Williams Scotsman prices; BMC launches roadshow; FS Energy, PGT on tap; Altice in focus

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 31 – The domestic primary market saw one deal price and the forward calendar build on Tuesday with more deals to come before the week draws to a close.

Williams Scotsman International Inc. priced a $300 million issue of five-year senior secured notes (B2/B) at par to yield 6 7/8%. The notes were seen above their issue price after breaking for trade.

In a highly anticipated deal, BMC Software disclosed plans to start a roadshow on Wednesday for a $1,825,000,000 equivalent two-part offering of senior notes (Caa2/CCC+), to be issued in dollar- and euro-denominated tranches.

Before the week draws to a close, FS Energy, LLC plans to price a $500 million offering of five-year senior secured bullet notes (Ba3/BB-) and PGT Innovations, Inc. plans to price a $315 million offering of eight-year senior notes (B3).

Meanwhile, Intrepid Aviation Group Holdings, LLC and Intrepid Finance Co.’s newly priced 8½% senior notes due 2021 continued to see light trading volume in the secondary space, despite the shortage of new paper.

Altice France SA’s recently priced 8 1/8% senior notes due Feb. 1, 2027 (B1/B-) returned to focus with the notes gaining about ¼ point in high-volume trading.

AK Steel Corp.’s junk bonds were under pressure after the company missed analyst expectations in its second-quarter earnings report.

Sprint Corp.’s junk bonds were seen improved on Tuesday with optimism growing over the company’s merger with T-Mobile and first-quarter earnings to be announced before the market open Wednesday.

Williams Scotsman inside of talk

In the Tuesday primary market, Williams Scotsman priced a $300 million issue of five-year senior secured notes (B2/B) at par to yield 6 7/8%.

The yield printed 12.5 basis points beneath the tight end of the 7% to 7¼% price talk and well inside of initial talk in the 7¼% to 7½% area.

Deutsche Bank, Barclays, Morgan Stanley, BofA Merrill Lynch, Credit Suisse and ING were the joint bookrunners for the acquisition financing deal.

The notes were seen above their issue price after breaking for trade. They traded as high as 101 after hitting the secondary space but the notes were trading in the par ¼ to par ½ range shortly before the market close, a source said.

About $13 million of the bonds had traded by late afternoon.

BMC sets roadshow

In a deal that market watchers have been looking for since the immediate aftermath of the July 4 holiday in the United States, BMC Software disclosed plans to start a roadshow on Wednesday in New York for a $1,825,000,000 equivalent two-part offering of senior notes (Caa2/CCC+), to be issued in dollar- and euro-denominated tranches.

Tranche sizes remain to be determined.

Goldman Sachs is the left bookrunner for the LBO deal, which is set to price in the Aug. 6 week.

FS Energy secured bullet

Nearer at hand, FS Energy plans to price a $500 million offering of five-year senior secured bullet notes (Ba3/BB-) on Thursday.

A roadshow started Tuesday.

Initial price talk has the deal coming to yield in the 8% area.

JP Morgan, SG and BMO are the joint bookrunners for the debt refinancing deal.

PGT Innovations starts roadshow

PGT Innovations also started a roadshow on Tuesday for a $315 million offering of eight-year senior notes (B3).

Initial price talk has the deal coming with a yield in the 7% area, a trader said.

The deal is set to price later in the week.

SunTrust Robinson Humphrey is the left bookrunner for the acquisition financing.

Intrepid Aviation improves

Intrepid Aviation’s recently priced 8½% senior notes due 2021 continued to see light trading volume in the secondary space.

The notes were quoted at par 3/8 bid, 101 1/8 offered on Tuesday.

They were seen at par ½ bid, par ¾ offered after breaking for trade on Monday.

Intrepid Aviation priced a downsized $500 million issue of the notes at par on Monday. The initial size had been $515 million.

The initial coupon and yield of 8½% will increase 50 basis points if leverage is above 3.5x in 12 months.

Sources pointed to the short-duration of the notes as a drawback.

Altice in focus

Altice’s recently priced 8 1/8% senior notes due 2027 returned to focus in the secondary space with the notes seeing modest gains in high-volume trading.

The 8 1/8% notes were quoted at 102 bid, 102½ offered and were seen trading just north of 102.25, sources said. The notes were quoted at 101 7/8 bid, 102 1/8 offered on Monday.

The notes were trading up about ¼ point with about $24 million bonds on the tape by late afternoon, according to a market source.

Altice priced an upsized $1.75 billion tranche of the 8 1/8% notes at par on July 17 as part of a dual-currency offering.

While the notes dominated trading activity for much of the July 17 week, they had drifted out of focus.

The return of the high-volume trading comes after Altice Europe subsidiary Altice Dominicana sold its Teletorres del Caribe tower company to Phoenix Tower Intl. for $170 million, according to a company news release.

The activity also comes ahead of Altice USA’s second-quarter earnings announcement on Aug. 2.

AK Steel down

AK Steel’s junk bonds were under pressure after the company reported second-quarter earnings after the market close on Monday.

Ak Steel’s 6 3/8% senior notes due 2025 down 1 point to 92 bid, 92½ offered on Tuesday, a market source said.

AK Steel reported earnings per share of 18 cents for the second quarter, which missed analyst expectations of 20 cents a share.

The financial reports were impacted by a fire and lightning strike at the company’s production facilities.

However, the Ohio-based steel company saw rising steel prices as a result of the 25% tariff on imported steel, which offset the rising costs of raw materials, CNBC reported.

Sprint improves

Sprint’s junkbonds were seen improved on the cusp of the telecommunications company’s first-quarter earnings report.

Sprint’s 7 5/8% senior notes due 2025 have gained 1 point since last week, a market source said. They were seen at 103¾ bid, 104¼ offered on Tuesday. Last week they were seen at 102¾ bid.

“They’re inching up,” the source said.

Sprint’s 7 7/8% senior notes due 2023 also saw slight improvement on Tuesday. The notes were up 3/8 point to trade at 106¾.

The 7 7/8% notes were active in the secondary space with more than $18 million of the bonds on the tape by late afternoon.

Sprint is expected to report first-quarter earnings prior to the market open on Wednesday.

There is also optimism growing over regulatory approval for Sprint’s merger with T-Mobile with a positive New York Times article published on Tuesday, a source said.

Indexes gain

Benchmarks for the high-yield secondary market saw gains on Tuesday after opening the week mixed.

The KDP High Yield Daily index was up 9 basis points to close Tuesday at 70.53 with the yield now 5.84%. The index saw an 11 bps rise on Monday.

The CDX High Yield 30 was up 12 bps to close Tuesday at 107.04. The index was down 22 bps on Monday.

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