Morning Commentary: WernerCo notes on deck; Solenis struggles; Griffin Global quiet

By Abigail W. Adams

Portland, Me., May 25 – The domestic high-yield bond primary market stood poised for a quiet session on Thursday following the previous day’s deluge of issuance with only one deal set to clear the forward calendar.

WernerCo subsidiaries Werner FinCo LP and Werner FinCo, Inc. are on deck with a $400 million offering of five-year senior secured first-lien notes, which are guided with a yield of 11¾% to 12%.

The deal is a unique transaction for the primary market with the new notes pricing alongside an exchange for any and all outstanding 8¾% senior notes due 2025 for new junior lien senior secured notes due 2028.

The deal played to a close-knit group of investors with allocations to new money expected to be tight, a source said.

The deal was heard to be playing to $500 million of orders with 10 new accounts involved, a source said.

Meanwhile, the tone in the secondary space improved on Thursday with cash bonds adding about 1/8 point at the open.

However, the deluge of new paper that priced the previous session were following different trajectories.

GGAM Finance Ltd.’s (Griffin Global Asset Management) newly minted tranches of senior notes were extremely quiet in secondary market activity, a source said.

The 7¾% senior notes due May 15, 2026 and 8% senior notes due June 15, 2028 (BB-/BB) were wrapped around par with only a few prints on the tape.

The deal may have been “placed to perfection,” or the lack of price appreciation may be enticing holders to hold, a source said.

Griffin Global priced a $400 million tranche of the 7¾% senior notes and a $600 million tranche of the 8% notes at par on Wednesday.

Olympus Water US Holding Corp.’s (Solenis) new 9¾% senior secured notes due 2028 continued to struggle after a weak break.

The 9¾% notes were marked at 99½ bid, par offered in early trade.

The notes saw a weak break and were trading below par as soon as they broke for trade, a source said.

Solenis priced a $1.7 billion tranche of the 9¾% notes at par on Wednesday as part of a two-tranche $2.375 billion equivalent offering backing Solenis’ acquisition of Diversey Holdings Ltd.

While several recent deals have struggled in the aftermarket with most trading on either side of par, Seagate HDD Cayman’s newly priced 8¼% senior notes due 2029 and 8½% senior notes due July 15, 2031 (Ba3/BB/BB+) continued to add after a strong break.

The 8¼% and 8½% notes were both changing hands in the 101½ to 102 context in early trade after shooting up to a 101 on the break.

Seagate is a well-known and well-liked name and the pricing was cheap with the notes coming well wide of the BB index, sources said.

Seagate priced a $500 million tranche of the 8¼% notes and a $500 million tranche of the 8½% notes at par on Wednesday.

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