Iron Mountain drives by, Post Holdings prices; II-VI gains; W.R. Grace, At Home Group active

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 13 – Monday's session in the new-issue market saw two issuers price $1.25 billion face amount of junk in two tranches.

Both deals saw significant upsizes.

Iron Mountain Information Management Services, Inc. priced a $750 million issue —upsized from $500 million — of 5% senior notes due July 2032 (Ba3/BB-) at par, in the middle of yield talk in the 5% area.

The deal played to $4 billion of orders, a significant fraction of which came with yield limits set at 5%, prompting the issuer to back away from a contemplated effort to price the notes at the tight end of yield talk, which would have been 4 7/8%, a market source said.

Elsewhere Post Holdings, Inc. priced an upsized $500 million add-on to its 5½% senior notes due Dec. 15, 2029 (B2/B+) at 103.50 to yield 4.819% in a Monday drive-by, according to market sources.

The issue size increased from $350 million.

The issue price came at the rich end of the 103 to 103.5 price talk.

Meanwhile Ancestry.com came with a $250 million add-on to the Arches Buyer Inc. 4¼% first lien notes due June 1, 2028 (B1/B) set to price Tuesday morning.

Talk is 98.51.

The only other deal on the active calendar is the Skillz Inc. $300 million offering of five-year first-lien secured notes (S&P: expected B-) set to price later in the week, as sources continue to anticipate that 2021 high-yield new issue activity has all but run its course.

Meanwhile, it was a quiet day in the secondary space with the market largely unchanged despite the pressure in equities.

Many market players are in wait-and-see mode with the Federal Reserve’s highly anticipated announcement on Wednesday expected to shed light on the future schedule for rate hikes, sources said.

II-VI Inc.’s recently priced 5% senior notes due 2029 (B2//BB) continued to gain in active trading.

W.R. Grace Holdings LLC's 5 5/8% senior secured notes due 2029 (B3/CCC+/B+) were active although little changed in the high-volume activity.

Ambience Merger Sub, Inc.’s (At Home Group Inc.) secured and unsecured notes were also active with both tranches bouncing off their recent lows.

II-VI gains

II-VI’s recently priced 5% senior notes due 2029 continued their upward momentum in active trading on Monday.

The notes gained about 5/8 points to change hands in the 102 5/8 to 102 7/8 context heading into the market close.

There was more than $20 million in reported volume.

In a heavily oversubscribed offering, II-VI priced a $990 million issue of the 5% notes at par on Dec. 8.

The notes have steadily gained in active trading since hitting the secondary space.

W.R. Grace active

W.R. Grace’s 5 5/8% senior secured notes due 2029 (B3/CCC+/B+) were active although with little movement in price on Monday.

The 5 5/8% notes continued to trade on a 101-handle and were changing hands in the 101 to 101½ context heading into the market close.

There was about $17 million in reported volume.

W.R. Grace priced a $1.155 billion issue of the 5 5/8% notes at par in August in connection with Standard Industries acquisition of the company.

The 5 5/8% notes traded as high as 105 in the run-up to the merger.

However, after its completion in late September, the notes have steadily traded down.

The 5 5/8% notes traded to their lowest level of par ½ in late November but have since leveled off around current levels.

At Home below par

At Home’s secured and unsecured notes were active on Monday with both tranches bouncing off their recent lows although they continued to trade below par.

At Home’s 7 1/8% senior notes due 2029 (Caa1/CCC+) were strong early in the session and traded as high as 99 5/8, according to a market source.

However, they faded as the session progressed and were changing hands in the 98 7/8 to 99¼ context heading into the market close.

There was $15 million in reported volume.

The notes have steadily improved since trading down to a 96-handle in early December.

The home décor store’s 4 7/8% senior secured notes (B1/B) were changing hands in the 99¼ to 99¾ context heading into the market close.

There was about $16 million in reported volume.

The 4 7/8% notes traded down to a 98-handle in the last week of November and early December amid general weakness in the market.

Indexes

The KDP High Yield Daily index shaved off 4 points to close Monday at 65.54 with the yield now 4.04%.

The CDX High Yield 30 index closed Monday at 108.5.

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