Cvent, Iqvia price; First Quantum, XPO struggle in secondary; funds lose $1.15 billion

By Abigail W. Adams

Portland, Me., May 18 – The domestic high-yield primary market remained active on Thursday with two issuers pricing $900 million in junk-rated tranches.

Capstone Borrower Inc. priced a downsized $400 million offering of seven-year senior secured notes (B2/B-/BB) backing Blackstone’s acquisition of Cvent Holding Corp.

In keeping with a recent trend, the notes saw a weak break and closed below issue price.

In drive-by action, Iqvia Holdings Inc. priced an upsized $1.25 billion offering of investment-grade secured notes and junk-rated unsecured notes.

The calendar remains robust with Venture Global LNG Inc.’s $3.5 billion offering of secured and unsecured notes slated to price on Friday and three deals on deck for the May 22 week.

Venture Global’s megadeal will lift the May 15 week to one of the top five highest volume weeks of the year for new deal activity.

However, it is not likely to claim the title of the busiest with bank loans continuing to capture some market share.

Wyndham Hotels & Resorts Inc. had telegraphed its intention to offer $400 million of senior secured notes as part of refinancing transactions for its term loan B.

However, the offering is no longer on the table with the company instead upsizing a new term loan to meet its refinancing needs, sources said.

Meanwhile, it was a largely flat day in the secondary space with risk appetite weak.

The pace of bids-wanted-in-competition lists slowed after outpacing offers-wanted-in-competition lists nearly 5-to-1 on Tuesday.

However, exchange-traded funds remained sellers with BWICs continuing to outnumber OWICs by a large margin.

The deals that priced during Wednesday’s session continued to struggle in the aftermarket following weak breaks.

First Quantum Minerals Ltd.’s new 8 5/8% senior notes due 2031 (B+/B+) were lower in active trade after closing the previous session on a 99-handle.

XPO Inc.’s secured and unsecured tranches were also lagging their issue price in secondary activity.

Outflows continued to weigh on the market with high-yield mutual funds and ETFs seeing $1.15 billion leave the space.

Cvent prices, lags on break

Capstone Borrower priced a downsized $400 million offering of seven-year senior secured notes on Thursday at par to yield 8% to finance Blackstone’s acquisition of Cvent Holding, according to a market source.

The initial size of the offering was $500 million; however, $100 million of proceeds were shifted to a concurrent term loan.

Initial price talk was for a yield in the 8% area. Early guidance was for a yield in the low 8% area.

Firmed pricing has the deal coming at par to yield 8%.

The deal was downsized to $400 million from $500 million with proceeds shifted to a concurrent term loan.

While downsized in favor of the term loan, the offering was heavily oversubscribed, a source said.

However, they saw a weak break with the notes dropping below issue price and closing the day wrapped around 99¾, a source said.

Iqvia drives by

Iqvia priced an upsized $1.25 billion of senior notes in secured and unsecured tranches in a Thursday drive-by, according to market sources.

The deal included a $500 million tranche of seven-year senior notes (Ba2/BB), which priced at par to yield 6½%.

Price talk was for a yield of 6½% to 6¾%. Initial guidance was for a yield in the mid to high 6% area.

The tranche priced alongside an upsized $750 million, from $500 million, tranche of investment-grade five-year senior secured notes (Baa3/BBB-), which priced at 99.993 to yield 5.702%.

Recent deals weak

While the drive-by deals that cleared the primary market on Wednesday were heard to have played to decent demand, they were heavy in the secondary space with the market’s weak risk appetite weighing on their performance, sources said.

First Quantum Minerals’ new 8 5/8% senior notes due 2031 (B+/B+) continued to move lower in active trade after closing the previous session on a 99-handle.

The notes were marked at 99¼ bid, 99½ offered in early trade.

They were lifted slightly as the session progressed to close the day in the 99 3/8 to 99 5/8 context.

The notes dropped to a 99-handle shortly after breaking for trade and were trading in the 99½ to 99¾ context heading into Wednesday’s close.

The mining company priced an upsized $1.3 billion, from $1 billion, issue of the 8 5/8% notes at par in a Wednesday drive-by.

While the notes struggled in the secondary, the deal played to decent demand during book building with pricing coming at the tight end of talk for a yield in the 8¾% area, which tightened from early guidance in the 9% area.

XPO’s secured and unsecured tranches were also lagging their issue price in secondary activity with both trading on a 99-handle.

The 6¼% senior secured notes due 2028 (Ba1/BBB-/BBB-) were marked at 99 bid, 99½ offered, and the 7 1/8% senior notes due 2031 (Ba3/BB-/BB+) were marked at 99¼ bid, 99¾ offered in early trade, according to a market source.

However, both tranches were changing hands in the 99 to 99½ context at the market close.

XPO priced an $830 million tranche of 6¼% secured notes and a $450 million tranche of the 7 1/8% notes at par in a Wednesday drive-by.

Indexes

The KDP High Yield Daily index fell 11 points to close Thursday at 50.31 with the yield now 7.43%.

The index shaved off 3 points on Wednesday, fell 16 points on Tuesday and was flat on Monday.

The ICE BofAML US High Yield index fell 19.5 basis points with the year-to-date return now 3.717%.

The index was down 1.9 bps on Wednesday, 29.7 bps on Tuesday and shed 4.8 bps on Monday.

The CDX High Yield 30 index gained 15 bps to close Thursday at 100.23.

The index gained 56 bps on Wednesday and fell 63 bps on Tuesday after inching up 2 bps on Monday.

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