Morning Commentary: Intelsat, Nexans, PGT trade to premiums; Herbalife sets roadshow

By Paul A. Harris

Portland, Ore., Aug. 3 – High-yield bonds opened flat on Friday, according to a trader in New York.

Recently priced junk tended to be trading at premiums to new issue prices, sources said.

The new Intelsat Connect Finance SA 9½% senior notes due Feb. 15, 2023 (Ca/CCC-) were 99½ bid, 99¾ offered on Friday morning, according to the New York trader.

Another trader spotted them at 99 5/8 bid, 99 7/8 offered.

The upsized $1.25 billion issue (from $1 billion) priced at 98.25 to yield 10.004% on Thursday, playing to $3.5 billion of orders an hour before the close of books.

There was said to be $1 billion of reverse inquiry in the deal, a bond trader said.

The new PGT Innovations, Inc. 6¾% senior notes due August 2026 (B3/B) were 101½ bid, 102 offered on Friday morning.

The $315 million issue priced at par on Thursday.

The FS Energy and Power Fund 7½% senior secured notes due August 2023 were 98½ bid, 99¼ offered on Friday.

The $500 million issue priced at 97.973 to yield 8% on Thursday.

In light of a sparse July new issue calendar, both PGT Innovations and FS Energy were heard to play to big demand: both two to three times oversubscribed, sources said.

Among recent euro-denominated issues, Nexans SA’s 3¾% senior bullet notes due August 2023 were trading around 101½ on Friday, according to a London-based sellside source close to the deal.

The upsized €325 million issue (from €300 million) priced at par on Wednesday, playing to €900 million of orders at final talk.

Ken Garff on deck

The late summer Friday primary market generated just two news items ahead of midday.

Ken Garff Automotive Group is on deck to price before the weekend with a $350 million offering of five-year senior notes (B1/B) talked to yield in the 7½% area.

Official talk comes toward the wide end of early guidance in the 7¼% to 7½% area, a trader said.

Books were scheduled to close late Friday morning.

And Herbalife Nutrition Ltd. disclosed plans to start a roadshow on Monday for a $400 million offering of eight-year senior notes via left bookrunner Jefferies LLC.

The debt refinancing deal is expected to price late in the Aug. 6 week.

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