Telesat, Calumet, Shutterfly price; AMN, Sabra new notes better; WeWork falls; PG&E, Sprint vary

By James McCandless and Paul A. Harris

San Antonio, Sept. 27 – Three issuers brought $1.89 billion of new notes to the high-yield primary market on Friday, while new tranches and newsmakers capped off the week in secondary activity.

Telesat Canada priced a $550 million issue of eight-year senior notes (B3/B) at par to yield 6½%.

Calumet Specialty Products Partners, LP priced a $550 million issue of 5.5-year senior notes (Caa1/B-/B-) at par to yield 11%.

And Shutterfly Inc. priced an upsized $785 million issue of 8½% seven-year senior secured notes (B1/B) at 95.00, a bond trader said.

In the secondary, new notes from AMN Healthcare, Inc. and Sabra Health Care REIT, Inc. both ended in better positions.

Meanwhile, WeWork Cos. Inc.’s issues continued to fall in the aftermath of the week’s negative headlines.

PG&E Corp.’s paper varied after a group of creditors said that it was willing to increase its investment bid that would result in control of the company.

Telecom giant Sprint Corp.’s notes also saw different movements.

Telesat prices tight

There was action in the high-yield primary market on Friday, sources said.

Telesat Canada priced a $550 million issue of eight-year senior notes (B3/B) at par to yield 6½%.

The yield printed at the tight end of the 6½% to 6¾% yield talk, and inside of initial guidance in the 7% area.

Calumet Specialty Products Partners, LP priced a $550 million issue of 5.5-year senior notes (Caa1/B-/B-) at par to yield 11%.

The yield printed on top of final yield talk. Initial guidance was in the high 10% to 11% area.

Away from an anchor order dealers were able to build something of a book, a trader remarked, adding that the anchor order used its leverage to push pricing considerably.

And Shutterfly Inc. priced an upsized $785 million issue of 8½% seven-year senior secured notes (B1/B) at 95.00, a bond trader said.

Very few terms circulated the market, and initially the Shutterfly 8½% secured notes were not trading, the source remarked.

The issue was upsized from $500 million with proceeds shifted from the concurrent term loan.

The coupon and price came on top of final talk. Earlier talk specified an 8½% coupon at 95 to 96. That talk, itself, was revised from the earlier 8¼% to 8½% yield talk.

Initial guidance had the deal coming to yield in the low-to-mid 7% area, a trader said.

The deal also underwent covenant changes.

The primary market is expected to be active during the week ahead, according to a syndicate official who added that, while the Monday-Tuesday Rosh Hashanah holidays might slow activity in the secondary market somewhat, the primary market is apt to remain active.

Mixed Thursday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Thursday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $67 million of inflows on the day.

Actively managed high-yield funds were flat to slightly negative on Thursday, sustaining $15 million of outflows on the day, the source said.

News of Thursday's daily flows follows a Thursday afternoon report that the combined funds sustained $258 million of net outflows in the week to the Wednesday, Sept. 26 close, according to Lipper US Fund Flows.

That represented a significant reversal in the retail cash tides of the high-yield asset class, according to a market source who said that over the course of the previous two weekly reporting periods the funds saw a combined total of $5.2 billion of net inflows.

New notes better

New Thursday issuance was free to trade, moving higher throughout the day, traders said.

San Diego-based health care staffing services provider AMN’s new 4 5/8% senior notes due 2027 headed up to 101 bid.

The notes saw about $20 million changing hands.

The $300 million issue priced in a quick-to-market Thursday trade at par.

Also, Irvine, Calif., healthcare real estate investment trust Sabra’s new 3.9% senior notes due 2029 inched up ¼ point to close at 98¾ bid.

The $350 million deal was priced at 98.49 on Thursday via subsidiaries Sabra Health Care LP and Sabra Capital Corp.

WeWork falls

Meanwhile, WeWork’s paper continued a precipitous fall, market sources said.

The 7 7/8% senior notes due 2025 shed 3¾ points to close at 87¼ bid.

About $22 million traded at the end of the week.

The paper had started the week in the high 90s context.

The New York City-based co-working name was under pressure this week amid a series of negative headlines, resulting in a shelved initial public offering and the resignation of its chief executive officer.

After backers of the company said that it was worth $47 billion, the market balked last week, and the valuation was revised and significantly reduced

In the aftermath, the board and major investors sought the resignation of chief executive officer Adam Neumann, which was given on Tuesday.

PG&E varies

PG&E’s notes saw varying activity at the Friday close, traders said.

The 5.8% senior notes due 2037 shaved off ¼ point to close at 112¾ bid. The 6.05% notes due 2034 rose ½ point to close at 113¾ bid.

The two tranches combined to see about $35 million on the tape.

On Wednesday, a group of the San Francisco-based bankrupt electric utility’s bondholders filed a plan in bankruptcy court that states their preparedness to invest $29.2 billion in the name.

The plan would give the creditors new debt and a controlling equity stake.

It would also set up two trusts, one for $14.5 billion to pay individual wildfire victims and one for $11 billion to pay insurance claims.

“At this point, it is attractive,” a trader said. “The judge could decide to let this plan go forward if it provides the best remedy for all parties.”

The company is arguing to remain the sole entity with the right to propose and enact a restructuring plan, a matter that will be decided in a hearing next month.

In another court filing on Wednesday, PG&E asked the court to extend that right to Nov. 29.

Sprint differs

Telecom name Sprint’s issues also saw different movements, market sources said.

The 7 7/8% senior notes due 2023 held level at 110 bid. The 7 5/8% senior notes due 2026 lost ¼ point to close at 110¼ bid.

The two issues saw about $36 million in trading.

The Overland Park, Kan.-based mobile phone network provider saw negativity this week after the Federal Communications Commission announced that it was investigating the company over alleged misuse of government subsidies.

The news prompted worries over how it would impact its merger with T-Mobile as FEC commissioners have yet to approve the deal.

Indexes dip

Three high-yield indexes took a dip to end the week.

The KDP High Yield Daily index dropped 10 bps on Friday, wrapping up the week at 71.55 with the yield rising to 5.41%.

The index shaved off 1 basis point on Thursday, lost 14 bps on Wednesday and went unchanged on Tuesday.

In the aggregate, the index shed 24 bps this week.

The ICE BofAML US High Yield index declined by 8.9 bps on Friday with the year-to-date return now at 11.528%.

The index dipped 4.2 bps on Thursday, slid 21.3 bps on Wednesday and fell 1.2 bps on Tuesday.

The CDX High Yield 30 index shifted lower by 35.59 bps to 106.4313.

The index lost 32.78 bps on Thursday, improved by 32.58 bps on Wednesday and declined by 32.86 bps on Tuesday.

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