Summit Materials, Genesis Energy price; GFL, Pike at a premium; funds add $295.7 million

By Paul A. Harris and Abigail W. Adams

Portland, Ore., Nov. 30 – A pair of issuers raised approximately $1.39 billion during Thursday’s session in the dollar-denominated high-yield primary market.

Summit Materials, LLC and Summit Materials Finance Corp. priced an $800 million issue of seven-year senior notes (Ba3/BB) at par to yield 7¼%, on top of final yield talk and inside of earlier talk in the 7½% area. Initial guidance was in the high-7% to 8% area.

The deal was heard to be as much as six-times oversubscribed at 7 3/8%, which was the tight end of the official talk prior to its revision, a bond trader said.

The Summit Materials 7¼% notes due 2031 broke to par 5/8 bid, par 7/8 offered, the source added.

Summit Materials priced at the conclusion of a brief roadshow.

Meanwhile in drive-by action Genesis Energy, LP and Genesis Energy Finance Corp. priced an upsized $600 million issue (from $550 million) of 8¼% five-year senior notes (B3/B) at 98.961 to yield 8½%.

The coupon printed at the tight end of the 8¼% to 8½% coupon talk. The price came in line with discount talk of approximately one point. The yield came at the tight end of the 8½% to 8¾% yield talk. Initial guidance was in the high 8% to 9% area.

Demand for the bonds was 1.7-times deal size after price talk, according to a bond trader who added that a significant number of potential buyers dropped out as pricing conversations tightened.

In the euro-denominated market Crown European Holdings SA priced an upsized, quick-to-market €500 million issue (from €400 million) of senior bullet notes due March 15, 2029 (Ba1/BB+) at par to yield 4¾%.

The yield printed at the tight end of the 4¾% to 4 7/8% final yield talk, which had been revised from earlier talk in the 5% area.

Those bonds broke to par bid, par ½ offered, a market source said.

Secondary largely flat

Meanwhile, the secondary space saw another active session on Thursday with new paper and end-of-month activity driving volume.

While active, the market was largely flat with the latest personal consumption expenditure report doing little to move the market, which has already priced in an end to rate hikes, a source said.

The deals to clear the primary market the previous session were putting in strong performances in the secondary space.

GFL Environmental Inc.’s new 6¾% senior secured notes due 2031 (Ba3/BB-) maintained the strong gains made on the break in heavy volume.

Pike Corp.’s 8 5/8% senior notes due 2031 (B3/B-) were also trading with a strong premium, although activity in the name settled.

Outside of recent issues, Western Digital Corp.’s 4¾% senior notes due 2026 (Ba2/BB-) made strong gains in heavy volume on the heels of an investor’s presentation and an improved outlook for the industry.

VistaJet Malta Finance plc’s senior notes (B3/B-) also made large gains with the notes nearly eliminating losses after posting numbers early in the week.

Meanwhile, high-yield mutual funds and exchange-traded funds continued to see inflows with $295.7 million entering the space in the week through Wednesday’s close, according to the Refinitiv Lipper Fund Flow.

GFL holds gains

GFL Environmental’s 6¾% senior secured notes due 2031 were holding on to the strong gains made on the break in active trade on Thursday.

The 6¾% notes were trading in the par ¾ to 101¼ context throughout the session and stood poised to close the day wrapped around 101, a source said.

There was $41 million in reported volume.

GFL Environmental priced an upsized $1 billion, from $700 million, issue of the 6¾% notes at par in a Wednesday drive-by.

The yield printed at the tight end of the 6¾% to 6 7/8% yield talk.

Pike strong

While activity in the name tempered, Pike’s new 8 5/8% senior notes due 2031 continued to put in a strong performance in the aftermarket.

The notes traded in a tight range of par 7/8 to 101¼ during the session and were trading in the 101 1/8 to 101¼ context heading into the market close.

Pike priced a $400 million issue of the 8 5/8% notes at par in a Wednesday drive-by.

The yield printed at the tight end of yield talk in the 8¾% area.

The deal was heard to be oversubscribed with demand about two-times deal size.

Western Digital gains

Western Digital’s 4¾% senior notes due 2026 were in focus on Thursday with the notes logging strong gains.

The 4¾% notes added 1½ to 2 points outright.

They opened the day on a 95-handle and continued to climb as the session progressed.

The 4¾% notes were trading in the 96 to 96½ context heading into the market close, a source said.

The yield narrowed to about 6½%.

There was $54 million in reported volume.

The gains in the name came after the company presented at an investors conference, a source said.

The outlook for the industry has also improved.

VistaJet reverses course

VistaJet’s senior notes reversed course and nearly eliminated the losses incurred after posting earnings earlier in the week.

“The whole capital structure is up today,” a source said. “They were busy.”

The business aviation company’s 9½% senior notes due 2028 jumped 4 points in active trading.

They traded up to an 83-handle in intraday activity but lost steam heading into the close.

The notes were trading in the 82 to 82½ context heading into the close with the yield about 15%, a market source said.

There was $15 million in reported volume.

The notes have been on a steady slide since posting numbers on Monday with the notes trading down to a 77-handle the previous session.

VistaJet’s 7 7/8% senior notes due 2027 also bounced 4 points with the notes closing the day on an 84-handle.

The notes were trading in the 84 to 84½ context heading into the market close with the yield about 13 7/8%.

There was $9 million in reported volume.

Both tranches have now eliminated their losses from a post-earnings sell-off earlier in the week.

Indexes

The KDP High Yield Daily index was down 14 basis points to close Thursday at 49.34 with the yield 7.39%.

The index gained 37 bps on Wednesday, rose 9 bps on Tuesday and was flat on Monday.

The ICE BofAML US High Yield index shaved off 6.6 bps with the year-to-date return now 9.422%.

The index gained 66.2 bps on Wednesday, 29.9 bps on Tuesday and 21.3 bps on Monday.

The CDX High Yield 30 index gained 9 bps to close Thursday at 103.90.

The index was up 5 bps on Wednesday and 11 bps on Tuesday.

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