Radiology Partners, Station Casinos price; Lamar mixed; Altice, Navient wane; CHS higher

By Abigail W. Adams

Portland, Me., Jan. 24 – The high-yield primary market rounded out an action-packed week with two deals pricing, bringing the total new dollar-denominated deal volume for the week to $13.57 billion.

Radiology Partners, Inc. priced an upsized $710 million issue of eight-year senior notes (Caa2/CCC+) and Station Casinos LLC priced an upsized $750 million issue of eight-year senior notes (B3/B-).

Issuers are racing to take advantage of attractive market conditions that have enabled several deals to come with 3-handles.

However, credit markets were beginning to bleed on Friday, which caused some sources to question how long those conditions will last.

Meanwhile, the secondary space was heavy on Friday with the market, in general, down ¼ point, a market source said.

Several of the deals to price during Thursday’s session lost their premiums and were trading either at or below their issue price on Friday.

Altice’s new 6% senior notes due 2028 (Caa1/CCC+) issued by Ypso Finance BIS SA gave up their gains on Friday and were seen lagging their issue price.

Lamar Advertising Co.’s two tranches of senior notes (Ba2/BB) were mixed with the longer-duration tranche trading at a premium and the shorter-duration tranche cuffed around par.

Navient Corp.’s 5% senior notes due 2027 (Ba3/B+/BB) and Garda World Security Corp.’s 4 5/8% senior notes due 2027 were also largely stuck at par.

However, CHS/Community Health Systems Inc.’s 6 5/8% senior notes due 2025 were changing hands at a healthy premium in secondary market activity.

Several recent issues from the energy sector continued to struggle including Baytex Energy Corp.’s 8¾% senior notes due 2027 sinking further below their issue price on Friday.

Station Casinos upsizes

Station Casinos priced an upsized $750 million issue of eight-year senior notes at par to yield 4½% on Friday, according to a syndicate source.

The issue size increased from $500 million.

The yield printed at the tight end of the 4½% to 4 5/8% yield talk.

Radiology Partners in demand

Radiology Partners priced an upsized $710 million issue of eight-year senior notes at par to yield 9¼% on Friday, according to a market source.

The issue size increased from $610 million.

The yield printed at the tight end of the 9¼% to 9½% yield talk.

The 9¼% notes were in demand in the aftermarket with the notes shooting up out of the gate.

The notes were changing hands in the 101¾ to 102 context soon after breaking for trade, a market source said.

Altice weakens

The sole dollar-denominated tranche to price in Altice’s megadeal on Thursday gave up their gains and were lagging their issue price on Friday.

Altice’s new 6% senior notes due 2028 were seen changing hands just south of par Friday afternoon.

The notes were changing hands around 99 7/8 with more than $80 million in reported volume on the tape, a market source said.

There was a lot of electronic trading in the name, the source said.

The notes were coming in after a strong break that saw them trade up to par ½.

Altice priced a $1,225,000,000 tranche of the 6% notes at par on Thursday. Pricing came on the low side of price talk in the 6¼% area.

The dollar-denominated tranche priced as part of a €2.9 billion equivalent three-tranche offering that also included a €500 million tranche of 2 1/8% five-year senior secured notes (B2/B) issued by Altice France SA.

The 2 1/8% notes priced at 99.408 to yield 2¼%.

The deal also included a €500 million tranche of eight-year senior notes, also issued by Ypso Finance BIS SA, which priced at par to yield 4%.

Navient weakens

Navient’s 5% senior notes due 2027 were also weaker on Friday after a strong break.

The 5% senior notes were still changing hands at a premium early in the session. However, they came in toward the end of the day.

The notes traded as high as par ¼ on Friday. However, they were changing hands at 99 7/8 heading into the market close.

The notes traded up to par 7/8 after breaking for trade on Thursday.

Navient priced a $700 million issue of the 5% notes in a Thursday drive-by.

The notes priced at the tight end of the 5% to 5 1/8% yield talk.

Lamar mixed

Lamar Advertising’s two tranches of senior notes were mixed in high-volume activity on Friday.

The outdoor advertising company’s 4% senior notes due 2030 traded up to par ½ with more than $70 million in reported volume, according to a market source.

However, the 3¾% notes due 2028 were largely wrapped around par with more than $60 million in reported volume.

Lamar priced $1 billion in two tranches on Friday.

The deal consisted of a $600 million tranche of the 3¾% notes and a $400 million tranche of the 4% notes, both of which priced at par, a market source said.

Garda flat

Garda World Security’s 4 5/8% senior notes due 2027 were stuck at their issue price in active trading on Friday.

The notes were cuffed around par with more than $55 million on the tape in the late afternoon.

Garda priced an upsized $450 million issue of the 4 5/8% notes at par in a Thursday drive-by.

The issue size increased from $400 million.

CHS at a premium

CHS/Community Health Systems’ 6 5/8% senior notes due 2025 maintained a healthy premium in the secondary space despite a heavy day for the markets.

The 6 5/8% notes were changing hands around par ¾ in heavy volume activity.

The bonds saw more than $159 million in reported volume by the late afternoon.

CHS priced an upsized $1,462,000,000 of the 6 5/8% notes at par in a Thursday drive-by.

The issue size increased from $1.02 billion.

The yield printed at the tight end of yield talk in the 6¾% area.

Baytex down again

Baytex Energy’s 8¾% senior notes due 2027 sunk further below their issue price in high-volume activity on Friday.

The notes dropped another 1¼ point to 98¼ with more than $20 million in reported volume by the late afternoon.

The notes have struggled since hitting the secondary space and closed out Thursday around 99½.

Baytex priced a $500 million issue of the 8¾% notes at par on Wednesday.

The notes broke for trade as crude oil futures continued to trend lower on fear of a supply glut.

Indexes down

Indexes closed the week with losses.

The KDP High Yield Daily index shaved off 4 points to close Friday at 71.63 with the yield now 4.97%.

The index was down 13 bps on Thursday, 8 bps on Wednesday and 4 bps on Tuesday for a cumulative loss of 29 bps on the week.

The ICE BofAML US High Yield index sank 15.4 bps with the year-to-date return now 0.333%. The index dropped 21.2 bps on Thursday, 3.4 bps on Wednesday and 2.6 bps on Tuesday for a cumulative weekly decline of 42.6 bps.

The Jan. 21 week marks the index’s first weekly decline in 2020.

The CDX High Yield 30 index dropped 26 bps to close Friday at 108.84.

The index dropped 24 bps on Thursday, was flat on Wednesday and was down 28 bps on Tuesday for a cumulative loss of 78 bps on the week.

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