Rocket Software, Brightline, Tutor Perini join calendar; Transocean softer; Ardagh drops on new financing

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 15 – Although no new issues priced during the Monday high-yield primary market session, the active forward calendar saw a substantial buildup.

Brightline East LLC, Rocket Software Inc., and Tutor Perini Corp. joined the calendar with offerings that are slated to price over the next two sessions.

Meanwhile, it was another soft day in the secondary space on Monday with Treasury yields creeping higher as markets price in reduced rate cut expectations.

The cash bond market was off another ¼ point with the downturn in the market threatening to form a trend.

The relatively strong performance of new and recent issues continued to wane with several deals from the previous week below par.

Transocean Inc.’s recently priced tranches of priority guaranteed notes (Caa1/B-) sank further in heavy volume on Monday with the notes now trading firmly on a 99-handle.

However, Ardagh Group SA’s senior notes were the largest losers of the session, tumbling 4 to 5 points after the company entered into a new senior secured credit facility with Apollo.

Calendar builds

Although no new issues priced during the Monday high-yield primary market session, the active forward calendar saw a substantial buildup.

Brightline East scheduled an investor call at 11:30 a.m. ET on Tuesday for its $1.25 billion offering of senior secured notes due Jan. 31, 2030.

Initial guidance has the notes coming to yield 10% to 11%, with pricing set for Wednesday.

Rocket Software plans to price $1 billion of senior secured notes due Nov. 28, 2028 (B3/B-/BB-) on Tuesday.

Initial guidance is in the 9% area, according to a trader who added that the deal launched with $1.2 billion of reverse inquiry.

Pricing is set for the April 22 week.

And Tutor Perini plans to price a $400 million offering of senior notes due 2029 (Caa1/CCC+) on Wednesday.

Initial guidance has it pricing at a discount to yield in the high-12% to 13% area, a trader said, adding that the deal was fully spoken for in reverse inquiry ahead of being announced on Monday morning.

Transocean softer

Transocean’s recently priced tranches of priority guaranteed notes sank further below par in heavy volume on Monday.

The 8¼% notes due 2029 and 8½% notes due 2031 were off another ¼ to 3/8 point.

The 8¼% senior notes due 2029 continued to outperform their longer duration counterpart with the notes trading in the 99½ to 99¾ context heading into the market close, a source said.

The 8½% senior notes were trading in the 99 3/8 to 99 5/8 context.

There was $24 million and $29 million in reported volume respectively.

Both tranches priced at par on April 11.

Ardagh

Ardagh was in focus on Monday with its longer duration notes tumbling while its 5¼% senior secured notes due 2025 (B1/B-) jumped after the company entered into a new credit facility with Apollo.

Proceeds from the new term loans will be used to redeem the company’s 5¼% senior secured notes due 2025.

The 5¼% notes jumped 3 points following the announcement and were trading at 99¾ heading into the market close, a source said.

However, the company’s longer-duration notes sank 4 to 6 points on the news with the $1.1 billion in new debt attached to an unrestricted subsidiary.

While the new credit facilities enable Ardagh to tackle its 2025 maturity, “everyone else is getting left in the cold,” a source said.

Ardagh Packaging Finance plc’s 4 1/8% senior secured notes due 2026 (B1/B-) tumbled 5 points to 85 with the yield now 11 5/8%, a source said.

There was $26 million in reported volume.

Ardagh’s 5¼% senior notes due 2027 (Caa1/CCC+) dropped 6 points to 51 with the yield rising to 29¼%.

There was $20 million in reported volume.

The new credit facilities from Apollo come as creditors work with advisers in preparation for debt talks.

Ardagh continues to evaluate its capital structure and may further reduce debt through open market purchases, tender offers, exchange offers and/or privately negotiated transactions, the company said in a press release.

Indexes

The KDP High Yield Daily index was down 20 basis points to close Monday at 49.44 with the yield now 7.32%.

The ICE BofAML US High Yield index was down 27.2 bps with the year-to-date return now 0.077%.

The CDX High Yield 30 index dropped 59 bps to close Monday at 105.36.

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