VistaJet, GasLog add-on price; CNG Holdings; Jefferies Financial on tap; Intelsat gains; Avantor active

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 14 – The domestic high-yield market was active on Tuesday with one new deal and one add-on pricing.

VistaJet Malta Finance plc priced an upsized, restructured $550 million issue of 10½% five-year senior notes (B3/B-) at 98.113 to yield 11% on Tuesday.

GasLog Ltd. priced a $75 million tack-on to its 8 7/8% senior bullet notes due March 22, 2022 at 102.5 to yield 7.885%.

The forward calendar also grew with Jefferies Finance LLC planning to start a roadshow on Wednesday for a $450 million offering of seven-year senior secured notes (Ba3).

And CNG Holdings, Inc. began marketing a $310 million offering of five-year senior secured notes.

However, Eldorado Corp.’s $300 million offering of five-year senior secured second lien notes (Caa1/B) is currently the only deal on the forward calendar set to price before Friday’s close.

Meanwhile, the secondary space showed signs of firming on Tuesday as the market digested the latest developments in the trade war.

Recent deals faded from focus with headline and earnings-related news driving the activity on the tape.

Intelsat SA’s junk bonds were on the rise on Tuesday after positive developments related to its efforts to open the C-band spectrum to 5G.

Vertiv Group Corp.’s 9¼% senior notes due 2024 were bouncing back after trading steadily down throughout late April and early May.

Avantor Inc.’s 9% senior notes due 2025 were active although largely unchanged in the run up to the company’s initial public offering.

Restructured VistaJet upsizes

VistaJet Malta Finance priced an upsized, restructured $550 million issue of 10½% five-year senior notes (B3/B-) at 98.113 to yield 11%.

The issue size increased from $525 million.

The coupon and yield came on top of talk.

The reoffer price came in line with price talk that specified about two points of original issue discount.

Call protection increased to three years from two years, while the first call premium remained unchanged at par plus 50% of the coupon.

There were also covenant changes that bear primarily upon how the company may disburse cash and incur additional debt.

Credit Suisse was the left bookrunner for the debt refinancing deal.

GasLog prices tap

GasLog priced a $75 million tack-on to its 8 7/8% senior bullet notes due March 22, 2022 at 102.5 to yield 7.885%.

The reoffer price came at the cheap end of the 102.5 to 103 price talk.

Credit Suisse was the left lead bookrunner.

The Monaco-based owner, operator and manager of LNG carriers plans to use the proceeds for general corporate purposes.

Jefferies Finance roadshow

There was a modest build-up of the active forward calendar on Tuesday.

Jefferies Finance plans to start a roadshow on Wednesday for a $450 million offering of seven-year senior secured notes (Ba3).

The debt refinancing deal roadshows in New York and New Jersey early in the May 20 week.

Jefferies is the left bookrunner.

CNG begins marketing five-year secured deal

CNG Holdings was scheduled to kick off a $310 million offering of five-year senior secured notes on an investor conference call on Tuesday afternoon.

The debt refinancing deal is set to price early in the week of May 20.

Jefferies has the books.

Nearer at hand, Eldorado Corp. is shopping a $300 million offering of five-year senior secured second lien notes (Caa1/B) on a roadshow set to wrap up on Friday.

Initial talk has that deal shaping up with a yield in the high 8% to 9% area, a trader said.

Heading into the end of the Tuesday session Eldorado was the only deal on the active calendar positioned to price before the Friday close.

That will probably change as early as Thursday, a debt capital markets banker said, provided there is some stability in the global financial markets.

There were issuers expected to come in the early part of the May 13 week, the banker said, adding that those could easily appear before the Friday close, pending market conditions.

Intelsat gains

Intelsat’s junk bonds were on the rise on Tuesday after positive news related to its efforts to open the C-band spectrum to 5G.

Intelsat Luxembourg’s 8 1/8% senior notes due 2023 were among the most actively traded issues in the secondary space with the notes gaining several points.

The 8 1/8% notes were up 2 1/8 points to change hands at 76 7/8 in the late afternoon, according to a market source.

The notes saw more than $33 million in reported volume during Tuesday’s session.

Intelsat’s 7¾% senior notes due 2021 rose 1¾ points to 94.

The 8½% senior notes due 2024 rose 1 5/8 points to 98¼ with more than $12 million of the bonds on the tape.

Intelsat was on the rise after news circulated about congressional support for opening the C-band spectrum for 5G, according to a market source.

On Monday, two senators urged the Federal Communications Commission to take quick action on the proposal, and the FCC Commissioner is now saying action on the spectrum is a top priority.

Intelsat’s capital structure was previously under pressure after the proposal experienced some pushback from congress.

Vertiv Group rises

Vertiv Group’s 9¼% senior notes due 2024 saw large gains on Tuesday after steadily trading down throughout late April and early May.

The 9¼% notes were up 2¾ points on Tuesday to 99¼. The notes closed out last week at 97¾ and dropped down to 96¼ on Monday, a market source said.

They were among the major gainers of Tuesday’s session.

Avantor active

Avantor’s 9% senior notes due 2025 were active on Tuesday although largely unchanged as the Radnor, Pa.-based chemical manufacturer prepares for its initial public offering.

The 9% notes were changing hands around 109 with more than $20 million of the bonds on the tape by the late afternoon.

Avantor is planning to price 154 million shares of common stock at a price between $18.00 and $21.00 per share after the market close on Thursday.

The company also plans to price a $500 million, or 10 million share offering, of $50-par series A mandatory convertible preferred stock with talk for a dividend of 5.75% to 6.25% and a threshold appreciation premium of 17.5% to 22.5%.

Mixed Monday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Monday, the most recent session for which data was available at press time, according to a trader.

High-yield ETFs sustained $240 million of outflows on the day.

However, actively managed high-yield funds saw $105 million of inflows on Monday, the source said.

With three of the five sessions in the present weekly reporting period tallied, the combined funds are tracking $600 million of outflows in the week that began with Thursday's open and will conclude with Wednesday's close, the trader said.

Indexes mixed

Indexes were mixed on Tuesday after a soft start to the week.

The KDP High Yield Daily index slid 2 basis points to close Tuesday at 69.96 with the yield now 5.82%.

The index dropped 10 bps on Monday after a cumulative loss of 31 bps on the week last week.

After sinking below 8% returns on Monday, the ICE BofAML US High Yield index popped back above it on Tuesday.

The index rose 19.7 bps with the year-to-date return now 8.081%.

The index dropped 42.4 bps on Monday after a cumulative decline of 58.5 bps on the week last week.

The index had a meteoric rise in 2019, shooting past 8% returns in early April.

The CDX High Yield 30 index rose 32 bps to close Tuesday at 106.30.

The index plummeted 102 bps on Monday after a cumulative loss of 68 bps on the week last week.

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