Jefferies, Jefferson price $1.3 billion; Air Canada in focus; Acrisure weak; Penn Virginia soft

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 28 – A pair of high yield issuers priced single-tranche dollar-denominated deals to raise a combined total of $1.3 billion on Wednesday.

Both deals priced at the conclusions of brief roadshows.

Both came at par, in the middle of talk.

Jefferies Finance LLC and JFIN Co-Issuer Corp. priced a $1 billion issue of 5% seven-year senior notes (B1/BB-/BB+) and Jefferson Capital Holdings LLC priced $300 million of 6% five-year senior notes (Ba3//BB-).

Meantime dealers set the table for an active Thursday session.

Venture Global Calcasieu Pass LLC, a unit of Venture Global LNG, Inc., set price talk in its $1.5 billion two-part offering of senior secured bullet notes on Wednesday.

The deal includes a tranche of eight-year notes talked in the 4% area, well inside of initial guidance in the 4½% area, and a tranche of 10-year notes is talked to yield 25 basis points behind the eight-year notes, on top of initial guidance.

Venture Global’s offer is heard to be mostly done in reverse inquiry, and is set to price Thursday, sources say.

Also Allen Media LLC and Allen Media Co-Issuer Inc. are expected to price an upsized $350 million add-on to their 10½% senior notes due Feb. 15, 2028 (existing ratings Caa1/B-).

The deal is increased by $10 million from $340 million.

Along with the upsizing came a substantial increase in the discount talk. Revised talk has the deal coming at 98.5, versus earlier official talk of par to 101.

Pricing on the tap widened dramatically since the deal came into the market, a trader said on Wednesday, adding that initial price discussions were in the context of 103.

Meanwhile, the secondary space was flat on Wednesday with the Federal Reserve’s announcement regarding its monetary policy a non-event, sources said.

While Federal Reserve Chairman Jerome Powell intimated that the Federal Reserve would begin to taper its bond buying program later in the year, the announcement was widely anticipated and did little to move markets.

New paper continued to dominate the tape.

Air Canada’s 3 7/8% senior secured notes due 2026 (Ba2/BB-/BB) were in focus. While the notes were trading at a premium to their issue price, they remained on a par-handle.

Acrisure LLC and Acrisure Finance Inc.’s 6% senior notes due 2029 (Caa2/CCC+) came in slightly during Wednesday’s session.

Penn Virginia Corp.’s 9¼% senior notes due 2026 (B/B) were soft in the aftermarket with the notes lagging their discounted issue price.

Carnival Corp.’s 4% first-priority senior secured notes due 2028 (Ba2/BB-) continued to lose steam with the notes dropping below par in active trading on Wednesday.

Tuesday fund flows

The cash flows of dedicated high-yield bond funds were flat to slightly negative on Tuesday, with the flows of both reporting cohorts essentially cancelling each other out, according to a market source.

High yield ETFs sustained $58 million of outflows on the day.

Air Canada in focus

In secondary trading, Air Canada’s new 3 7/8% notes were busy on Wednesday.

While the notes were trading above their issue price they were still at a par handle.

The 3 7/8% notes were marked at par ¼ bid, par ½ offered heading into the market close, a source said.

There was more than $120 million in reported volume.

Air Canada priced an upsized $1.2 billion, from $1 billion, tranche of the 3 7/8% notes at par on Tuesday as part of a dual-currency deal.

The notes priced tighter than the 4% to 4¼% yield talk.

The deal also included an upsized C$2 billion, from C$1.5 billion, tranche of 4 5/8% notes due 2029, which also priced at par.

Acrisure weakens

Acrisure’s 6% notes were weaker on Wednesday, giving back much of the gains reached after breaking for trade.

The 6% notes were wrapped around their issue price heading into the market close.

They were marked at 99¾ bid, par ¼ offered, a source said.

The notes closed the previous session at par 1/8 bid, par 3/8 offered.

While the notes came in slightly on Wednesday, volume in the name was light.

Acrisure priced a $500 million issue of the 6% notes at par on Tuesday.

Pricing came at the wide end of yield talk set in the 5 7/8% area.

Penn Virginia soft

Penn Virginia’s 9¼% notes were soft in the aftermarket with the notes at times lagging their discounted issue price.

The notes were seen at 98¾ bid, 99 offered heading into Wednesday’s close, a source said.

There was about $19 million in reported volume.

The oil and gas company priced a $400 million issue of the 9¼% notes at 99.018 to yield 9½% on Tuesday.

The coupon came at the wide end of the 9% to 9¼% coupon talk and the yield printed at the wide end of the 9¼% to 9½% yield talk.

Carnival below par

Carnival’s 4% first-priority senior secured notes due 2028 dropped under par in active trading on Wednesday.

The notes were changing hands in the 99 5/8 to 99 7/8 context heading into the market close.

The issue was once more active with about $47 million on the tape, according to a market source.

Still, the paper continued to weaken after shaving off about 3/8 point in the market weakness on Tuesday.

Prior to Tuesday’s session, the notes, which priced at par, largely traded in the par 3/8 to par 5/8 context.

Indexes mixed

The KDP High Yield Daily index rose 2 bps to close Wednesday at 70.20 with the yield now 3.68%.

The index lost 3 bps on Tuesday after gaining 3 bps on Monday.

The CDX High Yield 30 index rose 8 bps to close Wednesday at 109.43.

The index dropped 28 bps on Tuesday and 12 bps on Monday.

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