Live Nation, Aker price new deals; new Guitar Center active; funds gain $11 million

By James McCandless and Paul A. Harris

San Antonio, March 15 – Two new dollar-denominated high-yield offerings totaling $800 million priced on Thursday and a series of announcements set the stage for a busy session on Friday.

Live Nation Entertainment, Inc. priced a $300 million issue of eight-year senior notes (B1/B+) in a quick-to-market trade while Norway’s Aker BP ASA brought $500 million of seven-year senior notes.

In the high-yield second market, recent issues dominated trading on Thursday, market sources confirmed.

Tuesday’s issue from Guitar Center, Inc. of $635 million of 9½% 3.5-year senior secured notes was the most active in the secondary.

Valeant Pharmaceuticals International, Inc saw its recent eight-year senior notes trade actively.

And the recent $1 billion pricing from Sprint Corp. continues to be a dominant name in secondary business.

Frontier Communications Corp. and Intelsat SA saw more heavy volume.

Flows flat but positive

Meanwhile the dedicated high yield funds snapped a string of eight consecutive cash outflows going back nearly to the start of 2018, but just barely.

Flows were essentially flat but nonetheless positive: $11 million of net inflows in the week to Wednesday’s close, according to Lipper US Fund Flows.

The small weekly inflow, which was reported on Thursday afternoon, follows the previous week’s $525 million of net outflows, which was the eighth consecutive negative weekly flow, according to a Prospect News analysis of the data.

Live Nation drives by

During a Thursday session that generated a steady stream of primary market news, Live Nation priced a $300 million issue of eight-year senior notes (B1/B+) at par to yield 5 5/8% in a quick-to-market trade.

The yield came at the tight end of the 5 5/8% to 5¾% yield talk and tighter than initial guidance that was set in the 5¾% area, a trader said.

JP Morgan managed the sale.

The Los Angeles-based events promoter and venue operator plans to use the proceeds, along with proceeds from a $500 million offering of convertible securities, to repurchase its 2½% convertible senior notes due 2019 and for general corporate purposes.

Aker BP dollar deal

Norway’s Aker BP priced a $500 million issue of seven-year senior notes (Ba2/BB+) at par to yield 5 7/8%.

The yield printed at the tight end of yield talk that was announced in the 6% area.

Deutsche Bank managed the sale.

The Fornebu, Norway-based oil exploration and development company plans to use the proceeds to partially repay, without cancelling, drawn commitments under its reserves-based lending facility.

Titan/Husky talk 7½% to 7¾%

Looking ahead to what is expected to be a busy Friday session, Husky Injection Molding Systems Ltd. talked its $750 million offering of eight-year senior notes (Caa2/CCC+) to yield 7½% to 7¾%.

Official talk comes wide to initial guidance of 7¼% to 7½%, a trader said.

Covenant tightening appears to be in the offing, according to the trader, who added that orders were coming in at the mid-7% area.

Books close at 11 a.m. ET on Friday and the deal, which will help fund the leveraged buyout of the company by Platinum Equity from Berkshire Partners and Omers Private Equity, is expected to price on Friday.

BofA Merrill Lynch is leading.

Tullow Oil talk 7% to 7¼%

In a deal playing to both high yield and emerging markets accounts, Tullow Oil plc talked a $650 million offering of seven-year senior notes (expected B3/confirmed B) to yield 7% to 7¼%.

Initial price talk was in the low 7% area.

Books close at 10 a.m. ET Friday and the offer is set to price subsequently.

Active bookrunner JP Morgan will bill and deliver. Credit Agricole is also an active global coordinator. BNP Paribas and Lloyds are passive global coordinators.

The London-based, Africa-focused oil and gas exploration company plans to use the proceeds, plus cash on hand, to pay off its senior notes due 2020.

Iridium talk 10¼% to 10½%

Iridium Communications Inc. talked its $360 million offering of five-year senior notes (Caa1/CCC) to yield 10¼% to 10½%.

Official talk comes on top of earlier guidance, a trader said.

The deal, being managed by Deutsche Bank Securities Inc., is expected to price on Friday.

CNX pushed back

CNX Resources Corp. talked a $500 million offering of eight-year senior notes (confirmed B3/expected B-) to yield in the 6½% area.

Official talk came at the wide end of initial guidance in the low to mid 6% area.

Books were scheduled to close at 3:30 p.m. ET Thursday and the deal was expected to price thereafter.

However the deal was pushed off at least until Friday, according to traders, one of whom said that the company was unhappy with pricing.

Credit Suisse is the lead left bookrunner.

The Canonsburg, Penn.-based independent oil and natural gas company plans to use the proceeds to repay its outstanding 8% senior notes due 2023.

Elsewhere Brookfield Residential Properties Inc. was expected to price a $600 million offering of eight-year senior notes (B1/B+) in a quick-to-market trade on Thursday following a late-morning conference call with investors.

However no terms were available at press time, sources said

Initial price talk had the deal coming with a yield in the 6½% area, a trader said, adding that no official talk had been circulated in the market.

JP Morgan is leading the debt refinancing deal.

Paprec prices €800 million

In the European session, Paprec Holding priced €800 million of seven-year senior secured notes (B1/B+) in two tranches.

The deal included €575 million of fixed-rate notes that priced at par to yield 4%. The yield printed on top of price talk and at the tight end of the 4% to 4¼% yield talk.

In addition, Paprec priced €225 million of three-month Euribor plus 350 basis points floating-rate notes at par with a 0% Euribor floor. The price printed on top of price talk. The spread came at the tight end of spread talk in the 375 bps area.

Joint physical bookrunner Credit Suisse will bill and deliver. BNP Paribas and Credit Agricole CIB were also joint physical bookrunners.

The Paris-based recycling and waste management company plans to use the proceeds to redeem all €520 million of its 5¼% senior secured notes due 2022 and €185 million of its 7 3/8% senior subordinated notes due 2023, as well as to pay off its revolving credit facility and for general corporate purposes.

Elsewhere Norway-based debt collector Axactor AB priced a €150 million issue of Euribor plus 700 basis points three-year senior floating-rate notes.

The spread came on top of spread talk heard earlier in the week, a London-based sellside source said.

DNB Markets and Nordea were the joint lead managers and joint bookrunners.

Guitar Center trades

After Westlake Village, Calif.-based music retailer Guitar Center priced a $635 million issue of 9½% 3.5-year senior secured notes on Wednesday, market sources confirmed that the notes dominated Thursday secondary trading.

“It didn’t seem likely, but these were some of the most active new issues on the day,” a trader said.

The notes, at a 10 1/8% yield, ended up trading to above 98¾ bid from their 98.14 issue price.

Valeant continues activity

Canada-based pharmaceutical name Valeant’s $1.5 billion issue of eight-year senior notes from Monday has remained heavily favored throughout the week.

The 9¼% notes due 2026 traded up to 100¾ bid. The upsize offering had priced at par.

Sprint bounces

Continuing to trade heavily and but now heading upwards, traders confirmed, seeing Overland Park, Kan.-based wireless company Sprint’s recent $1.5 billion new issue headed upwards Thursday.

The 7 5/8% notes due 2026 gained more than ½ point to close above 99½ bid.

Sprint priced the upsized offering at par on Feb. 20 and it has been busy ever since.

Volume favorites trade

Telecom names took up much of the rest of Thursday’s volume.

Norwalk, Conn.-based wireline telecom name Frontier Communications has been bolstered by the recent pricing of a new issue and its decision to end its quarterly dividend in favor of focusing on debt repayment.

In trading Thursday, the 7 5/8% notes due 2024 lost about ¾ point to close at just above 60 bid. The 10½% notes due 2022 shaved off ½ point to close at 87 bid. The 11% notes due 2025 rose slightly to close just above 81½ bid.

Luxembourg-based satellite communications company Intelsat also traded.

The Intelsat Jackson Holdings SA 5½% notes due 2023 trended down ¼ point to close at 81¾ bid. The 7¼% notes due 2020 also fell ¼ point to close at 93¾ bid.

Indexes hold firm

The KDP High Yield Daily Index remained level Thursday, holding at 70.43 with a yield of 5.83%.

Meanwhile the Merrill Lynch High Yield Index shed 10.8 bps to end with a year-to-date return of negative 0.672%, down from its negative 0.580% return at Wednesday’s close.

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