DISH on tap, existing paper drops; Tenneco, Nielsen junk roadshows begin; CSC hits new low

By Abigail W. Adams

Portland, Me., Nov. 3 – The domestic high-yield primary market paused on Thursday with no new deals announced or priced as markets continued to digest Wednesday’s hawkish comments from Federal Reserve chair Jerome Powell.

However, the pipeline is full with three deals totaling $4.96 billion on deck, including two leveraged buyout deals that have long been on hold due to market conditions.

DISH Network Corp.’s $2 billion offering of five-year non-call-two-year senior secured notes (Ba3/B+) is expected on Friday.

The new offering piqued the interest of some sources with the notes looking cheap based on early guidance.

However, DISH’s capital structure was taking a hit on the new offering with its existing notes down 1 to 4 points on Thursday.

Neptune BidCo US Inc. started a roadshow for its $1.96 billion of senior secured notes due April 15, 2029 backing the buyout of Nielsen Holdings plc, and Pegasus Merger Co. started its roadshow for $1 billion of six-year non-call-three-year senior secured notes backing the buyout of Tenneco Inc.

Interest in the buyout deals was tepid with Tenneco not attracting much interest at its initial price talk, a source said.

The deals are being marketed against a weak tape with heavy selling continuing in the secondary space as the sector responds to Powell’s comments indicating the terminal rate may be higher than anticipated.

The cash bond market fell another ¾ point to 1 point on Thursday.

While the market was weak across the board, Altice USA Inc. subsidiary CSC Holdings LLC’s senior notes were the largest losers in the space with the notes down 3 to 6 points post-earnings.

And while market conditions deteriorated over the past two session, inflows remained strong leading into Wednesday’s session.

High-yield mutual and exchange-traded funds reported inflows of $4.278 billion in the week through Wednesday’s close, according to the Refinitiv Lipper US Fund Flows report.

DISH on tap

DISH’s $2 billion offering of five-year non-call-two-year senior secured notes is on tap for Friday with the pricing attractive, a source said.

Early guidance has the deal coming with a 2-point discount for an all-in yield in the mid- to high 11% area.

The pricing was cheap for secured paper from a solid company, a source said.

However, DISH’s capital structure was taking a hit on the new offering.

DISH’s 5¾% senior secured notes due 2028 (Ba3/B+) were among the hardest hit with the notes falling 4½ points in heavy volume.

The 5¾% notes were wrapped around 76 heading into the market close with the yield 11 3/8%.

There was $20 million in reported volume.

The satellite broadcaster’s 5 1/8% senior notes due 2029 (B3/B) fell 3 points to close Thursday at 63 3/8 with the yield 13¾%.

The 5¼% senior secured notes due 2026 fell 2¾ points to 82¾ with the yield 10½%.

There was $21 million in reported volume.

DISH’s new offering was cheaper on a relative basis and carried a shorter duration, a source said.

The new deal sparked a repricing of its outstanding issues with its longer-duration notes heavy hit.

Tepid demand

Two large leveraged buyout deals previously shut out of the market are on the road and the demand for the new paper has been tepid, a source said.

Neptune BidCo US Inc. started a roadshow on Thursday for its $1.96 billion of senior secured notes due April 15, 2029 backing the buyout of Nielsen Holdings.

Early whispers have the deal coming with a coupon of 9¼% to 9½% and an OID for an all-in yield of 10% to 11%.

Pegasus Merger Co. also started its roadshow for its $1 billion of six-year non-call-three-year senior secured notes backing the buyout of Tenneco.

Tenneco was whispered with a coupon of 8% and an OID for an all-in yield of 12%, according to market sources.

However, the deal did not generate much interest at its initial talk, a source said.

Tenneco has been on hold since July when a $2 billion tranche of secured notes and $1 billion tranche of unsecured notes was initially marketed.

However, the deal announced on Monday was greatly reduced in terms of size with a large portion of financing for Apollo’s buyout of Tenneco not going to be syndicated, a source said.

CSC Holdings’ new low

CSC Holdings’ notes were the largest losers of Thursday’s session with its senior notes dragged down 3 to 6 points in active trading after parent company Altice USA reported earnings.

The 7½% senior notes due 2028 (B3/B) sank 6 points to close Thursday at 80½ with a yield of 12½%.

The 5¾% notes due 2030 sank 5¾ points to 71 with a yield of 11 7/8%.

The 4 5/8% notes due 2030 were down 5½ points to 66½ with a yield of 11%.

CSC Holdings’ 6½% senior guaranteed notes due 2029 (Ba3/BB-) sank 3 5/8 points to close Thursday at 89½ with a yield of 8¾%.

The 5 3/8% senior guaranteed notes due 2028 fell 4 points to 87½ with the yield now 8 3/8%.

Thursday marked a new low for several issues in CSC Holdings capital structure, a source said.

Indexes

The KDP High Yield Daily index sank 50 points to close Thursday at 50.87 with the yield 7.94%.

The index fell 10 points on Wednesday, 3 points on Tuesday and 12 points on Monday.

The ICE BofAML US High Yield index sank 92.1 basis points with the year-to-date return now negative 13.182%.

The index was down 9.2 bps on Wednesday, gained 1.9 bps on Tuesday after falling 36 bps on Monday.

The CDX High Yield 30 index sank 62 bps to close Thursday at 98.32.

The index fell 69 bps on Wednesday, gained 42 bps on Tuesday and fell 72 bps on Monday.

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