Junk: Permian Resources, Heartland add-on price; Alteryx jumps on sale spec

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 6 – Permian Resources Corp. and Heartland Dental used the back-to-business window on Wednesday in the junk bond market to bring a cumulative $665 million of new paper.

Meanwhile, it was another soft day in the secondary space, although the sell-off showed signs of subsiding.

While the cash bond market ended the day down ¼ point, buyers emerged midsession to lift the market into the close, a source said.

While soft, liquidity remained thin as market players awaited the reactivation of the primary market.

As the market awaited the deals in the pipeline, topical news was the driver of activity in the space.

Alteryx, Inc.’s 8¾% senior notes due 2028 (B3/B) were among the largest gainers in the space with the notes bouncing 5 points on rumors the company was exploring a sale.

Anywhere Real Estate Inc.’s senior notes (B3/B-) also made large gains after the real estate services company settled two class action lawsuits.

However, Gray Television, Inc.’s senior notes (B3/B) were under pressure with the company the latest broadcaster to get hit by investor concern over carriage fee disputes.

Reactivated Wednesday

In a follow-on to Tuesday’s active session in the dollar-denominated high-yield primary bond market Wednesday got underway to a steady flow of new issue news.

In drive-by action Permian Resources Corp. priced a $500 million issue of Permian Resources Operating, LLC senior notes due Jan. 15, 2032 (B2/BB-/BB-) at par to yield 7%, in the middle of talk.

The deal was heard to have played to $1.6 billion of orders, according to a trader who said that a lot of accounts were in with limit orders at 7%.

The bonds were wrapped around the issue price heading into Wednesday’s close: 99 7/8 bid, par 1/8 offered, the source said.

Meanwhile Heartland Dental priced an upsized $165 million add-on (from $100 million) to the Heartland Dental, LLC/Heartland Dental Finance Corp. 10½% senior secured notes due April 30, 2028 (B2/B-) at par to yield 10½%.

The issue price came at the rich end of talk.

The deal was heard to be two-times oversubscribed, with 40 accounts in the book, according to a bond trader who saw the new Heartland Dental 10½% add-on notes trade once at par ¼.

Away from the deals that priced on Wednesday Star Parent, Inc. disclosed plans to start a roadshow on Monday for a $1.7 billion offering of seven-year senior secured notes coming in support of the buyout of Syneos Health Inc. by Elliott Investment Management, Patient Square Capital and Veritas Capital, according to market sources.

The roadshow is scheduled to run through Wednesday, Sept. 13, and the notes are set to price thereafter.

The notes are in the market with initial guidance in the 9% area.

The deal, which was pre-marketed in mid-to-late August, is heard to be kicking off to $3 billion of demand.

Alteryx jumps

Alteryx’s 8¾% senior notes due 2028 were the largest gainers of Wednesday’s session with the notes bouncing upwards of 5 points as rumors circulated the company was exploring a sale.

The 8¾% notes jumped above par for the first time since April.

They were trading in the par ¾ to 101¼ context heading into the market close, a source said.

There was $15 million in reported volume.

The notes were trading on a 96-handle heading into Wednesday’s session.

The notes popped on market rumors the data analytics software company was exploring a sale, a source said.

The company hired an investment bank to help it negotiate with potential suitors including private equity firms.

Anywhere gains

Anywhere Real Estate’s senior notes made large gains following news the company had settled two class action lawsuits.

Anywhere Real Estate’s 5¾% senior notes due 2029 added 3½ points to close the day at 75¾, according to a market source.

The yield was 12%.

The 5¼% senior notes due 2030 added 3 points to close the day at 72¾ with the yield 11 1/8%.

There was $9 million in reported volume.

The 7% second-lien senior secured notes due 2030 added 1½ points to close the day at 91 5/8 with the yield 8 5/8%, according to a market source.

There was $8 million in reported volume.

The notes were on the rise following news the company had settled two class action lawsuits related to buyer brokers’ commissions for $83.5 million.

Gray under pressure

Gray Television’s senior notes were under pressure on Wednesday with the company the latest to feel the effect of investor jitters over carriage disputes.

Gray’s 4¾% senior notes due 2030 tumbled 2 points to close the day at 65 1/8 with the yield about 12¼%, according to a market source.

The 7% senior notes due 2027 fell 1½ points to close the day at 86 with the yield about 11¾%.

The notes had more than 2x their average volume on Wednesday, a source said.

Several telecoms and broadcasters have been under pressure with the Disney-Charter carriage fee dispute souring investors on the sector, sources said.

Fund flows

The dedicated high-yield bond funds had $174 million of net daily cash inflows on Tuesday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs had $96 million of inflows on the day.

Actively managed high-yield funds had $78 million of inflows on Tuesday, the source said.

The combined funds are tracking $736 million of net inflows for the week that was set to conclude with Wednesday’s close, according to the market source.

Indexes

The KDP High Yield Daily index was down 11 basis points to close Wednesday at 50.23 with the yield 7.59%.

The index fell 20 bps on Tuesday.

The ICE BofAML US High Yield index was down 27.1 bps with the year-to-date return now 6.673%.

The index was down 25.6 bps on Tuesday.

The CDX High Yield 30 index was off 15 bps to close Wednesday at 102.49.

The index shed 31 bps on Tuesday.

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