Belden brings day’s only high-yield issue; Verallia adds to calendar; secondary market trades mixed

By Paul A. Harris and Stephanie N. Rotondo

Seattle, Oct. 4 – The U.S. high-yield bond market primary continued to be quiet on Tuesday, with the European space taking the lead.

Belden Inc. brought the day’s only new issue, a €200 million issue of senior subordinated notes due 2026 (BB-) at par to yield 4 1/8%.

There was once again a wishy-washy nature in the secondary high-yield bond market on Tuesday.

For instance, the Markit Series 27 CDX index traded off almost a quarter of a point to 104.04 bid, 104.10 offered. However, the KDP High Yield index improved to 71 from 70.9 on Monday.

The yield tightened to 5.2% from 5.22%.

As for the day’s dealings, fresh news was helping Concordia International Corp. bonds head higher.

On Monday, it was reported that the Canadian pharmaceutical company was in talks for a potential equity stake. The discussions are being considered as an alternative, as talks regarding a leveraged buyout have not gotten anywhere.

Continental Resources Inc. was also firming up after the Oklahoma City-based oil and gas producer called $600 million of notes.

Elsewhere in the oil and gas space, bonds traded mixed in line with the broader market. For its part, domestic crude oil ended slightly better on the day, though it was weak for most of the session.

A trader saw Chesapeake Energy Corp.’s 8% second-lien notes due 2022 sliding almost half a point to 101 1/8, while California Resources Corp.’s 8% second-lien notes due 2022 gained a point to close at 68½.

Whiting Petroleum Corp.’s 5¾% notes due 2021 were meantime a shade higher at 95, according to a trader.

Among MLPs, Targa Resources Partners LP’s 5 1/8% notes due 2025 were also a touch better at 101.

Belden prices €200 million

The European primary market continued to dominate new issue news on Tuesday.

Belden priced a €200 million issue of senior subordinated notes due 2026 (BB-) at par to yield 4 1/8%.

The yield printed at the tight end of yield talk in the 4¼% area.

Deutsche Bank, Goldman Sachs and Wells Fargo managed the sale.

Belden, a St. Louis-based manufacturer of networking, connectivity and cable products, intends to use the proceeds, along with cash on hand, to pay off its term loan credit agreement.

Verallia roadshow

Verallia Packaging SAS plans to start a roadshow on Wednesday for a €500 million offering of five-year PIK toggle notes, according to a market source.

The deal is expected to price at the end of the present week.

Credit Suisse is the lead bookrunner.

The Paris-based glass packaging manufacturer plans to use the proceeds to fund a dividend.

Concordia firms

Concordia International’s debt traded up on Tuesday, in the wake of news out on Monday that the company was considering selling a minority equity stake to a private equity firm.

A trader said the 7% notes due 2023 added a deuce to end at 70¼. The 9½% notes due 2022 improved over a point to 74.

Concordia has reportedly been looking for a potential buyer, but the United Kingdom’s proposal to stem exorbitant price increases on certain drugs may have put a damper on those efforts.

The latest buzz is that the company is opting instead to explore selling an equity stake. An influx of capital could help the company deal with its $3 billion debt burden.

Continental makes a call

Continental Resources’ 5% notes due 2022 added “almost 2 points,” a trader said Tuesday, with the bonds closing at 102 1/8.

The upward move came after the company said it was calling all of its $200 million of 7 3/8% senior notes due 2020 and $400 million of 7 1/8% senior notes due 2021.

The company plans to use proceeds from recent and pending asset sales to fund the call. Once completed, the total outstanding debt will be reduced to $6.6 billion, which compares to $7.2 billion as of June 30.

Mixed flows

The cash flows of the dedicated high yield bond funds were mixed on Monday, the most recent session for which data was available at press time, according to a trader.

High yield ETFs saw $450 million of inflows on the day.

However active managed funds sustained $35 million of outflows on Monday, the source added.

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