Market opens to good tone on Friday; Western Digital to roadshow $5.5 billion

By Paul A. Harris

Portland, Ore., March 18 – The high-yield market opened to a good tone on Friday, according to a trader who was marking cash bonds up ¼ to ½ point.

Energy names were up as much as ½ point on stronger oil prices, the trader said.

The bonds of Whiting Petroleum Corp. were rallying on news that the company entered into an exchange agreement which will see it swap $429.7 million of unsecured notes for the same amount of new convertibles.

Whiting’s subordinated notes were up about 10 points on the news, the trader said, adding that the regular unsecured bonds were up about 7 points.

Western Digital plans deal

The dollar-denominated new issue market generated news on Friday.

Western Digital Corp. plans to start a roadshow on Monday for $5.5 billion of bonds in two tranches.

The deal features a $1.5 billion tranche of split-rated of seven-year senior secured notes (Ba1/BBB-/BBB-) as well as a $4.1 billion tranche of straight speculative-grade eight-year senior unsecured notes (Ba2/BB+/BB+).

The secured tranche comes with initial guidance in the low 6% context. The unsecured tranche has initial guidance in the low 9% context.

The roadshow wraps up on March 28 and the Rule 144A and Regulation S deal is expected to price on March 29.

Bank of America Merrill Lynch, J.P. Morgan, Credit Suisse, RBC and HSBC are the joint bookrunners for the deal to help fund Western Digital’s acquisition of SanDisk Corp.

Surgery Partners roadshow

Elsewhere Surgery Center Holdings, Inc. plans to start a roadshow on Monday in Los Angeles for a $400 million offering of five-year senior notes.

The deal is set to price early in the March 28 week.

Jefferies is the left bookrunner. BofA Merrill Lynch, Goldman Sachs and Morgan Stanley are the joint bookrunners.

The issuer is a subsidiary of Nashville, Tenn.-based Surgery Partners, Inc., a provider of surgery and related health care services. It plans to use the proceeds to repay its existing second-lien debt, as well as to pay down its revolver and for general corporate purposes.

And MDC Partners Inc. talked its $800 million offering of eight-year senior notes (expected B3/confirmed B+) to yield 6½% to 6¾%.

Official talk comes on top of initial guidance, sources say.

The books were scheduled to close late Friday morning and the deal is set to price subsequently.

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