corp.’s acquisition of the company. The credit downgrade was the result of the pressure ChemChina’s highly leveraged capital structure was anticipated to place on Syngenta.

Indexes mixed

Wednesday marked another day of gains for some market indicators while the CDX continued to slip.

The KDP High Yield index was up another 7 basis points on Wednesday to 71.23 with the yield dropping to 5.56%. The index has now seen 10 consecutive trading days of gains.

The Merrill Lynch High Yield index also continued to climb higher into positive territory on Wednesday.

The index was up 4.1 bps on Wednesday with the year-to-date return now 0.582%.

The index turned positive on April 12 after a long stretch of negative year-to-date returns.

The CDX high yield 30 index dipped slightly lower on Wednesday. The index was down 5 bps to close Wednesday at 107.23. The index dipped 4 bps to 107.28 on Tuesday after climbing to 107.32 on Monday.

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