Several euro deals planned; Claire’s files bankruptcy; Frontier, Teva new issues continue slide

By James McCandless and Paul A. Harris

San Antonio, March 19 – The high-yield secondary market started the week active, as traders confirmed that the focus was on newer issues.

Meanwhile, the primary market saw no new deals get priced, although several issuers were planning euro-denominated new issues.

Among them, Chicago-based LKQ Corp. started a roadshow for a €1 billion offering of senior notes, TeamSystem Holding SpA is expected to price €750 million of senior secured floating-rate notes on Thursday and Travel and tourism company TUI AG is in the market with €400 million of seven-year notes.

Back in the secondary, Claire’s Stores, Inc. notes became active amid reports that it has filed for bankruptcy and reached a restructuring deal with its creditors.

Newer issues from Frontier Communications Corp. continued to be pushed below par.

A newer issue from Husky Injection Molding Systems Ltd. was also active

After investment firm BlackRock increased its ownership position, issues in WellCare Health Plans, Inc. became some of the most active of the session.

Intelsat SA and Sprint Corp. issues continued to take up volume.

LKQ roadshows €1 billion

The European high-yield market generated all of Monday's primary market news.

Chicago-based LKQ Corp. started a roadshow on Monday for a €1 billion two-part offering of senior notes.

The deal is coming in tranches of eight-year notes and 10-year notes. Tranche sizes remain to be determined.

The roadshow is set to wrap up on Wednesday.

HSBC and BofA Merrill Lynch are managing the sale.

Proceeds will be used to help finance the pending acquisition of Germany-based Stahlgruber GmbH, a wholesale distributor of aftermarket spare parts for passenger cars, tools, capital equipment and accessories, and for general corporate purposes.

TeamSystem two-part FRN

Italy-based TeamSystem Holding SpA is expected to price €750 million of senior secured floating-rate notes on Thursday.

The debt refinancing deal is coming in tranches of notes set to mature in 2023 and 2025.

Goldman Sachs is leading the offer.

TUI €400 million seven-year notes

Travel and tourism company TUI AG is in the market with €400 million of seven-year notes.

The deal is expected to price in the early part of the March 19 week.

Barclays, Commerzbank, HSBC and Credit Agricole CIB are managing the sale.

The Hannover, Germany-based issuer plans to use the proceeds for general corporate purposes.

Corestate Capital five-year bullet

Corestate Capital Holding SA is roadhsowing €300 million of non-callable five-year notes through Wednesday.

Credit Suisse and Morgan Stanley are the bookrunners.

The Luxembourg-based real estate investment company plans to use the proceeds to repay debt.

Claire’s bankrupt

Hoffman Estates, Ill.-based retailer Claire’s saw high activity after reports confirmed Monday that the company had reached a restructuring support agreement with its creditors as part of a bankruptcy filing.

The 9% notes due 2026 took a sharp 9 point drop as traders saw them fluctuate between 54 and 53 to close the day.

Frontier drops

Traders have taken to calling Norwalk, Conn.-based wireline telecom name Frontier Communications’ new issues the “whipping boy” of the high-yield secondary as those issues continue to trend lower.

“Those traded down again,” a trader said.

The $1.6 billion issue of eight-year second-lien secured notes, with an 8½% yield, was seen dropping as low as 96 3/8 bid after opening at 97.

Husky trades

Bolton, Ont.-based injection molding equipment supplier Husky saw its recent $650 million issue of eight-year senior notes trade heavily Monday, traders confirmed.

The 7¾% notes due 2026 were seen trading as high as 100¾ bid.

The notes had priced at par on Friday.

WellCare active

Paper in Tampa, Fla.-based health insurance provider WellCare became active after recent filings confirmed that investment firm BlackRock had increased its ownership share in the name by 0.6%, bringing its total ownership share to 9.6%.

The 5¼% paper due 2025 gained about ¼ point to close at 100½ bid.

Volume names active

Luxembourg-based satellite communications company Intelsat added to the day’s volume in the telecom space.

The Intelsat Jackson Holdings SA 5½% issues due 2023 dropped about ¾ point to close at just above 80¾ bid. The 7¼% notes due 2020 fell about 2¾ points to close around 92¼ bid.

Britain-based drug maker Mallinckrodt was active in distressed healthcare.

The 4¾% paper due 2023 fell about 2¾ points to close around 79¼ bid.

Overland Park, Kan.-based wireless company Sprint’s recent $1 billion continues to dominate in the secondary.

The 7 5/8% notes due 2026 fell about ½ point to close just below 99 bid.

Indexes lose

The KDP High Yield Daily index lost 13 basis points to end at 70.32. The yield gained 4 bps to end at 5.87%

The Merrill Lynch High Yield index lost 13.7 basis points to close at a return of negative 0.784% for the year so far.

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