LifePoint drives-by, 2025 notes jump on tender offer; Veritex joins calendar; Arconic marches higher

By Abigail W. Adams

Portland, Me., July 31 – The domestic high-yield primary market saw some action on Monday with one drive-by deal pricing and another joining the forward calendar.

In a deal that played to heavy demand, LifePoint Health Inc. priced an upsized $800 million offering of seven-year senior secured notes (B2/B).

VT Topco Inc. (Veritext) joined the forward calendar with a $720 million offering of seven-year first-lien senior secured notes (B2/B).

Meanwhile, it was a ho-hum day in the secondary space with the cash bond market either side of unchanged as credit spreads continued to hover near their tightest levels of the year.

Recent issues and end-of-month rebalancing were the drivers of activity during Monday’s session.

As market players awaited LifePoint’s new offering to free for trade, the company’s 6¾% senior secured notes due 2025 jumped with proceeds to be used to fund a tender offer for the notes.

Arsenal AIC Parent LLC’s recently priced 8% senior secured notes due 2030 (Ba3/B+/BB+) backing the buyout of Arconic continued to march higher with the notes rising to a 102-handle.

Brand Industrial Services, Inc.’s 10 3/8% senior notes due 2030 (B3/B-) also improved in heavy volume.

Monday’s primary

It was a solid start to what is expected to be an active week for the high-yield primary market with one drive-by deal pricing and another joining the forward calendar.

In a deal that played to heavy demand, LifePoint Health priced an upsized $800 million offering of seven-year senior secured notes (B2/B) at par to yield 9 7/8% in a Monday drive-by, according to a market source.

Pricing came at the wide end of tightened talk for a yield of 9¾% to 9 7/8%, which was revised from the initial price talk for a yield of 10% to 10¼%. Early guidance was for a yield of 10¼% to 10½%.

The initial size of the offering was $600 million.

Veritex also joined the forward calendar with its $720 million offering of seven-year first-lien senior secured notes (B2/B).

Early guidance has the notes coming with a yield in the high 8% area. Pricing is expected Aug. 3.

LifePoint’s tender

LifePoint’s 6¾% senior secured notes due 2025 jumped in active trade on Monday with proceeds from its latest offering to be used to fund the tender offer that will retire the notes.

The 6 ¾% notes jumped 2½ points to trade up to 101¾, a source said.

The notes traded up to their early tender consideration price.

Proceeds from LifePoint’s latest offering will be used to fund LifePoint’s tender offer for the $600 million outstanding of the 6¾% notes.

LifePoint launched a tender offer for any and all the $600 million outstanding of its 6¾% notes on Monday with an early tender consideration of $1,017.5 per $1,000 in principal.

The early tender deadline is Aug. 11.

Arconic marches higher

Arconic’s recently priced 8% senior secured notes due 2030 continued to march higher in active trade on Monday with the notes rising to a 102-handle.

They were changing hands in the 102 to 102 1/8 context heading into the market close, a source said.

There was $19 million in reported volume.

The 8% notes have put in a strong aftermarket performance since the $700 million issue priced at par on July 27 with the notes rising to a 101-handle on the break.

Brand Industrial improves

Brand Industrial’s 10 3/8% senior notes due 2030 also improved in active trade on Monday.

The notes added ¼ point and were wrapped around 102 at the close, a source said.

There was $18 million in reported volume.

The 10 3/8% notes also saw a successful aftermarket debut with $1.335 billion issue jumping to a 101-handle shortly after pricing at par on July 25.

Fund flows

Fund flows were mixed on Friday, the most recent session the data was available.

High-yield ETFs saw $51 million in outflows will actively managed funds saw $49 million in inflows, according to a market source.

While high-yield funds have pared their losses with a steady influx of money since March, the market has still seen outflows of $9.3 billion year-to-date.

Index

The KDP High Yield Daily index inched up 2 points to close Monday at 50.68 with the yield now 7.33%.

The CDX High Yield 30 index closed Monday at 103.54.

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