Italmatch Chemicals prices; Intelsat lower on satellite issues; U.S. Steel negative; Tempur Sealy up

By James McCandless and Paul A. Harris

San Antonio, April 10 – In Wednesday's high-yield primary market Italmatch Chemicals SpA priced a €200 million add-on to the senior secured floating-rate notes due 2024, as the secondary was mixed with a focus on telecom and manufacturing.

Intelsat SA’s notes ended negative as one of the company’s satellites experiences communications issues.

United States Steel Corp.’s issues were pushed lower on worries about oversupply in the steel industry.

Tempur Sealy International, Inc.’s paper moved upwards of par as MattressFirm’s chief executive officer resigns.

Italmatch, rich to guidance

Italmatch Chemicals SpA priced a €200 million add-on to the Fire (BC) SpA Euribor plus 475 basis points senior secured floating-rate notes due Sept. 30, 2024 (expected B3/confirmed B) at 99.75.

The reoffer price came rich to initial guidance of 99 plus or minus 0.25 cents.

Joint global coordinator and joint active bookrunner BNP Paribas will bill and deliver. Goldman Sachs was a joint global coordinator and joint active bookrunner. Citigroup was a joint global coordinator and joint bookrunner. Credit Agricole CIB was a joint bookrunner.

Proceeds will be used to refinance debt under a bridge facility agreement entered into in order to fund the company’s acquisition of all the membership interests of BWA Holdings LLC on Feb. 14.

Ferratum talk 98 to 99

In a generally quiet new issue market, Finland-based Ferratum Oyj talked a €100 million add-on to the Ferratum Capital Germany GmbH three-month Euribor plus 550 bps senior floating-rate notes due April 24, 2023 (Fitch: BB-) at 97 to 98.

Books close Thursday.

Pareto is the bookrunner.

Meanwhile the dollar-denominated calendar featured just one deal at Wednesday's open.

Australia-based Mineral Resources Ltd. is having roadshow for $750 million offering of eight-year senior notes (S&P: B+), which is in the market with early guidance in the 7¾% to 8% area and is expected Friday business.

And look for a master limited partnership to bring a debt refinancing deal as a Thursday drive-by, via Wells Fargo, a market source advised.

Intelsat lower

In the telecom space, Intelsat’s notes saw a downward trend, traders said.

Intelsat Jackson Holdings SA’s 5½% paper due 2023, while being pushed as low as 90 bid, ended the day level at 90½ bid, according to Trace data. Intelsat (Luxembourg) SA’s 8 1/8% paper due 2023 shaved off 1 point to close at 75½ bid.

On Wednesday morning, the Luxembourg-based satellite operator reported a service outage on a satellite serving the Latin America, Caribbean and North Atlantic regions.

The company said that damage to the propulsion system caused a leak of the satellite’s propellant and communications are intermittent.

“It’s not as bad as some of the other issues they’ve had recently,” a trader said. “But everyone’s eyes are on it, so responses to news like this might not be proportional.”

U.S. Steel negative

Meanwhile, Pittsburgh-based steel manufacturer U.S. Steel’s senior notes continued a negative trend, market sources said.

The 6¼% senior notes due 2026 lost ½ point to close at 92 bid.

The 6 7/8% senior notes due 2025 fell 1 3/8 points to close at 97 bid.

The notes saw a second day of outsized activity after a Credit Suisse analyst downgraded the name on Tuesday.

The analyst raised concerns about the company’s margins amid a potential oversupply of domestic steel.

Tempur Sealy up

Mattress manufacturer Tempur Sealy’s paper was gaining, traders said.

The 5½% senior unsecured notes due 2026 rose ¼ point to close at par ¼ bid.

On Wednesday, the Lexington, Ky.-based company was lifted after news broke of the departure of Mattress Firm chief executive officer Steve Stagner.

The news was seen as a positive step in repairing relations between Tempur Sealy and Mattress Firm, which broke down in 2017.

Indexes

Two high-yield benchmarks maintained positivity in the middle of the week.

The KDP High Yield Daily index gained 1 bp by the end of Wednesday with the yield now at 5.75%.

The index rose 1 bp on Tuesday following a 7 bps rise on Monday.

The ICE BofAML US High Yield index added 8 bps with the year-to-return date now standing at 8.16%.

The index was up 1.4 bps on Tuesday and 9.8 bps on Monday.

The index broke the 8% year-to-date returns threshold on Monday after a quick trip past 7% on March 26.

Tuesday inflows

The daily cash flows of the dedicated high-yield bond funds were positive on Tuesday, a trader said.

Actively managed high-yield funds saw a hefty $220 million of inflows on the day, the source said, noting those inflows were fairly concentrated.

High-yield ETFs saw $54 million on Tuesday, the trader said.

With four of five sessions in the tally, the combined funds are tracking $607 million of inflows.

© 2015 Prospect News.
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