Hi-Crush prices, euro primary active; Party City’s new issue lower; Teva slides

By Paul A. Harris and James McCandless

San Antonio, July 27 – Hi-Crush Partners LP brought a slow week in the U.S. high-yield primary to a close with its $450 million offering of eight-year senior notes, priced at par to yield 9½%.

However there was no word on an offering from Intrepid Aviation Group Holdings, LLC that had been expected to price on Friday.

The outlook for the primary is not much stronger: active but not busy, according to sources.

The euro primary fared better, with two deals pricing during the session, €660 million of five-year senior secured notes in two tranches from WFS Global Holding SAS and €300 million of seven-year senior secured notes yielding 5¼% from CEVA Logistics AG.

The secondary market saw volume dip slightly but still remained relatively active, especially for a summer Friday.

Party City Holdings Inc.’s new $500 million of 6 7/8% eight-year senior notes were lower at week’s end

Petrobras Global Finance BV’s 5.999% senior notes due 2028 and 7 3/8% senior notes due 2027 were mixed.

Teva Pharmaceutical Industries Ltd.’s 3.15% senior notes dropped.

Intelsat SA’s notes gained.

Hi-Crush at the wide end

In Friday’s dollar-denominated primary market, Hi-Crush Partners priced a $450 million offering of eight-year senior notes (B3/B-) at par to yield 9½%.

The yield printed at the wide end of the 9¼% to 9½% yield talk and well wide of initial guidance in the 8½% area.

J.P. Morgan, Credit Suisse, Barclays, Morgan Stanley, RBC Capital and UBS were the joint bookrunners.

The Houston-based provider of proppant and logistics solutions to the oil and gas industry plans to use the proceeds to refinance its term loan, as well as to fund the cash portion of its acquisition of FB Industries Inc. and for general partnership purposes.

Elsewhere market watchers were looking for Intrepid Aviation to price its $515 million offering of three-year senior notes (/B/B+) via left bookrunner Jefferies on Friday. However there was no news on the deal, according to an informed source.

The week ahead in the dollar-denominated primary market should be active but probably not busy, sources say.

It could be that dealers may have some of the bigger merger and acquisition deals in the pipeline on hold for the present, according to a debt capital markets banker in New York, who added that it is even possible that some could wait until the post-Labor Day time-frame.

In the interim, the dollar-denominated market should continue to operate at a clip of around $2 billion to $3 billion of issuance per week, the banker said.

WFS prices two-part deal

The euro-denominated new issue market was far more active than its dollar-denominated counterpart during the last Friday in July.

WFS Global Holding (Promontoria Holding 264 BV) priced €660 million of five-year senior secured notes (B3/B-) in two tranches.

The deal featured €400 million of fixed-rate notes which priced at par to yield 6¾%, at the tight end of the 6¾% to 7% yield talk.

The deal also featured €260 million of Euribor plus 625 basis points floating-rate notes which priced at par, the tight end of the Euribor plus 625 to 650 bps spread talk.

Joint global coordinator and joint physical bookrunner BofA Merrill Lynch will bill and deliver. Barclays was also a joint global coordinator and joint bookrunner.

Proceeds, together with equity contributions from Cerberus Capital and the existing management of WFS Global, will be used to finance the indirect acquisition of WFS by Cerberus, including the repayment of certain WFS debt.

CEVA prices tight

CEVA Logistics priced a €300 million issue of seven-year senior secured notes (B1/BB-) at par to yield 5¼%.

The yield printed at the tight end of the 5¼% to 5½% yield talk and tight to initial guidance in the mid-5% area.

HSBC and Credit Suisse were the joint global coordinators for the debt refinancing deal.

Schenck Process upsizes

Schenck Process Holding GmbH priced an upsized €125 million issue of 6 7/8% five-year senior secured notes (B3/B) at 97.01 to yield 7 5/8%.

The amount was increased from €100 million.

The yield printed inside the 7¾% to 8 yield talk.

Global coordinator and joint bookrunner Deutsche Bank will bill and deliver.

The Darmstadt, Germany-based provider of industrial weighing, screening, conveying, automation, filtration and loading/transportation equipment plans to use the proceeds to pay off the bridge loan related to its acquisition of Raymond Bartlett Snow.

Nexans to roadshow on Monday

Nexans plans to start a roadshow on Monday for a €300 million offering of five-year senior bullet notes (S&P: expected BB).

Joint bookrunner Credit Agricole CIB will bill and deliver. BNP Paribas and SG CIB are also joint bookrunners.

The Paris-based manufacturer of copper and optical fiber cable products plans to use the proceeds for general corporate purposes including upcoming debt maturities and bank debt repayment.

Also on the euro calendar for the July-August crossover week is WiZink, with a €515 million offering of five-year senior secured PIK toggle notes (expected ratings B+/BB-) in a deal being led by Goldman Sachs and UBS. The roadshow wraps up on Tuesday.

Mixed Thursday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Thursday, the most recent session for which data was available at press time, according to an investor.

High-yield ETFs saw $151 million of inflows on the day.

However actively managed funds sustained $30 million of outflows on Thursday.

News of Thursday’s daily flows follows a report that the junk funds sustained $548 million of net outflows in the week to the Wednesday, July 25 close, according to AMG Data Services Inc.

There have been nine inflows and 21 outflows in the 30 weeks to date in 2018, according to a Prospect News analysis of the data.

Week sees $1.63 billion

Friday’s activity brought volume in the U.S. primary to $1.63 billion in four deals for the week.

That was well down from $2.97 billion the previous week and the smallest weekly total since the $0.9 billion of the May 27 week, excluding the July 4 holiday week during which the dollar primary took a vacation.

Year-to-date issuance now totals $118.53 billion, 23.6% below the $155.14 billion pace for the comparable period of last year.

Party City down

Party City’s new $500 million issue of 6 5/8% eight-year senior notes (B1/B-) due 2026 were lower in the week’s final session although they remained above par.

The notes fell ¾ point to close at 100¾ bid, according to a market source.

The company priced the notes at par on Thursday and they moved up to 101 bid, 101½ offered in initial trading.

Petrobras mixed

Petrobras Global Finance, a Rotterdam, Netherlands-based subsidiary of Rio de Janeiro-based oil and gas giant Petrobras (Petroleo Brasileiro SA), saw its notes mixed to end the week.

The 5.999% notes due 2028 were active but level at around 94¾ bid with about $35 million of the bonds on the tape.

The 7 3/8% notes due 2027 dropped about 1 point to close at 104¾ bid with about $28 million of the bonds trading.

Teva off

Israel-based pharmaceutical producer Teva’s 3.15% senior notes due 2026 ended the week trending negatively.

The notes lost about 1½ points to close at 83 bid.

That more than unwound the previous session’s gains. On Thursday the notes had gained ½ point.

Intelsat up

Luxembourg-based satellite communications company Intelsat notes rose. The Federal Communications Commission is considering a rule change that would allow mobile providers to use airwaves used by traditional broadcasters and managed by satellite firms, potentially opening up a new revenue stream for satellite companies.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 picked up about 1¼ points to close at 95 bid. The 8 1/8% notes due 2023 gained about ½ point to close at around 86¼ bid.

On Thursday, the 7¾% notes shaved off about ¼ point and the 8 1/8% notes rose about ¼ point.

Indexes mixed

The KDP High Yield Daily index lost 3 basis points to close at 70.33 on Friday with the yield at 5.91%.

The index spent the week trading gains and losses of 2 bps, losing 2 bps on Thursday, falling on Wednesday and picking up on Tuesday.

The Merrill Lynch High Yield index trended positive for the sixteenth day in a row. The index was up 5 bps with the year to date return at 1.032%. The index entered the black on July 6.

The CDX High Yield 30 index was down 5 bps on Friday to close at 107.14. The index was up 10.1 bps on Thursday and lost 9.5 bps on Wednesday.

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