Seagate, WernerCo join junk calendar; Solenis upsizes, sets talk; Amerigas weakens

By Abigail W. Adams

Portland, Me., May 23 – The domestic high-yield primary market saw no deals price during Tuesday’s session.

However, dealers promised a backloaded week with two more deals joining the forward calendar.

Seagate HDD Cayman began marketing a $1 billion two-tranche offering of long six-year and eight-year senior notes (existing Ba3/BB/BB+) with pricing expected before the week draws to a close.

In a unique transaction, WernerCo subsidiaries Werner FinCo LP and Werner FinCo, Inc. announced a $400 million offering of five-year senior secured first-lien notes (Caa1/B-) alongside an exchange offer and consent solicitations.

The deals joined a packed calendar with six dollar-tranches totaling about $5.03 billion in the market.

While no deals priced on Tuesday, Wednesday promises to be active with Olympus Water US Holding Corp.’s (Solenis) upsized $2.375 billion equivalent two-tranche offering of long five-year senior secured notes (B3/B-) to back the acquisition of Diversey Holdings Ltd. on deck.

Meanwhile, a flat open gave way to selling pressure on Tuesday with the cash bond market closing the day down 1/8 point as the market reacted to the impasse in debt ceiling negotiations.

AmeriGas Partners LP and AmeriGas Finance Corp.’s 9 3/8% senior notes due 2028 (B1//BB-) were weaker in active trade with the notes closing the day on a 99-handle.

Outside of recent issues, Altice France SA’s and Altice Luxembourg SA’s senior notes were under pressure after Altice UK announced it had upped its stake in the British telecommunications company BT Group plc.

Seagate in the market

While no deals priced on Tuesday, the forward calendar continued to grow.

Seagate started marketing a $1 billion two tranche-offering of long six-year and eight-year senior notes with pricing expected before the week draws to a close.

Early guidance has the long six-year notes coming with a yield in the 8½% area and the eight-year notes coming with a yield in the 8¾% area.

WernerCo’s offering

In a unique offering, WernerCo plans to sell $400 million of five-year senior secured first-lien notes (Caa1/B-) alongside a distressed debt exchange.

Early guidance has the five-year notes coming with a yield of 11¾% to 12%.

The company concurrently launched an exchange for any and all outstanding 8¾% senior notes due 2025 for new junior-lien senior secured notes due 2028.

The structure was unique, sources said.

“This is not a normal transaction,” a source said.

However, the deal was expected to mostly play to holders of the 2025 notes that participate in the exchange.

Solenis on deck

Solenis set price talk for its upsized $2.375 billion equivalent two-tranche offering of long five-year senior secured notes (B3/B-) to back the acquisition of Diversey Holdings Ltd. with books scheduled to close at 9:30 a.m. ET on Wednesday.

The dollar-denominated tranche was upsized to $1.825 billion from $1.625 billion, with price talk in the 9¾% area.

The euro-denominated tranche was upsized to $550 million equivalent from $500 million equivalent, with price talk also in the 9¾% area.

Early guidance for both tranches was for a yield in the high 8% area.

The concurrent term loan was downsized to $500 million from $750 million.

Official talk came well wide of early guidance, a reflection of risk appetite in the market, a source said.

However, books for the dollar-denominated tranche were heard to be about 1.4x oversubscribed.

AmeriGas weakens

AmeriGas’ new 9 3/8% senior notes due 2028 continued to lag in the aftermarket with the notes moving lower after a weak break.

The 9 3/8% notes were marked at 99 5/8 to par 1/8 early in the session, roughly flat to their closing level on Monday, a source said.

However, they continued to weaken as selling pressure set in to the market.

The notes were changing hands in the 99½ to 99¾ context.

There was $33 million reported volume.

AmeriGas priced $500 million of the 9 3/8% notes at par in a Monday drive-by.

Pricing came at the wide end of talk for a yield in the 9¼% area. Early guidance was for a yield in the low 9% area.

Altice under pressure

Altice’s senior notes were under pressure on Tuesday with the notes falling 1½ to 4 points as investors responded to Altice UK increasing its investment in the BT Group.

Altice Luxembourg’s 10½% senior notes due 2027 (Caa1/CCC) fell 2½ points to close the day at 65½, according to a market source.

The yield rose to 24½%.

Altice France’s 6% senior notes due 2028 sank 4 points to 52 with the yield rising to 23¼%.

The 5 1/8% senior secured notes due 2029 (B2/B-) fell 2¼ point to 70½ with the yield 12%.

The 5½% senior secured notes due 2029 (B2/B-) fell 2 points to 71 with the yield also about 12%.

Altice’s eurobonds were also under pressure following the headlines, a source said.

News broke on Tuesday that Altice UK had increased its stake to 24.5% from 18% in the British telecom behemoth BT Group.

However, the company announced that it had no intention to make a bid for BT.

Indexes

The KDP High Yield Daily index fell 7 points to close Tuesday at 50.28 with the yield 7.45%.

The index gained 4 points on Monday.

The ICE BofAML US High Yield index fell 12 basis points with the year-to-date return now 3.908%.

The index gained 23.9 bps on Monday.

The CDX High Yield 30 index fell 28 bps to close Tuesday at 100.48.

The index gained 49 bps on Monday.

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