Wynn Resorts, NCR, Ardagh add-on price; LifePoint in focus; Continental Resources adds to gains

By Paul A. Harris and Abigail W. Adams

Portland, Me, April 7 – The domestic high-yield primary market remained active on Tuesday with three drive-by deals pricing and one more joining the forward calendar.

Wynn Resorts priced an upsized $600 million issue of five-year senior notes (existing B1/confirmed BB-).

NCR Corp. priced a $400 million issue of five-year senior notes (B3/BB-).

And Ardagh Packaging priced a $200 million add-on to the 5¼% senior secured notes due April 30, 2025 (B1/BB/BB+) it priced last Friday.

Ferrellgas, LP also announced a $575 million offering of five-year senior secured notes.

Meanwhile, the secondary space continued to firm on Tuesday with new paper jumpstarting trading activity.

LifePoint Health, Inc.’s recently priced 6¾% senior secured notes due 2025 (B1/B) were in focus with the notes making nominal gains in the high-volume activity.

TransDigm Inc.’s 8% senior secured notes due 2025 (Ba3/B+) saw renewed attention with the notes again on the rise on a strong day for the commercial aerospace sector.

Continental Resources Inc.’s senior notes continued to add to their gains during Tuesday’s session with the company the latest fallen angel to enter junkbondland.

Active primary

The Tuesday primary market session came with multiple new deal announcements.

Crisp executions were the order of the day.

In drive-by action, Wynn Resorts priced an upsized $600 million issue of five-year senior notes (existing B1/confirmed BB-) at par to yield 7¾%.

The issue size increased from $350 million.

The yield printed 12.5 basis points inside of yield talk in the 8% area.

NCR Corp. priced a $400 million issue of five-year senior notes (B3/BB-) at par to yield 8 1/8% in a Tuesday drive-by, according to market sources.

The yield printed 25 bps inside the tight end of yield talk in the 8½% area.

Ardagh Packaging priced a $200 million add-on to the 5¼% senior secured notes due April 30, 2025 (B1/BB/BB+) at par to yield 5.249% on Tuesday.

The issue price came on top of price talk.

The original $500 million issue priced at par just four days ago, on April 3.

Also on Tuesday, Overland Park, Kansas-based propane supplier Ferrellgas announced a $575 million offering of five-year senior secured notes.

LifePoint in focus

LifePoint’s recently priced 6¾% senior notes due 2025 (B1/B) were in focus on Tuesday, although the notes were only making minor gains in the high-volume activity.

The 6¾% notes traded in a range of par 1/8 to par ¾ during Tuesday’s session although the majority of prints were between par ¼ to par ½, a market source said.

The bonds saw more than $96 million in reported volume during Tuesday’s session.

The lack of movement of the notes in the aftermarket was attributed to their tight pricing.

While a 6¾% coupon for secured paper may have been attractive pre-coronavirus pandemic, the pricing was tight for a single B credit in the current market environment, sources said.

LifePoint priced a $600 million issue of the 6¾% notes at par in a Monday drive-by.

Pricing came tighter than talk for a yield in the 7% area and initial guidance in the mid-7% area.

The deal was upsized from $500 million and was heard to have played to massive demand with books as much as 5x oversubscribed.

TransDigm gains

TransDigm’s 8% senior secured notes due 2025 saw renewed attention on Tuesday with the notes climbing higher.

The 8% notes rose to a 103-handle on Tuesday and stood poised to close out the day up ¾ point at 103¾, according to a market source.

The 8% notes have outperformed since TransDigm priced the $1.1 billion issue at par on April 2 with the notes jumping 2 points shortly after hitting the aftermarket.

The Cleveland-based commercial and military aerospace components maker is a well-known name in the high-yield space, and the secured notes offered an attractive coupon.

The notes were again on the rise on Tuesday with the entire commercial aerospace sector lifted by positive news indicating the spread of the coronavirus had peaked.

Continental Resources adds to gains

Continental Resources senior notes continued to skyrocket in active trading on Tuesday.

The Oklahoma-based oil and natural gas producer’s 5% senior notes due 2022 jumped 8¾ points to 85 with more than $28 million in reported volume, according to a market source.

The 4½% senior notes due 2023 jumped 11 points to close Tuesday at 78 with more than $27 million on the tape.

The 3.8% senior notes due 2024 jumped 9½ points to 71 with more than $10 million in reported volume.

The 4 3/8% notes due 2028 jumped 7 points to 67.

Continental Resources announced on Tuesday that it was suspending its dividend and cutting production to deal with depressed commodity prices.

The dividend cut was a boon for the bonds because the company was taking steps to preserve and increase its liquidity, a source said.

Continental Resources is the latest fallen angel to enter junkbondland.

The split-rated company achieved fallen angel status when S&P downgraded it to BB+ from BBB- last week.

Like most fallen angels to enter the high-yield space, the bonds have improved since changing to high-yield hands.

The bonds, especially the short-duration bonds, offer an enormous yield from a higher-quality credit that is less likely to default, sources said.

Indexes

Indexes continued to post gains after launching the week on firm footing.

The KDP High Yield Daily index was up 59 bps to close Tuesday at 60.84 with the yield now 8.27%.

The index was up 17 bps on Monday.

The ICE BofAML US High Yield index gained 112.4 bps with year-to-date returns now negative 13.782%.

The index was up 32.9 bps on Monday.

The CDX High Yield 30 index gained 53 bps to close Tuesday at 92.48. The index jumped 283 bps on Monday.

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