Upsized Post issue, AmeriGas, IHS Markit, Vertiv price, new AmeriGas, Change deals busy

By Paul Deckelman and Paul A. Harris

New York, Feb. 6 – The high-yield primary market opened the first full trading week of February on a busy note on Monday, with syndicate sources seeing $3.27 billion of new U.S. dollar-denominated and fully junk rated paper brought to market in five tranches from four domestic or industrialized-country issuers.

That was up from the $1 billion that got done in one tranche during Friday’s session.

Breakfast cereal maker Post Holdings Inc. served up the day’s big deal, a quickly shopped and upsized $1.75 billion two-part offering of eight- and 10-year notes.

Traders later saw both tranches of those notes firmer in the aftermarket and also saw activity in some of the company’s existing paper that is to be refinanced with the new-deal proceeds.

Propane marketer AmeriGas Partners, LP priced $525 million of 10.25-year notes. The traders said that the quick-to-market AmeriGas paper was one of the leaders on the day’s Most Actives List.

There was also a $500 million unscheduled offering of eight-year notes from London-based financial information company IHS Markit Ltd.

And Vertiv Intermediate Holding Corp., a provider of power apparatus and information technology systems to the data center and telecommunications industries, brought a downsized $500 million of five-year PIK toggle notes to market, the day’s sole forward calendar deal. That paper too was later quoted up from its discounted issue price.

Another busy credit was Friday’s downsized $1 billion offering from Change Healthcare Holdings, LLC.

Statistical market performance measures were higher across the board for a fourth consecutive session on Monday, after having turned higher on Wednesday and staying there; before that, they had been lower for one session earlier last week and mixed for three sessions before that. Monday was the indicator’s sixth stronger session in the last 10 trading days.

Post upsizes, prices tight

Four issuers raised $3.27 billion by pricing a combined five tranches on Monday.

Three of the issuers came with drive-by deals.

One issuer upsized. Another downsized.

Executions were mixed. Two of the five tranches priced at the tight ends of talk. Two came on top of talk. And one came at the wide end.

Post Holdings priced and upsized $1.75 billion of senior notes (B3/B) in two tranches.

The deal included $1 billion of eight-year notes which priced at par to yield 5½%. The yield printed at the tight end of the 5½% to 5¾% yield talk.

Post also priced $750 million of 10-year notes at par to yield 5¾%. The yield printed at the tight end of the 5¾% to 6% yield talk.

The issue amount was increased from $1.5 billion.

Joint bookrunner Barclays will bill and deliver. BofA Merrill Lynch, Credit Suisse, Goldman Sachs, Nomura and Rabo were also joint bookrunners.

The St. Louis-based consumer packaged goods producer plans to use the proceeds to redeem its existing 6¾% senior notes due 2021 and 7 3/8% senior notes due 2022, with any remaining proceeds to be used for general corporate purposes including capital expenditures and acquisitions.

AmeriGas drives by

After a brief respite, AmeriGas Partners returned to the primary market on Monday with a quick-to-market $525 million issue of non-callable 10.25-year senior notes (Ba3/BB) priced at par to yield 5¾%.

The yield printed at the wide end of the 5½% to 5¾% yield talk. Initial guidance was also 5½% to 5¾%.

J.P. Morgan, Wells Fargo, Citigroup and BofA Merrill Lynch were the joint bookrunners.

The Valley Forge, Pa.-based propane marketer plans to use the proceeds to finance a tender offer for its 7% senior notes due 2022 and for general business purposes.

Just shy of two months ago, on Dec. 13, the company priced $700 million of senior bullet notes due May 20, 2025 at par to yield 5½%.

Markit’s eight-year bullet

London-based financial information and services company IHS Markit priced a $500 million issue of non-callable eight-year senior notes (Ba1/BB+/BBB) at par to yield 4¾%.

The yield printed on top of yield talk that had been set in the 4¾% area.

BofA Merrill Lynch, Wells Fargo, HSBC, JP Morgan and RBC were the joint bookrunners.

Proceeds will be used for working capital and other general corporate purposes which initially will include repayment of debt under the company’s revolving credit facility and may in the future include share repurchases under the previously announced share repurchase authorization.

Vertiv downsizes

In a deal said to have engendered some investor pushback, Vertiv Intermediate priced a downsized $500 million issue of five-year senior PIK toggle notes (Caa1/B-) at 98 to yield 12.55% on Monday.

The cash coupon is 12%, stepping up to 13% in the event of in-kind interest payments. The 100 basis points PIK coupon step up was increased from 75 bps.

The size was decreased from $600 million.

The yield came in line with the 12½% guidance, sources said.

Noting that Vertiv was in the market with a “PIK toggle holdco dividend deal,” market sources characterized it as a hot market transaction that saw price talk march north from early guidance of earlier guidance of 10¼% to 10½%.

BofA Merrill Lynch, J.P. Morgan, Citigroup, Deutsche Bank, Goldman Sachs, Morgan Stanley, BMO and Credit Suisse were the joint bookrunners.

Proceeds were earmarked for paying a cash dividend to the company’s owner and repaying bank debt.

ICBPI roadshow

In the European market Milan-based financial services provider Instituto Centrale delle Banche Popolari Italiane SpA (ICBPI) plans to roadshow a €600 million offering of senior secured fixed-rate PIK toggle notes due May 30, 2021 (existing ratings B3/B) in London on Tuesday and Wednesday.

Further details on the timing of the deal will be announced, the source added.

Global coordinator Deutsche Bank will bill and deliver. BofA Merrill Lynch is also a global coordinator.

HSBC, UBS, Banca IMI, JPMorgan and Goldman Sachs are joint bookrunners.

Proceeds will be used to fund the acquisitions of the merchant acquiring business of Banca Monte dei Paschi di Siena, as well as Bassilichi SpA and DB Cards, or for general corporate purposes.

New AmeriGas trades actively

In the secondary market, traders said that the new 5¾% notes from AmeriGas Partners were among the day’s busiest issues, with one estimating that more than $18 million of those notes changed hands, putting it high up on the day’s most actives list.

However, the propane distributor’s new issue was little moved from its par pricing level, they said, with one seeing the bonds in a 100 1/8 to 100 3/8 bid context, while a second saw them trading between par and 100¼ bid.

One of the sources said that the company’s existing 5½% notes due 2025 were also among more active credits.

He pegged those bonds down around ¼ point on the day at 102 3/8 bid, on volume of more than $9 million.

Post issues post gains

An analyst saw Post Holdings’ new 5½% notes due 2025 trading around a 101 midpoint after they had moved into the aftermarket, up from their par issue price.

He saw the new 5¾% notes due 2027 at 100¾ bid, also up from par.

At another desk, a trader said that Post’s existing bonds “were busy ahead of the new deal,” seeing its 6¾% notes due 2021 up anywhere from ½ to ¾ point.

A second trader called them up 7/8 point at 107 3/8 bid, with around $4 million of volume on the day.

Post, a maker of popular breakfast cereals and other packaged consumer foods such as dry pasta, peanut butter, nuts and granola snacks, plans to use a portion of the new deal proceeds to redeem those bonds.

However, the other existing issue being redeemed with those proceeds, its 7 3/8% notes due 2022 “weren’t doing much today,” one of the traders said, with those bonds staying right around the 104 1/8 mark, little changed on the day, on about $2 million of volume.

Vertiv bonds move up

One of the traders saw Vertiv’s new 12%/13% senior PIK toggle notes due 2022 at 99 bid.

That was up from the discounted 98 issue price at which Vertiv, a Columbus, Ohio-based provider of thermal management, A/C and D/C power, transfer switches, services and information management systems for the data center and telecommunications industries, priced its regularly scheduled forward calendar issue.

Change bonds stay busy

Away from the day’s new issues, traders said that Change Healthcare 5¾% notes due 2025 continued to trade fairly actively, though volume was down from the more than $80 million which had traded after those bonds priced on Friday and then moved into the aftermarket.

One trader saw the San Francisco and Nashville-based healthcare information and technology company’s notes trading during the session between 100 7/8 and 101½ bid, with the last prints of the day in a 101¼ to 101 3/8 bid region.

A second trader saw them at 101¼ while at another desk they were quoted at 101 3/8 bid, up 1/8 point on the day on volume of more than $23 million – down from Friday’s turnover but still robust enough to put it among the day’s busiest movers.

Change had priced its $1 billion issue at par on Friday after that regularly scheduled forward calendar deal had been downsized from an originally shopped $1,235,000,000. The bonds had moved up to around a 101 1/8 to 101 ½ range when they were freed for secondary dealings.

Indicators stay firm

The KDP High Yield Index gained 10 basis points on Monday to close at 72.22, its fourth straight rise and coming after Friday’s 8 bps rise.

Its yield came in by 4 bps to end at 5.08%, its second consecutive narrowing after two sessions in a row on Wednesday and Thursday during which it had been unchanged and Tuesday’s 1 bp widening. On Friday, it had come in by 3 bps. Monday was its third tightening in the last six sessions.

The Merrill Lynch High Yield Index gained 0.092% on Monday, on top of Friday’s 0.23% improvement. That was its fourth straight gain and eighth advance in the last 10 sessions.

Monday’s upturn brought the index’s year-to-date return up to 1.886%, its fourth straight new peak level for the year, topping the previous zenith of 1.792%, set on Friday.

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