Morning Commentary: Boyne, Tronox on deck; GCP Applied’s 5½% paper active in quiet trading

By Paul A. Harris

Portland, Ore., March 27 – Tronox Inc. rolled out a drive-by deal on Tuesday morning.

The Stamford, Conn.-based mining and inorganic chemical company plans to price a $615 million offering of eight-year senior notes (expected ratings B3/B-) before the market close.

The debt refinancing deal comes with initial guidance in the 6 3/8% area, according to a bond trader.

Citigroup Global Markets Inc., BofA Merrill Lynch, Barclays, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., RBC Capital Markets LLC and Wells Fargo Securities LLC are the joint bookrunners.

The Tronox deal appeared in a primary market hard at work attempting to clear a busy $6 billion pre-Easter deal calendar ahead of an early close on Thursday.

Price talk was pending on most of that announced business early Tuesday, sources said.

Boyne talk 7¼%-7½%

Boyne USA, Inc. is also in deck for Tuesday.

The ski resort owner and operator talked its $400 million offering of seven-year senior secured second-lien notes (B2/B) to yield 7¼% to 7½%.

Official talk comes tight to initial guidance of 7½% to 7¾%, traders said.

The order book is four-times deal size, according to a trader, who was receiving a lot of inquiries on the name early Tuesday.

Books close at 1 p.m. ET on Tuesday, and the acquisition financing deal, in the market via Wells Fargo, is set to price thereafter.

‘Yield-y’ issues trade well

Issues that came late last week amid turbulence in the global capital markets paid a concession to the rugged market conditions, sources say.

As a result of the relatively higher yields, those recent deals tend to be trading somewhat better than their tight-pricing counterparts that came in late February and early March, a trader said.

The new Cequel Communications Holdings I, LLC 7½% senior notes due April 2028 (Caa1/B) continue to turn in a strong performance in the secondary, a trader said, marking the paper 102¼ bid, 102¾ offered, and noting that it had just traded at 102½.

The Cequel 10-year paper, which came at par in a $1.05 billion issue priced late last week, was wrapped around 102 on Monday, the source added.

Elsewhere the new KCA Deutag UK Finance plc 9 5/8% secured notes due April 2023 (B3/B-) continue to trade well.

The new five-year secured paper was 101 3/8 bid, 101½ offered on Tuesday.

The $400 million issue also priced at par on Friday.

The company's operations in the Third World kept some U.S. high-yield investors on the sidelines for the KCA Deutag deal, sources say.

The most active name in an otherwise quiet Tuesday market was GCP Applied Technologies Inc., a trader said.

The new GCP Applied 5½% senior notes due April 2026 (B1/BB-) were par 1/8 bid at mid-morning, having faded from earlier highs of par 3/8 bid, par ½ offered.

The $350 million deal came at par in a Monday drive-by.

Meanwhile headline news that Fortescue Metals cut its guidance amid expectations that prices could slip amid slower construction activity in China and trade war tensions, saw the Australia-based iron ore producer's recently minted bonds marked lower.

The FMG Resources (August 2006) Pty Ltd. 5 1/8% senior notes due 2023 (Ba2/BB/BB+) were 99½ bid on Tuesday, unchanged on the day, the trader said.

Those notes, which came at par in a $500 million issue on March 1, subsequently traded as high as par ¼ bid, par 3/8 offered, the source added.

High-yield ETFs were flat in early Tuesday trading.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 0.07%, or 6 cents, at $85.53 per share.

© 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.