Cox Media, Korn Ferry, AmWINS add-on price; Staples mixed; Calpine, Charter active; Antero jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., Dec. 12 – The forward calendar cleared on Thursday with all dollar- and euro-denominated offerings in the market pricing.

Cox Media Group priced a downsized $1,015,000,000 issue of eight-year senior notes (Caa1/CCC+).

Korn Ferry priced a $400 million issue of eight-year senior notes (Ba3/BB).

AmWINS Group, Inc. priced a $250 million add-on to its 7¾% senior notes due July 1, 2026 (B3/B-).

In the European market, Berry Global Group Inc. priced an upsized €1,075,000,000 amount of split-rated first priority senior secured notes (Ba2/BBB-).

While new deal activity is expected to wind down in the final weeks of December, opportunistic issuers may still surface with some new offerings before all is said and down, sources said.

Meanwhile, the secondary space was firm on Thursday as headlines broke that a phase 1 trade agreement between the U.S. and China had been reached.

While the overall market was strong, several of the recent issues continued to trade flat, a market source said.

Calpine Corp.’s recently priced 4½% senior notes due 2029 (Ba2/BB) and Charter Communications Inc.’ 4¾% senior notes due March 1, 2030 (B1/BB/BB+) remained active in the secondary space, although with little movement in price.

Staples Inc.’s junk bonds continued to see high-volume activity with the unsecured 10¾% senior notes due 2027 continuing to trade off but the secured 7½% senior notes due 2026 bouncing back from their lows.

Antero Resources Corp.’ junk bonds were outperformers during Thursday’s session with the notes trading up several points.

The natural gas company recently announced a growth incentive fee program and asset sale program.

Calendar clears

A barrage of Thursday issuance cleared the active forward calendar, as valedictory tones regarding the 2019 primary market continued to creep into conversations with market sources.

However, an investor, on Thursday morning, and later in the day an investment banker said “Not so fast..,” as they pointed to improvements in the outlook for global trade and rocketing stock indexes.

The sources insisted that there is no reason why such an attractive market would not be open to opportunistic issuers with drive-by deals in the week ahead.

Among Thursday's deals, Cox Media Group priced a downsized $1,015,000,000 issue of eight-year senior notes at par to yield 8 7/8%.

The issue size decreased from $1,165,000,000, with an upsizing of $150 million on the concurrent term loan.

The migration of proceeds to the loan from the notes reflected the market's preference, a bond trader said, adding that while the bond books were playing to about $1.6 billion of demand on Thursday morning, books for the term loan were heard to contain orders of around $4 billion.

The yield printed in the middle of the 8¾% to 9% yield talk.

That talk widened from earlier guidance in the low 8% area.

Along with wider pricing, the market demanded and got covenant changes bearing upon the issuer's ability to disburse cash and incur additional debt, said the trader.

Elsewhere, Korn Ferry priced a $400 million issue of eight-year senior notes at par to yield 4 5/8%.

The deal, heard to be driven by $1.4 billion of demand, priced at the tight end of yield talk in the 4¾% area. Initial guidance was in the high 4% to 5% area.

And AmWINS Group priced a $250 million add-on to its 7¾% senior notes due July 1, 2026 at 104.5, with a 6.883% yield to maturity.

The issue price came at the rich end of the 104 to 104.5 price talk.

Oversubscribed books with orders amounting to four-times the size of the offer drove pricing well rich to earlier guidance of 103 to 104, an investor said.

In Europe, Berry Global Group priced an upsized €1,075,000,000 amount of split-rated first priority senior secured notes in two bullet tranches.

The deal included €700 million of five-year notes which priced at par to yield 1%. The yield printed at the tight end of the 1% to 1¼% guidance.

Berry also priced €375 million of seven-year notes at par to yield 1½%. The yield printed at the tight end of the 1½% to 1¾% guidance.

The overall amount of issuance increased from €900 million after having previously been increased from €725 million.

The Berry deal was also playing to big demand, sources said.

Active secondary

While Thursday was a strong day for the high-yield space, there was little price movement in several of the recent issues to hit the aftermarket, a source said.

Calpine’s recently priced 4½% senior notes due 2029 and Charter’s 4¾% senior notes due 2030 continued to see high-volume activity with both large, liquid issues.

However, they were trading largely sideways.

“They found their level,” a market source said.

Calpine’s 4½% senior notes were marked at par ½ bid, par ¾ offered and were seen trading into the bid of par ½ in the late afternoon, sources said.

They were unchanged from Wednesday.

The notes saw more than $31 million in reported volume during Thursday’s session.

Calpine priced an upsized $1.25 billion issue of the 4½% notes at par on Tuesday.

Charter’s 4¾% senior notes due 2030 continued to be actively traded in the secondary space.

The 4¾% notes were also flat at 101¾ bid, 102¼ offered. The notes saw more than $24 million in reported volume.

The notes have been major volume movers in the secondary space since Charter priced a $1.2 billion add-on at 101.125 on Dec. 2.

The add-on lifted the total principal amount of the 4¾% notes to $2.55 billion.

Staples mixed

Staples’ junk bonds were mixed in active trading on Thursday following a disappointing earnings report.

The office supplies retailer’s unsecured notes continued to trade down while the secured notes rebounded, a market source said.

Staples’ unsecured 10¾% senior notes due 2027 traded down 1½ to 2 points on Thursday after a 4-point drop on Wednesday.

The 10¾% notes were marked at 99 bid, 99½ offered and were seen changing hands at 99 3/8 in the late afternoon, sources said.

They remained among the most actively traded issue in the secondary space with more than $30 million in reported volume.

The 10¾% notes were trading at 105 on Monday, a source said.

While the unsecured notes continued their downward spiral, Staples’ secured notes were bouncing back from their lows.

The 7½% senior notes due 2026 were up about 2 points and were seen changing hands at 102 in the late afternoon, sources said.

The notes also dropped about 4 points on Wednesday. They were on a 104 handle at the start of the week.

Both the 10¾% notes and 7½% notes sold off on Wednesday following Staples earnings report, sources said.

Antero on the rise

Antero’s junk bonds were on the rise on Thursday.

The natural gas producer’s 5% senior notes due 2025 rose almost 6 points to 78 5/8 in active trading.

The notes saw about $10 million in reported volume during the session.

The 5 1/8% senior notes due 2022 rose 4½ points to 91½ with about $12 million in reported volume.

The 5 5/8% notes were up more than 4 points to 83 5/8, according to a market source.

Thursday was a strong day for the energy sector with crude oil and natural gas futures on the rise.

Antero also recently announced a growth incentive fee and asset sale program with affiliate Antero Midstream Corp. designed to help the corporations withstand low natural gas prices.

The asset sale program intends to raise $750 million to $1 billion in proceeds and will be completed in 2020, the company said in a press release.

Indexes gain

Indexes continued to gain on Thursday, which was a strong day for the overall market and for the energy sector.

The KDP High Yield Daily index gained 14 bps with the yield now 5.08%.

The index was up 4 bps on Wednesday, 4 bps on Tuesday and 10 bps on Monday.

The ICE BofAML US High Yield index blasted past 13% returns on Thursday. The index jumped 29.7 bps with the year-to-date return now 13.2%.

The index was up 13.8 bps on Wednesday, 13.9 bps on Tuesday and 9.7 bps on Monday.

The CDX High Yield 30 index gained another 21 bps to close Thursday at 108.87.

The index skyrocketed 114 bps on Wednesday.

The jump was due to Dean Foods being dropped from the index, a market source said.

The index was down 2 bps on Tuesday and 26 bps on Monday.

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