Junk brings $2.7 billion; calendar packed; CSC flat; Carriage Services below par; Dana gains

By Abigail W. Adams

Portland, Me., April 30 – The domestic high-yield primary market closed out Friday with $2.7 billion pricing over four deals.

May will open to a packed forward calendar with several megadeals on deck, including a $2.96 billion three-part acquisition financing deal from Allied Universal.

Meanwhile, the secondary space closed Friday weaker after firming the previous session. However, the cash bond market was largely unchanged on the week.

New paper continued to dominate the tape although with mixed performances.

Altice USA subsidiary CSC Holdings LLC’s newly priced tranches fell flat in active trading on Friday although the unsecured tranche slightly outperformed the secured tranche.

Carriage Services, Inc.’s 4¼% notes due 2029 (B2/B+) traded off alongside the broader market with the notes falling below par.

However, Dana Inc.’s 4¼% senior green bonds due 2030 (B2/BB/BB+) gained strength on Friday despite weak market conditions and closed the day on a 101-handle.

Friday’s primary

The final session of April saw a solid $2.17 billion of dollar-denominated issuance, including an upsized drive-by deal from MSCI Inc., a $600 million issue (from $500 million) of 3 5/8% 10.5-year senior notes (Ba1/BB+/BBB-) that priced at par, 12.5 basis points inside of yield talk.

The first week in May will get underway to one of the largest forward calendars to cross a weekend in months, if not years.

At Friday's close the calendar contained $7.2 billion of announced business, along with deals expected to be announced.

There is a trio of announced deals which top the $1 billion mark.

Most prominent among them is the Allied Universal $2.96 billion three-part acquisition financing coming in two secured tranches, both in the market with guidance in the high 4% to 5% area, and one unsecured tranche guided in the mid-to-high 6% area (see related stories in this issue).

CSC Holdings’ two tranches

CSC Holdings’ newly priced tranches fell flat in active trading on Friday although the unsecured higher-yielding tranche slightly outperformed its secured counterpart.

The 4½% senior guaranteed notes due 2031 (Ba3/BB) were trading in a tight range of par to par 1/8 heading into the market close, a source said.

There was more than $65 million in reported volume.

The 5% senior notes due 2031 (B3/B+) were nominally better with the notes trading in a tight range of par 1/8 to par 3/8, a source said.

There was about $38 million in reported volume.

CSC Holdings, an Altice USA subsidiary, priced a $1.5 billion tranche of the 4½% notes and a $500 million tranche of the 5% notes at par in a Thursday drive-by.

The 4½% notes priced in the middle of talk for a yield in the 4½% area; the 5% notes priced in the middle of yield talk in the 5% area.

Carriage Services below par

Carriage Services’ 4¼% notes due 2029 dropped below par in active trading on Friday.

After closing the previous session on a par-handle, the notes were changing hands in the 99½ to 99 7/8 context heading into the market close.

The poor performance of the notes was in keeping with several lower-coupon, longer-duration bonds that have been under pressure amid rising 10-year Treasury yields.

The notes were also trading off due to the general weakness in the market, a source said.

While lower on Friday, volume in the name was relatively light with $14 million on the tape heading into the market close.

Carriage Services priced a $400 million issue of the 4¼% notes at par on Thursday.

The yield printed at the tight end of the 4¼% to 4½% yield talk.

Dana gains momentum

While the overall market was weak and several lower-coupon, longer-duration bonds have struggled in the aftermarket, Dana’s 4¼% senior green bonds due 2030 were an outlier with the notes gaining steam during Friday’s session.

The 4¼% notes closed the previous session on a par-handle and opened Friday at par ½.

The 4¼% notes climbed to a 101-handle as the session progressed and were changing hands in the 101 1/8 to 101½ context heading into the market close, a source said.

In a heavily oversubscribed offering, Dana priced a $400 million issue of the 4¼% notes on Thursday.

The yield printed at the tight end of the 4¼% to 4½% yield talk.

The deal was heard to have played to $1.5 billion of demand.

Indexes mixed

Indexes were again mixed on Friday.

The KDP High Yield Daily index added 1 point to close the day at 69.62 with the yield now 3.87%.

The index was unchanged on Thursday and Wednesday after adding 6 points on Tuesday and 1 point on Monday.

The index posted a cumulative gain of 8 points on the week.

The CDX High Yield 30 index dropped 12 bps to close Friday at 109.87.

The index gained 18 bps on Thursday and 16 bps on Wednesday, shaved off 3 bps on Tuesday and inched up 3 bps on Monday.

The index posted a cumulative gain of 22 bps on the week.

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