Oasis prices drive-by; Fair Isaac, Neptune Energy on tap; Sprint volatile; WeWork losses continue

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 30 – Monday saw the pricing of a $400 million drive-by offering with the forward calendar for the domestic and European market growing.

In drive-by action on Monday, Oasis Petroleum Inc. priced a $400 million issue of eight-year senior notes (B3/BB-) at par to yield 6¼%. The notes were seen just above par after breaking for trade.

Neptune Energy Group Midco Ltd. and Neptune Energy Bondco plc’s $500 million offering of seven-year senior notes (B2/BB-) and Fair Isaac Corp.’s $400 million offering of an eight-year senior bullet (Ba2/BB+) are on deck for Tuesday.

In the domestic market, Consolidated Energy Finance SA and Merlin Entertainment plc launched roadshows on Monday. In the European market, Nexi Capital SpA and Aldesa Agrupacion Empresarial, SAU launched new offerings.

Sprint Corp.’s junk bonds were in focus in the secondary market on Monday and losing ground later in the session after early gains with optimism surrounding the merger agreement with T-Mobile overcast by doubts about regulatory approval.

WeWork Cos. Inc.’s newly priced 7 7/8% senior notes due 2025 (Caa1/B+/BB-) continued to lose ground on Monday with the notes now trading with a 96 handle, a market source said.

McDermott International Inc.’s recently priced 10 5/8% senior notes due May 2024 (B2/B-) continued to gain strength in the secondary market with the notes seen trading up to 101 after pricing with a deep discount of 94.75.

American Tire Distributors Inc.’ 10¼% senior notes due 2022 continues to be a closely watched name in the high-yield space with the notes now trading in the mid-50s amid speculation about the future prospects of the company.

Oasis drives-by, trades above par

Oasis Petroleum priced a $400 million issue of eight-year senior notes (B3/BB-) at par to yield 6¼% in drive-by action Monday.

The yield printed in the middle of yield talk in the 6¼% area and tight to initial price talk in the 6¼% to 6½% area.

Wells Fargo was the left lead physical bookrunner for the bond debt refinancing deal. Citigroup was also a joint physical bookrunner.

The new 6¼% notes were trading just above par after breaking for trade late in the afternoon, a market source said. They were seen at par ¼ bid, par ½ offered, a market source said.

Neptune Energy talks 6¾% area

Neptune Energy Group and Neptune Energy Bondco plan to price a $500 million offering of seven-year senior notes (B2/BB-) on Tuesday.

Talk in the 6¾% area surfaced Monday, coming tight to initial talk in the high 6% to 7% area.

Fair Isaac’s eight-year bullet

Fair Isaac plans to price a $400 million eight-year senior bullet (Ba2/BB+) on Tuesday.

The deal was scheduled to be shopped on a Monday investor conference call.

As the market awaits official talk, initial price talk has the debt refinancing deal, via left bookrunner Wells Fargo, coming with a yield in the 5½% area.

Consolidated Energy Finance roadshow

Consolidated Energy started a roadshow on Monday for a $525 million offering of eight-year senior notes (B2/BB).

The deal, via global coordinators Morgan Stanley and JP Morgan, is set to price Thursday.

The Luxembourg-based producer of ammonia and methanol plans to use the proceeds to redeem its 6¾% senior notes due Oct. 2019.

Merlin Entertainment’s bullet

Merlin Entertainment started a roadshow on Monday for a $400 million offering of non-callable eight-year senior notes (Ba2/BB).

The debt refinancing deal from the Poole, England-based operator of hotels and holiday attractions is expected to price Wednesday.

Citigroup is the left bookrunner. Barclays is the joint bookrunner.

Nexi’s €2.2 billion dual-tranche deal

In the European primary market, Nexi Capital launched a €2.2 billion two-part offering of five-year senior secured notes (B1/B+).

Pricing is expected at the end of the April 30 week.

The deal is coming in tranches of fixed-rate notes and floating-rate notes. Tranche sizes remain to be determined.

BofA Merrill Lynch is leading the offer.

The Milan, Italy-based provider of automated payment services plans to use the proceeds, together with €400 of senior secured notes to be privately placed, and cash on hand, to refinance debt.

Aldesa €300 million secured deal

Elsewhere in the European primary market, Spain's Aldesa Agrupacion Empresarial began marketing a €300 million offering of seven-year senior secured notes (Moody's: B2/Fitch: B) on Monday.

JPMorgan is the lead.

The Madrid-based provider of engineering and construction services plans to use the proceeds to refinance its 7¼% senior secured notes due 2021.

Sprint volatile

Sprint’s junk bonds were in focus in the secondary space on Monday after the much-anticipated merger agreement with T-Mobile was announced on Sunday.

While the bonds were up early in the session, they dropped in the afternoon with most notes seeing losses between 0.25 point to 2 points, a market source said.

The notes have made steady gains since April 10 when news broke that the telecommunications company was again at the negotiating table with T-Mobile.

However, the junk bonds pulled back on Monday due to concerns that regulators would attempt to block the merger.

T-Mobile is the third and Sprint the fourth largest wireless carrier in the United States.

The shorter dated bonds were down ¼ to 1 point with the longer dated bonds down 2 points, a market source said.

“There was a little reversal,” a market source said. “As things get sorted out, it will be choppy.”

Sprint’s 8¾% notes due 2032 were seen down more than 2 points with trades just south of 115 on Monday. Sprint’s 7 5/8% notes due 2025 were seen down more than 1 point to 105 3/8.

Sprint’s 7 7/8% notes due 2023 were seen down more than ¼ point to 107 5/8. Sprint’s 7 5/8% notes due 2026 were seen down 1.5 point to 105¼.

Sprint’s 7 1/8% notes due 2024 were seen down 1.5 point to 98 7/8.

In the $26.5 billion deal, the two companies would merge in an all stock transaction with 9.75 Sprint shares equaling one T-Mobile share. The deal values Sprint at $6.62 per share, according to CNBC.

The combined company would retain the T-Mobile brand with T-Mobile chief executive officer John Legere and T-Mobile chief operating officer Mike Sievert continuing in those roles.

The remaining members of the management team will be selected from both Sprint and T-Mobile, according to a company news release.

Previous attempts to negotiate a merger failed due to disagreement over who would control the combined business. The merger now hinges on regulatory approval.

WeWork’s losses continue

WeWork’s newly priced 7 7/8% senior notes due 2025 continued to lose value on Monday with the notes down another point to trade at 96.5, a market source said.

While the notes were seen at 97 3/8 bid, 97 7/8 offered early in the session, they were trading on a 96 handle by the late afternoon, a market source said.

The notes remained active in the secondary space with more than $38 million on the tape. “The name continues to be under pressure,” a market source said.

WeWork priced the 7 7/8% senior bullet notes at par on Wednesday. The deal was upsized to $702 million from $500 million.

The deal was said to be as much as five-times oversubscribed, which sources have questioned given its performance in the secondary market.

McDermott gains

While WeWork’s deal fell apart, McDermott’s recently priced 10 5/8% senior notes due May 2024 (B2/B-) continued to see gains in the secondary market with the notes trading up to 6 points above their issue price.

The 10 5/8% notes were a major volume mover during Monday’s session with more than $29 million on the tape. They were seen up about 1 point to trade in a range of par ½ to 101.

McDermott priced a downsized $1.3 billion issue of 10 5/8% six-year senior notes at 94.75 to yield 11.865% on April 4.

While the deal struggled during the bookbuilding process, the notes have performed well since hitting the secondary market.

ATD closely watched

American Tire Distributor’s 10¼% senior notes due 2022 continue to be “closely watched” in the secondary market, after the notes lost more than 50% of their value last week.

While the notes rebounded from trades in the low 40s last week, they are now floating around the mid-50s, a market source said. The notes remained active in the secondary space with $23 million bonds traded by late afternoon.

“It’s a name everyone is clearly watching because it fell so hard so quick,” the source said.

The notes lost nearly 50% of their value, dropping into the 40s on April 24 after news broke Goodyear Tire & Rubber Co. had ended its distribution relationship with the company.

S&P lowered its issue-level rating on the notes to CCC- from CCC last week and Moody’s Investor Service placed ATD on review for downgrade.

Indexes

After breaking its losing streak on Friday, the KDP High Yield index saw a slight decrease on Monday. The index was down 1 basis point to 70.50 with the yield unchanged at 5.83%.

The index saw gains on Friday and was up 5 bps to 70.51 after posting losses since April 19.

The CDX High Yield 30 index was also down slightly on Monday after seeing gains on Friday. The index was down 6.5 basis points mid-afternoon Monday, according to a market source.

The index broke a losing streak last Thursday that had existed since April 17. The index was up 5 bps to close Friday at 106.98.

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