Wyndham, POWDR price; MasTec on tap; Norwegian flat; Ford gains; Icahn Enterprises active

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 20 – While new deal activity is expected to be muted in the coming days due to the earnings season blackout, the domestic high-yield primary market’s deal stream was steady on Monday.

Wyndham Destinations, Inc. priced an upsized $500 million issue of six-year senior secured bullet notes (Ba3/ BB-/BB+), and POWDR Corp. priced a $300 million issue of five-year senior secured notes (B1/B).

The forward calendar also grew with MasTec, Inc. planning to price a $400 million offering of eight-year senior notes (Ba3/BB) on Tuesday, and Empire Resorts Inc. in the market with a benchmark offering of dollar-denominated senior secured notes.

In the European primary market, Stonegate kicked off a two-part sterling- and euro-denominated offering.

Meanwhile, the secondary space launched the week on strong footing. However, volume remained light with the new deal pipeline slowing down, sources said.

Norwegian Cruise Line Holdings Ltd.’s recently priced 10¼% senior notes due 2026 (Ba2/BB) remained active although the notes were largely trading sidewise.

Ford Motor Co.’s 8½% senior notes due 2023, a stalwart on the trace chart, continued their upward momentum with the notes gaining another 1 point.

Icahn Enterprises LP and Icahn Enterprises Finance Corp.’s 4¾% senior notes due 2024 saw renewed attention in the secondary space with the notes among the top traded during Monday’s session.

Monday’s session

Despite expectations that an earnings blackout could mute new issue activity into the end of July, the news flow remained steady in the high-yield primary market on Monday.

Wyndham Destinations priced an upsized $500 million issue of six-year senior secured bullet notes (Ba3/ BB-/BB+) at par to yield 6 5/8% in a drive-by.

The issue size increased from $500 million

The yield printed at the tight end of yield talk in the 6¾% area. Initial talk was in the 7% area.

The deal was heard to be playing to $1.1 billion of orders at around noon ET on Monday.

POWDR Corp. priced a $300 million issue of five-year senior secured notes (B1/B) at par to yield 6%, also in a drive-by.

The yield printed on top of yield talk. Early guidance was in the 6¼% to 6½% area.

The calendar

Looking at the active forward calendar, MasTec plans to price a $400 million offering of eight-year senior notes (Ba3/BB) on Tuesday.

The notes, which were scheduled to be shopped on a Monday investor call, are in the market with initial guidance in the high 4% area to 5%.

In Europe, pub operator Stonegate kicked off a two-part offering of five-year senior secured notes (expected ratings B3/B+) including £950 million of fixed-rate notes and €300 million of floating-rate notes. Pricing is expected Friday.

And Empire Resorts mandated BNP Paribas, Citigroup and DBS Bank as joint bookrunners for a benchmark offering of dollar-denominated five-year senior secured notes (/B+/B+) that are being marketed to high-yield investors.

Discussions with fixed income investors in Asia, Europe and the United States were underway on Monday (see related stories in this issue).

Norwegian flat

Norwegian Cruise Line’s 10¼% senior notes due 2026 were active but flat on Monday.

The notes continued to trade in the par to par ¼ context, a market source said.

With more than $20 million in reported volume, the notes remained one of the most actively traded issues in the secondary space.

The 10¼% notes have been largely wrapped around par since the cruise line operator priced the $750 million issue on July 16.

Ford gains

Ford’s 8½% senior notes due 2023 continued their upward momentum in active trading on Monday.

The notes were up another 1 point to trade in the 109 5/8 to 110 context, a source said.

Ford’s junk bonds have been a stalwart on the trace volume charts with the notes active even on light-volume days.

With the 8½% notes a $3.5 billion issue, they are highly liquid, a source said.

The notes are also among the issues that have been purchased by the Federal Reserve’s Secondary Market Corporate Credit Facility.

The Federal Reserve has purchased $9.5 million par value of the 8½% notes, according to the SMCCF’s transaction-specific disclosure list.

It is the credit facility’s 7th largest holding for individual corporate bonds.

Icahn active

Icahn Enterprises’ 4¾% senior notes due 2024 were active on Monday.

The notes were trading in the 97½ to 98 context throughout the session, which has largely been the market for the notes, a market source said.

However, there were two small prints for 350 bonds and 250 bonds at 99½ in the late afternoon.

“Who would pay that,” a source said.

The notes saw renewed attention on Monday with about $14 million of the bonds on the tape, making the notes among the most actively traded of the session.

However, sources queried were unsure of the reason for the sudden spike of activity in the issue.

$10 million Friday outflows

The dedicated high-yield bond funds were essentially flat on Friday when they saw $10 million of net daily outflows, according to a market source.

Actively managed high-yield funds saw $115 million of inflows on the day, which were shaded by $125 million of outflows from high-yield ETFs, the source said.

Indexes

The KDP High Yield Daily index gained 13 basis points to close Monday at 65.96 with the yield now 6.17%.

The ICE BofAML US High Yield index jumped 44.8 bps with the year-to-date return now negative 2.133%.

The CDX High Yield 30 index closed Monday at 101.58.

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