Viasat prices at deep discount, outstanding notes gain; Worldpay off; Solenis below par

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 21 – On Thursday dealers offloaded $733.4 million of Viasat Inc. hung bridge debt, but the discount ended up being quite large.

Viasat priced the $733.4 million issue of 7½% senior notes due May 30, 2031 (Caa1/B/BB-) at 65 to yield 15.423%, on top of final yield talk, but around 140 basis points wide of initial guidance in the 14% area.

The bridge, put in place to support Viasat’s acquisition of Inmarsat, became hung up on dealer balance sheets in late 2022 due to market conditions.

Demand for the new Viasat paper was heard to be substantial, a sellside source said, adding that 62 accounts were in the deal, 17 of which “got zeroed.”

The new Viasat 7½% notes rocketed into the secondary market after pricing at 65. They were 68½ bid, 68¾ offered heading out the door late Thursday afternoon, well off the highs of the day, the source said.

Looking ahead, an unusually active September Friday session is in store for the dollar-denominated high-yield new issue market, sources said.

The active calendar contains $2.63 billion of offers from four issuers, each bringing a single tranche.

One deal was announced Thursday.

Adams Homes, Inc. expects to price a $250 million offering of senior notes due 2028 (B2/BB-/BB-) on Friday.

Initial talk is in the 9% area, according to a bond trader who noted that when the deal was announced as much as half of it was done in reverse inquiry.

The biggest of Friday’s offerings is from NCR Atleos Escrow Corp., and it has engendered a bit of investor pushback, the sellside source said.

The issuer shortened the duration of its $1.05 billion senior secured notes (B2/B+) to 5.5 years from seven years on Thursday. Call protection remains unchanged at three years.

The deal is talked to yield in the 9½% area, on top of initial guidance.

There is also conversation about the deal’s covenants, the sellsider said, but added that the order book is heard to be deal size.

Heavy day in secondary

Meanwhile, it was a heavy day in the secondary space as selling took hold in a delayed reaction to the Fed’s Wednesday announcement.

The higher-for-longer narrative spooked the market with cash bonds shedding 3/8 to ½ point.

“People are talking about recession again,” a source said. Refinancing risks were also on the mind.

While the broader market was heavy, new issues remained in focus with several recent deals holding on to their secondary market gains.

The successful pricing of hung debt from Viasat’s acquisition of Inmarsat lifted Viasat’s outstanding notes, which made large gains in active trade.

GTCR W-2 Merger Sub LLC’s 7½% senior secured notes due 2031 (Ba3/BB/BBB-) backing the buyout of Worldpay came in from the heights reached on a strong break.

However, the notes maintained a healthy premium in heavy volume.

Olympus Water US Holding Corp.’s (Solenis) 9¾% senior secured notes due 2028 (B3/B-) again dropped below par on Thursday after a nearly two-week uptrend that brought them to their highest level since pricing.

Viasat gains

Viasat’s 6½% senior notes due 2028 made large gains in heavy volume on Thursday following the successful completion of the sale of hung debt related to the company’s leveraged buyout of Inmarsat.

The 6½% notes jumped more than 2 points to close the day in the 74½ to 75 context, a source said.

The yield was about 14%.

There was $17 million in reported volume.

The successful placement of the new offering and its strong aftermarket performance were a boon to Viasat’s outstanding notes.

Worldpay gives back gains

Woldpay’s 7½% senior secured notes due 2031 were coming in from the heights reached after breaking for trade on a heavy day for the market.

However, the notes maintained a healthy premium in heavy volume.

The 7½% notes were off about ½ point to trade in a narrow range between par ¼ and par 5/8, a source said.

There was $125 million in reported volume.

The notes closed the previous session wrapped around 101.

GTCR priced a $2.18 billion tranche of the 7½% notes at par on Wednesday in a deal supporting GTCR’s acquisition of a 55% stake in Worldpay from Fidelity National Information Services Inc.

Pricing came at the tight end of 7½% to 7 5/8% price talk.

The deal also included a £600 million tranche of seven-year notes that priced at par to yield 8½%.

Solenis below par

Solenis’ 9¾% senior secured notes due 2028 dropped back below par on Thursday after a nearly two-week uptrend that brought the notes to their highest level since pricing.

The 9¾% notes sank 1¼ points in active trade.

They were changing hands in the 99½ to par context heading into the market close, a source said.

There was $18 million in reported volume.

Solenis’ notes have struggled since pricing at par in May with the notes trading between a 97- and a 99-handle for the majority of their life in the aftermarket.

However, the notes caught a bid over the last two weeks with the notes closing the previous session in the par ¾ to 101 context, their highest level since pricing, a source said.

Indexes

The KDP High Yield Daily index fell 32 bps to close Thursday at 49.77 with the yield 7.78%.

The index added 3 bps on Wednesday after falling 13 bps on Tuesday and 5 bps on Monday.

The ICE BofAML US High Yield index sank 59.9 bps with the year-to-date return now 6.339%.

The index gained 7.2 bps on Wednesday after falling 16.9 bps on Tuesday and 6.4 bps on Monday.

The CDX High Yield 30 index sank 51 points to close Thursday at 102.07.

The index was down 17 bps on Wednesday, 8 bps on Tuesday and 4 bps on Monday.

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