Altice USA gains; Altice Luxembourg weakens; Chemours trades down; energy under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 2 – The domestic high-yield primary market was closed on Tuesday and is expected to remain that way until the July 8 week with many taking the days surrounding the July 4 holiday off.

Meanwhile, the secondary space was largely unchanged as volume began to taper in the run up to the July 4 holiday.

New paper from CSC Holdings, LLC, a subsidiary of Altice USA, Inc., was in focus with the 5¾% due 2030 (B3/B) continuing to post gains after a strong start out of the gate.

While volume was light, Altice USA’s 5¼% senior notes due 2024 were also on the rise on the heels of the new offering.

However, Altice Luxembourg SA’s 10½% notes due 2027 were trading off on Tuesday.

Chemours Co.’s 5 3/8% senior notes due 2027 traded off more than 2 points after a lawsuit filed against former parent company DuPont was unsealed.

Energy names were also under pressure on Tuesday as crude oil futures fell more than 4% after rallying Monday in the wake of OPEC’s decision to extend cuts.

Quiet primary

Markets thinned, liquidity diminished, and the new issue bourse took the day off on Tuesday.

Numerous market participants are taking vacation days surrounding the upcoming Independence Day holiday in the United States, according to an investor.

The primary market is apt to remain shuttered into the early-to-mid part of the July 8 week, a New York-based trader said.

One deal, a holdover from mid-June, is believed to remain in the market, sources say.

Although it has been radio silence for over a week, Canada's Alpha Auto Group is a work in progress, according to an investor who believes that the Toronto-based automotive group is still intent on raising cash by selling high-yield bonds.

The company roadshowed $225 million of five-year notes during the June 17 week. Initial talk had the offering coming at 8% to 8¼%.

Late in the June 24 week, a trader reported hearing word of a revived Alpha Auto deal at 11%.

Altice USA gains

New paper from Altice USA subsidiary CSC Holdings was in focus on Tuesday with the notes continuing to post gains after a strong start out of the gate.

The 5¾% senior notes due 2030 were up another ¼ point to change hands around par ¾, a market source said.

More than $60 million of the bonds were on the tape by the late afternoon, making it the most active issue in the secondary space.

The notes saw a strong start out of the gate and closed out Monday at par ½, sources said.

Altice priced an upsized $1 billion issue of the 5¾% notes at par in a Monday drive-by.

The issue size increased from $750 million.

The yield printed at the tight end of the 5¾% to 5 7/8% yield talk and tighter than initial guidance in the 6% area.

While new paper from Altice USA was in focus, the cable television provider’s older 5¼% senior notes due 2024 were also posting gains.

While volume was light, the 5¼% senior notes traded up 3 points to close Tuesday at 104, according to a market source.

The bonds saw about $5 million in reported volume during Tuesday’s session.

The notes returned to their previous level after dropping more than 3 points on Monday after CSC Holdings announced the new offering.

While paper from Altice USA gained on Tuesday, notes issued by Altice Luxembourg weakened.

Altice Luxembourg’s 10½% senior notes due 2027 (Caa1/B-) were off slightly in active trading.

The notes shaved off about ½ point to close the day at 103½, according to a market source.

More than $14 million of the bonds were on the tape during Tuesday’s session.

Altice Luxembourg priced a $1.6 billion issue of the 10½% notes at par in May.

Chemours down

While volume was light, Chemours’ 5 3/8% senior notes due 2027 traded off more than 2 points as details of the chemical maker’s lawsuit against parent company DuPont became public.

The 5 3/8% notes were down 2 1/8 points to 93 3/8 on Tuesday, according to a market source.

More than $5 million of the bonds were on the tape in the late afternoon.

The notes have steadily traded down since the last week of June when its lawsuit against former parent company DuPont was unsealed.

The lawsuit alleges Chemours liabilities for the clean-up of DuPont products that used the PFOA chemical were overestimated, Claims Journal reported.

Chemours spun-off from DuPont in 2015.

Its lawsuit alleges DuPont misled the company about the amount of liabilities it would be taking on in the spin-off, which it stated could amount to billions of dollars.

Energy under pressure

Energy names were under pressure on Tuesday after the rally in crude oil futures on Monday proved to be short-lived.

Chesapeake Energy Corp.’s 8% senior notes due 2025 dropped 1½ point in active trading, according to a market source.

The notes stood poised to close the day at 90¾ with more than $14 million in reported volume.

While volume was light, California Resources Corp.’s 8% senior notes due 2022 dropped 1 7/8 points to 73½ by Tuesday’s close.

The barrel price of WTI crude oil for August delivery sank to $56.32, a decrease of $2.77 or 4.69%.

While crude oil futures rallied on Monday in the wake of OPEC and Russia’s agreement to extend cuts, the rally was short-lived as concerns over weak demand resurfaced.

Indexes mixed

Indexes were mixed on Tuesday with some posting minor gains and others minor losses after a strong start to the week.

The KDP High Yield Daily index rose 3 bps with the yield now 5.43%. The index gained 8 bps on Monday.

The ICE BofAML US High Yield index shaved off 3.9 bps with the year-to-date return now 10.314%.

The index rose 23.5 bps on Monday.

The index popped back above 10% returns on June 28 after sinking below it on June 26.

The index initially shot past 10% returns on June 20.

The CDX High Yield 30 index gained 7 bps to close Tuesday at 107.76. The index was up 10 bps on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.