Junk market sells $4.29 billion; Bausch Health gains; Antero at a premium; Nielsen weakens

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 25 – Junk issuers notched another $4.29 billion on Tuesday, as five issuers priced a total of six tranches.

Meanwhile, it was another sideways day in the secondary space with volume light outside of recent issues.

“No one wants to sell,” a source said.

New paper continued to dominate the tape although with mixed trajectories.

Bausch Health Cos., Inc.’s 4 7/8% senior secured notes due 2028 (Ba2/BB) were putting in a strong performance with the notes trading on a 101-handle.

However, the company’s unsecured tranches continued to trade off.

Antero Midstream Corp.’s 5 3/8% senior notes due 2029 (B1/BB-) were also trading with a healthy premium to their issue price.

However, Nielsen Holdings two-tranches of senior notes (B2/BB) gave up much of their early gains with both tranches falling back to par heading into the market close.

DT Midstream

DT Midstream, Inc., the session's biggest issuer, priced $2.1 billion of senior notes (Ba2/BB+/BB+) in two tranches.

The deal included $1.1 billion of 4 1/8% eight-year notes and $1 billion of 4½% 10-year notes, both of which priced at par, at the tight ends of talk, playing to $5 billion of demand across both tranches, with a “good amount of reverse inquiry,” a trader said (see related stories in this issue).

Bausch Health in focus

Bausch Health’s 4 7/8% senior secured notes due 2028 were putting in a strong performance in the secondary space with the notes rising to a 101-handle.

The 4 7/8% notes traded as high as 101 7/8 during Tuesday’s session.

However, they were coming in from their highs and trading in the 101 1/8 to 101½ context heading into the market close, a source said.

The notes were in focus with $166 million in reported volume.

Bausch Health priced a $1.6 billion issue of the 4 7/8% senior secured notes at par in a Monday drive-by.

The yield printed at the tight end of yield talk in the 5% area.

The deal was heard to have played to $4.25 billion in orders.

While Bausch Health’s newly priced secured notes were performing well, the company’s unsecured tranches continued their downward trajectory.

Bausch’s 5% senior notes due 2028 were down 1 3/8 points to close Tuesday at 94¾.

The Quebec-based specialty pharmaceuticals company’s 5¼% senior notes due 2030 were off another 1 point to close the day at 92 5/8.

The notes were also off more than 1 point on Monday.

Bausch’s unsecured tranches were trading down in the wake of the company’s new secured offering, which pushed the notes farther down the capital structure, sources said.

Bausch’s capital structure was under pressure earlier in the month, as well, after the company announced the spinoff of its eyecare business.

While the company’s notes were trading up in anticipation of the announced asset sale, the spinoff resulted in an increase in the company’s targeted leverage.

The remaining company “was not looking any better,” a source said.

Antero at a premium

Antero Midstream’s 5 3/8% senior notes due 2029 were putting in a solid performance in the secondary space.

The notes were changing hands in the par 7/8 to 101 1/8 context throughout Tuesday’s session.

There was about $27.5 million of the notes on the tape.

Antero Midstream priced an upsized $750 million, from $650 million, issue of the 5 3/8% notes at par on Monday.

The yield printed at the wide end of the 5¼% to 5 3/8% yield talk.

Nielsen’s tranches

Nielsen’s tranches grew softer on Tuesday with the notes coming in from their highs to trade back down to par.

The 4½% senior notes due 2029 traded as high as 101 3/8 during Tuesday’s session. However, they closed the day in the par to par ½ context, a source said.

There was $76 million in reported volume.

Nielsen’s 4¾% senior notes due 2031 traded as high as par 5/8. However, they were changing hands in the par to par ¼ context heading into Tuesday’s close.

The notes were active with more than $100 million in reported volume.

The New York-based information, data and market measurement company is a solid credit and is not highly leveraged, a source said.

However, the pricing of the notes was tight.

Nielsen Holdings priced an upsized $625 million, from $500 million, tranche of the 4½% notes and an upsized $625 million, from $500 million, tranche of the 4¾% notes at par on Monday.

The 4½% notes priced in the middle of yield talk in the 4½% area; the 4¾% notes priced in the middle of yield talk in the 4¾% area.

Monday fund flows

The dedicated high-yield bond funds saw $137 million of net inflows on Monday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $467 million of inflows on the day.

However actively managed high-yield funds sustained $330 million of outflows on Monday, marking the eighth consecutive substantial daily outflow for the asset managers.

Among those eight consecutive daily outflows, Monday's $330 million was the smallest, according to a Prospect News analysis of the data.

The largest outflows were $580 million, apiece, seen on Thursday, May 20, and on Tuesday, May 18.

Across that eight-day stretch the actively managed funds averaged $488 million of daily outflows.

During the same interval the high-yield ETFs have averaged $405 million of daily inflows.

Trading activity bears out the contrast, a trader said on Tuesday, adding that the past several sessions have seen robust offers-wanted-in-competition (OWICs), most of them emanating from the ETFs.

Indexes mixed

Indexes were again mixed on Tuesday with some posting nominal losses and others nominal gains.

The KDP High Yield Daily index was flat and closed Tuesday flush with Monday at 69.44 with a yield of 3.94%.

The index shaved off 1 point on Monday.

The ICE BofAML US High Yield index rose 10.6 bps with the year-to-date return now 2.112%.

The index was up 7.7 bps on Monday.

The CDX High Yield 30 index fell 10 bps to close Tuesday at 109.45.

The index rose 15 bps 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.