Avantor, TripAdvisor price; Diebold, Rattler Midstream on tap; Charter flat; Delta active

By Abigail W. Adams

Portland, Me., July 7 – The high-yield primary market was active on Tuesday with two drive-by deals pricing and several more joining the forward calendar.

Avantor Funding Inc. priced an upsized dual-currency offering of eight-year senior notes (B3/B-/BB) and TripAdvisor Inc. priced a $500 million offering of five-year senior notes (B1/BB-).

The forward calendar also grew with Diebold Nixdorf, Inc. in the market with a dual-currency offering of five-year senior secured notes (B3/B-) and Rattler Midstream LP marketing a split-rated $500 million offering of five-year senior notes (BBB-/BB+).

In a strictly euro-denominated offering, Parts Europe SA also began marketing a €300 million offering of five-year senior secured notes (expected Caa1/B-).

Meanwhile, the secondary space saw another volatile session with the market higher in the morning but weak heading into the close as equities gave back their gains from Monday’s session.

“It was a morning versus afternoon day,” a source said.

Charter Communications Inc.’s newly priced 4¼% senior notes due 2031 (B1/BB) were among the most actively traded issues of the session. However, the notes fell flat.

Delta Air Lines Inc.’s recently priced 7 3/8% senior notes due 2026 (Baa3/BB/BB+) continued to struggle below their issue price in active trading.

Avantor’s drive-by

Avantor priced a dual-currency offering of eight-year senior notes in a Tuesday drive-by.

The deal included an upsized $1.55 billion tranche, which priced at par to yield 4 5/8%.

Pricing came tighter than talk for a yield of 4¾% to 5% and well inside of initial guidance for a yield of 5% to 5¼%.

The tranche was upsized from $1 billion.

The deal also included a €400 million tranche, which priced at par to yield 3 7/8%.

The euro-denominated tranche priced on the tight end of talk for a yield in the 4% area.

The dollar-denominated tranche was putting in a strong performance in the secondary space despite upsizing and pricing tight, a source said.

The notes were marked at par ½ bid, 101 offered in the late afternoon.

There was more than $26 million in reported volume heading into the market close.

TripAdvisor oversubscribed

TripAdvisor priced $500 million five-year senior notes at par to yield 7% in a Tuesday drive-by, according to a market source.

Pricing came tighter than talk for a yield in the 7½% area.

The deal played to heavy demand during bookbuilding and was heard to be as much as 5x oversubscribed, a source said.

The Needham, Mass.-based online travel platform did a non-deal roadshow about two weeks ago and the senior notes offering was driven to the market by a substantial amount of reverse inquiry, the source said.

The company is “a great credit,” the source said. “It’s net cash positive and has significant free cash flow.”

TripAdvisor is well suited for a comeback as the travel industry recovers.

The calendar

The active forward calendar grew on Tuesday with a split-rated dollar-denominated offering, a dual-currency offering, and a euro-denominated offering hopping on board.

Rattler Midstream started a roadshow on Tuesday for a $500 million offering of five-year senior notes that will run through Thursday with pricing expected thereafter.

Early whispers have the deal coming with a yield in the 6% area, a source said.

Diebold is in the market with a dual-currency offering of five-year senior secured notes expected to price on Thursday.

The deal includes a $690 million tranche that is talked in the 10% area and a €350 million tranche that is talked in the low 9% area.

And Parts Europe began a roadshow for a €300 million offering of five-year senior secured notes that will run through Thursday.

Charter flat

Charter’s newly priced 4¼% senior notes due 2031 fell flat in the aftermarket.

The notes were marked at par bid, par 1/8 offered early in the session but slipped to 99 7/8 bid, par 1/8 offered heading into the market close, a source said.

With more than $90 million on the tape in the late afternoon, the 4¼% notes were among the most actively traded issues during Tuesday’s session.

The notes priced tight leaving them nowhere to go in the secondary space, sources said.

Charter is a well-known name in capital markets and their deals tend to price to perfection.

“With them, you know what you’re getting,” a source said. “They’re not going to give much of a concession.”

Charter priced a $1.5 billion issue of the 4¼% senior notes at par in a Monday drive-by.

Pricing came at the midpoint of talk for a yield in the 4¼% area. Initial guidance was for a yield in the 4 3/8% area.

Delta struggles

Delta’s 7 3/8% senior notes due 2026 continued to struggle below their issue price in high-volume activity on Tuesday.

While there appeared to be efforts to support the notes with the notes trading as high as par, they closed the day down 1 point at 97½, sources said.

The notes were active with more than $20 million in reported volume during Tuesday’s session.

The 7 3/8% notes have been volatile in secondary trading, reaching as high as 104 and trading as low as 96½ as investors waver between optimism over an economic recovery and concern over a resurgence of Covid-19 cases.

The 7 3/8% notes traded down to a 96-handle in the final week of June and have been struggling to rebound since, according to Trace data.

Delta priced a $1.25 billion issue of the 7 3/8% notes at 99.986 on June 10.

Indexes mixed

Indexes were mixed on Tuesday after launching the week on firm footing.

The KDP High Yield Daily index gained 12 basis points to close Tuesday at 65.44 with the yield now 6.49%.

The index was up 26 bps on Monday.

The ICE BofAML US High Yield index gained 4.9 bps with the year-to-date return now negative 3.459%.

The index was up 50.1 bps on Monday.

The CDX High Yield 30 index dropped 89 bps to close Tuesday at 99.6. The index gained 57 bps on Monday.

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