Organon, Century Aluminum on tap; Ingram Micro at a premium; Weight Watchers, Certera flat

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 5 – Activity in the domestic high-yield primary market was muted on Monday with European markets closed for Easter Monday.

While no deals priced on Monday, the forward calendar ballooned with Organon joining with a $4.5 billion equivalent three-tranche offering and Century Aluminum announcing a $250 million offering of seven-year secured notes.

Meanwhile, it was a strong day in the secondary space although volume was light.

Ingram Micro Inc.’s 4¾% senior secured notes due 2029 (B1/BB-) were trading with a healthy premium in the aftermarket.

However, WW International, Inc.’s 4½% senior secured notes due 2029 (Ba3/BB-) and Cetera Financial Group’s 7½% senior notes due 2029 (Caa2/CCC) fell flat.

Meanwhile, outside of recent issues, PetSmart LLC’s 7¾% senior notes due 2029 (Caa1/CCC+) continued to grind higher in active trading, solidifying their ranks as the best performing deal of the year.

Monday’s primary

Easter Monday saw the European new issue market on holiday. Activity in the U.S. primary market was muted.

However, the new issue calendar ballooned with the addition of a $4.5 billion equivalent three-part deal from Organon, which comprises entities being spun off from Merck & Co., Inc.

The deal includes $2 billion seven-year senior secured notes (Ba2/BB) with initial talk in the low 4% area, $1 billion equivalent euro-denominated seven-year senior secured notes (Ba2/BB) with initial talk in the low 3% area, and $1.5 billion 10-year senior unsecured notes (B1/BB-) with initial talk in the mid-to-high 5% area.

The megadeal roadshows through the middle part of the week and is set to price Thursday.

Century Aluminum also announced a $250 million offering of seven-year secured notes, which are being guided in the high 7% area.

They join Michaels Cos., which announced a $2.3 billion two-part deal backing the buyout of the company by Apollo last week. That deal roadshows through Thursday.

Ingram Micro at premium

Ingram Micro’s 4¾% senior notes due 2029 were putting in a strong performance in the aftermarket with the notes gaining momentum as the session progressed.

The 4¾% notes were changing hands at par ¾ in the mid-afternoon.

They rose to a 101-handle as the session progressed and were marked at 101 3/8 heading into the close.

The notes were active on a low volume day with $23 million in reported volume.

Ingram Micro priced a $2 billion issue of the 4¾% notes at par on Friday.

The yield printed in the middle of yield talk in the 4¾% area.

Flat

While Ingram Micro’s senior notes were putting in a strong performance, Weight Watchers 4½% senior secured notes due 2029 and Cetera’s 7½% senior notes due 2029 fell flat.

Weight Watchers 4½% senior notes were wrapped around par throughout Monday’s session.

There was about $23 million in reported volume.

Weight Watchers priced a $500 million issue of the 4½% notes at par on Friday.

The yield printed in the middle of yield talk in the 4½% area.

Certera’s 7½% senior notes due 2029 were also wrapped around par on Monday although volume in the name was light.

Certera priced a $400 million issue of the 7½% notes at par on Friday.

The yield printed tighter than yield talk in the 7¾% area.

PetSmart climbs

PetSmart’s 7¾% senior notes due 2029 were grinding higher in active trading on Monday, solidifying their rank as the best performing deal of the year.

The 7¾% notes rose more than 1 point. They were marked at 109¾ heading into the market close.

There was more than $11 million in reported volume.

The specialty pet retailer plans to release its fourth quarter and year-end earnings report on Wednesday.

$997 million Thursday inflows

The dedicated high-yield bond funds saw $997 million of net daily inflows last Thursday, according to a market source.

High-yield ETFs saw $787 million of inflows on the day.

Actively managed high-yield funds saw $210 million of inflows on Thursday, the source said.

There were no daily high-yield fund flow reports for Good Friday, according to the market source.

The combined funds saw a total of $5.4 billion of net outflows for the month of March, which followed $3 billion in February and $1.6 billion is January.

Hence year-to-date net outflows from the dedicated junk funds stood at $10 billion at Thursday's close, according to the market source.

Indexes gain

Indexes launched the week on strong footing.

The KDP High Yield Daily index rose 8 points to close Monday at 69.37 with the yield now 4.07%.

The CDX High Yield 30 index rose 15 bps to close Monday at 109.5.

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