Junk: Tekni-Plex prices; Benteler sets talk; Allwyn powers higher; CSC, Atlas Air lower

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 25 – In the junk bond primary market on Tuesday, Trident TPI Holdings, Inc. priced a $620 million offering.

Meanwhile, it was a soft day in the secondary space as First Republic Bank’s earnings reawakened concerns about the stability of the banking sector.

However, the cash bond market held up well compared to the selling pressure in equities with the market off 1/8 to ¼ point, a source said.

Trading activity remained thin with new and recent issues continuing to dominate the tape.

Allwyn Entertainment Financing (UK) plc’s 7 7/8% senior secured notes due 2029 (BB/BB-) continued to add in heavy volume despite a soft day for the market.

Kedrion Biopharma/Kevlar SpA’s 6½% senior secured notes due 2029 (B3/B) pared their losses since breaking for trade although the notes remained well below their discounted issue price.

Altice USA, Inc. subsidiary CSC Holdings, LLC’s recently priced 11¼% senior guaranteed notes due 2028 (B1/B) continued to lose steam in aftermarket activity with the notes dropping further below par during Tuesday’s session.

However, Rand Parent, LLC’s 8½% first-lien senior secured notes due 2030 (Ba1/BB/BB+), backing the buyout of Atlas Air, remained the worst performing deal of 2023 with the notes returning to a 91-handle on Tuesday.

Primary

In the dollar-denominated primary market Trident TPI Holdings, Inc., the parent of Tekni-Plex Inc., priced a $620 million issue of 12¾% senior notes due Dec. 31, 2028 (Caa2/CCC+) at 98.939 to yield 13%.

The coupon came on top of coupon talk. The price came at the rich end of the 97.97 to 98.939 price talk. The yield printed at the tight end of the 13% to 13¼% yield talk.

Pricing tightened significantly from initial guidance that had the deal coming with a 13% coupon at two points to three points of OID to yield in the mid-to-high 13% area, sources said.

Ahead of that tightening the deal was playing to $2.25 billion of orders, a trader said.

The deal priced very late on Tuesday, and allocations were difficult, as anticipated, hence the bonds were not actively trading, post-close, the source added.

There was heard to be $550 million to $600 million of reverse inquiry behind the deal, a market source said.

Elsewhere Benteler International AG set wide-to-guidance initial price talk in the high-10% area on a $500 million tranche of five-year senior secured notes. Initial guidance was in the 10½% area.

Benteler’s dollar notes were heard to be playing to $1.1 billion of orders, a trader said.

The Salzburg, Austria-based supplier of automotive components and technologies is also selling €525 million of the notes with initial price talk in the mid-to-high 9% area. Initial guidance was in the low-to-mid 9% area.

The overall €975 million equivalent deal is expected to price before the end of the week.

Allwyn gains continue

Allwyn’s 7 7/8% senior secured notes due 2029 continued to add to the strong gains made since breaking for trade.

The notes rose ¼ to 3/8 point to break above a 101-handle.

The notes closed Tuesday in the 101 7/8 to 102 1/8 context, a source said.

There was $30 million in reported volume.

The London-based lottery operator’s 7 7/8% notes have made strong gains since pricing at par on April 21.

The notes broke to a 101-handle and have continued to climb since.

Kedrion/Kevlar pare losses

Kedrion/Kevlar’s 6½% senior secured notes due 2029 pared their losses from the previous session although the notes remained well below their discounted issue price.

The 6½% notes gained 1 point to trade in the 82½ to 82¾ context on Tuesday although activity in the issue quieted, a source said.

The pharmaceutical company’s 6½% senior notes have struggled since the $790 million issue priced at 84 to yield 9.963% on April 21.

While the notes regained some footing after trading down to the 81½ to 82 context on Monday, they remain well below their issue price.

CSC Holdings lower

CSC Holdings’ recently priced 11¼% senior guaranteed notes due 2028 sank further below par in active trade on Tuesday.

The 11¼% notes were off ½ point with the notes breaking below a 99-handle.

They were changing hands in the 98 7/8 to 99 1/8 context heading into the market close, a source said.

There was $18 million in reported volume.

The notes have traded on a 99-handle since late last week.

The $1 billion issue initially had a strong break after pricing at par on April 18 with the notes trading up to par ½ bid, 101 offered.

However, they quickly gave back their gains.

Atlas Air down again

Atlas Air’s 8½% first-lien senior secured notes due 2030 again had heavy selling pressure on Tuesday with the notes returning to a 91-handle.

The 8½% notes opened the day with trades in the 91 7/8 to 92 1/8 context, a source said.

They continued to trade down throughout the session with the notes closing the day in the 91¼ to 91½ context with the yield north of 10¼%.

There was $27 million in reported volume.

The 8½% notes continue to claim the title of the worst performing deal of 2023.

The $850 million issue priced at par on Feb. 9.

Fund flows

High-yield ETFs had $248 million of daily cash inflows on Monday, the most recent session for which data was available at press time, according to a market source.

The cash flows of the actively managed high-yield funds were flat on Monday, with that cohort posting $2 million of inflows on the day.

The combined funds are tracking $705 million of net inflows for the week that will conclude with Wednesday’s close, according to the market source.

Indexes

The KDP High Yield Daily index rose 6 points to close Tuesday at 51.91 with the yield 7.09%.

The index gained 9 points on Monday.

The ICE BofAML US High Yield index inched up 1.2 basis points with the year-to-date return now 4.406%.

The index rose 21.2 bps on Monday.

The CDX High Yield 30 index fell 54 bps to close Tuesday at 100.74.

The index shed 1 bp on Monday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.