Williams Scotsman active; Hi-Crush struggles continue; Hanesbrands drops; Intelsat gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., Aug. 1 – August, traditionally a slow month in the new issue market, got off to a rolling start on Wednesday with much of the news flowing out of Europe.

Spain's WiZink priced a €515 million issue of five-year senior secured PIK toggle notes (expected ratings B+/BB-) at par with a cash coupon and yield of 6½%.

Nexans SA priced an upsized €325 million issue of five-year senior bullet notes (S&P: expected BB) at par to yield 3¾%.

While the European market saw the only deals to price on Wednesday, Intelsat Connect Finance SA joined the forward calendar with plans to price $1 billion of five-year senior notes on Thursday.

Intelsat’s junk bonds were active in the secondary space with some seeing as much as a 2 point gain after the company announced the refinancing deal.

Three smaller deals from FS Energy, LLC, Ken Garff Automotive Group, PGT Innovations, Inc. are also slated to price before the week draws to a close.

BMC Software's highly anticipated dual-currency offering of $1,825,000,000 equivalent eight-year senior notes (Caa2/CCC+) is also in the market with pricing expected during the Aug. 6 week.

While no deals priced in the domestic primary market on Wednesday, new paper from Williams Scotsman International Inc. remained active in the secondary space although with little movement in price.

Hi-Crush Partners LP’s newly priced 9½% senior notes due 2026 (B3/B-) continued to struggle in the secondary space with the notes now trading 1 point below their issue price.

Hanesbrands Inc.’s junk bonds were also losing ground after the company announced alongside earnings that its 15-year contract with Target for the C9 Champion brand would not be renewed.

WiZink PIK toggles price

Spain's WiZink priced a €515 million issue of five-year senior secured PIK toggle notes (expected ratings B+/BB-) at par.

The cash coupon and yield are 6½%, the wide end of the 6¼% to 6½% yield talk. The coupon steps up 75 basis points to 7¼% for PIK payments.

Joint physical bookrunner Goldman Sachs will bill and deliver.

Proceeds will be used by Varde Partners Inc. to finance stock purchases related to its acquisition of the remaining 49% stake in WiZink, a Madrid-based digital bank that specializes in revolving credit in Spain and Portugal.

Oversubscribed Nexans upsized and tight

Nexans priced an upsized €325 million issue of five-year senior bullet notes (S&P: expected BB) at par to yield 3¾%.

The issue size increased from €300 million.

The yield printed at the tight end of the 3¾% to 3 7/8% price talk.

The deal played to €900 million of orders at final talk, a sellside source said.

Joint bookrunner Credit Agricole will bill and deliver. BNP Paribas and SG CIB were 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.

Intelsat $1 billion pricing Thursday

Intelsat plans to price $1 billion of senior notes due February 2023 on Thursday afternoon.

The debt refinancing deal is set to be marketed by means of an investor conference call scheduled to get underway at 11:30 a.m. ET on Thursday.

Credit Suisse is the left bookrunner. Goldman Sachs is the joint bookrunner.

Intelsat is one of two deals sized at or above the $1 billion market currently on the active calendar.

The other is BMC Software's $1,825,000,000 equivalent of eight-year senior notes (Caa2/CCC+) in dollars and euros with the split to be determined.

As the market awaits guidance on the euro-denominated tranche, early talk on the dollar tranche is 9¾%, a trader said on Tuesday.

The deal is set to price during the Aug. 6 week.

Before the week is through

Nearer at hand are three smaller dollar-denominated deals expected to price before the coming weekend.

FS Energy is marketing $500 million of five-year senior secured notes (Ba3/BB-) with initial price talk in the 8% area, according to a trader who expects it to price Thursday.

Ken Garff Automotive Group is in the market with $350 million of five-year senior notes (B1/B) whispered at 7¼% to 7½% and set to price during the Thursday-Friday timeframe.

And PGT Innovations, Inc. is marketing $315 million of eight-year senior notes due (B3/B) on a roadshow scheduled to wrap up Thursday.

The deal, in the market via left bookrunner SunTrust, is whispered in the 7% area, and is also expected to price in the Thursday-Friday timeframe.

Intelsat active

Intelsat’s junk bonds were active in the secondary space with some seeing large gains after the company announced its $1 billion refinancing deal.

Intelsat’s 8 1/8% senior notes due 2023 were among the most active in the secondary space with the notes seeing a 2 point gain, a market source said.

The notes were seen trading up to 87½ after closing Tuesday at 85½.

Williams Scotsman active

New paper from Williams Scotsman was active in the secondary space although the notes “really didn’t move too much,” a market source said.

The newly priced 6 7/8% notes due 2023 were quoted at par bid, 101 offered and were seen trading at par 3/8 in the late afternoon.

The majority of trades were in the par to par ½ context, a market source said.

The notes were off slightly from Tuesday’s close but have not seen much movement in terms of price since hitting the secondary space, the source said.

Williams Scotsman priced a $300 million issue of five-year senior secured notes (B2/B) at par to yield 6 7/8%.

The yield printed 12.5 basis points beneath the tight end of the 7% to 7¼% price talk and well inside of initial talk in the 7¼% to 7½% area.

Hi-Crush struggle continues

Hi-Crush’s recently priced 9½% notes due 2026 continued to lose ground on Wednesday. The notes were seen trading down about ½ point to 99, according to a market source.

They were quoted at 98½ bid, 99 offered on Wednesday. On Tuesday, the notes were quoted at 99¼ bid, 99 5/8 offered, a market source said.

Hi-Crush priced a $450 million offering of the 9½% senior notes at par on July 27. The notes have struggled since hitting the secondary space with the notes lagging their issue price.

The poor performance of the notes despite their high coupon is an indication there may be some issues with the credit, sources said.

Hanesbrands drops

Hanesbrands junk bonds were losing ground on Wednesday after the company announced alongside its second-quarter earnings report that one of its contracts with Target was coming to an end.

The clothing company’s 4 7/8% senior notes due 2026 were down 1 to 1½ points on Wednesday to trade at 95 5/8.

Hanesbrands reported mixed second-quarter earnings on Wednesday with earnings per share falling 1 cent shy but revenues surpassing analysts’ expectations.

However, alongside earnings the company announced its contract with Target to distribute the C9 Champion brand would not be renewed when the contract expires in 2020.

Mixed Tuesday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Tuesday, the most recent session for which data was available at press time, a trader said.

High yield ETFs saw $21 million of inflows on the day.

However actively managed funds sustained $65 million of outflows on Tuesday, the trader said.

Indexes mixed

Three benchmarks for the high-yield secondary market were mixed on Wednesday after all posted gains on Tuesday.

The KDP High Yield Daily index was up slightly. The index closed Wednesday at 70.54, a 1 basis point increase, with the yield now 5.83%. The index was up 9 bps on Tuesday and 11 bps on Monday.

The Merrill Lynch High Yield index continued its upward momentum on Wednesday. The index was up 2.5 bps with the year-to-date return now 1.219%.

The index was up 10.9 bps on Tuesday and 5.3 bps on Monday.

The CDX High Yield 30 was down 5 bps to close Wednesday at 106.99. The index was up 12 bps on Tuesday after a 22 bps drop on Monday.

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