Six Flags, Perenti price; Vallourec, Empire add to gains; funds see $3.75 billion outflow

By Paul A. Harris and Abigail W. Adams

Portland, Me., April 18 – Two companies raised $1.2 billion in the dollar-denominated high-yield primary market on Thursday.

Six Flags Entertainment Corp. and Six Flags Theme Parks Inc. priced an $850 million issue of eight-year senior secured notes (Ba2/BB) at par to yield 6 5/8%, at the tight end talk.

It was heard to be playing to $2.3 billion of demand on Thursday morning, a trader said.

And Australia-based Perenti Finance Pty. Ltd. priced a $350 million issue of five-year senior notes (BB/BB+) at par to yield 7½%, on top of yield talk.

The deal, which ran a global roadshow including stops in Hong Kong and Singapore, was a blowout, according to a bond trader in New York who added that book size was heard to be in excess of $2 billion on Thursday morning.

The credit has a robust following among U.S. high-yield bond investors, the trader remarked.

Six Flags and Perenti cleared the active calendar of announced business ahead of the coming weekend.

One announced offer is presently on the high-yield road and is expected to price in the week ahead.

Brightline East LLC is running a full roadshow for a $1.25 billion offering of senior secured notes due Jan. 31, 2030. Initial guidance has the notes coming to yield 10% to 11%, sources said.

The Brightline book is “just over deal-size and is clubby,” a trader said.

A hard-charging euro-denominated primary market put up €1.45 billion in three tranches on Thursday.

Among the euro issuers was Miami-based cruise line Carnival Corp., which priced a €500 million issue of senior bullet notes due Jan. 15, 2030 (B3/BB-) at par to yield 5¾%, at the tight end of talk.

One euro deal remains to be transacted before the end of the week.

France-based engineering group Fives set initial guidance for its €425 million offering of Nova Alexandre III SAS five-year senior secured floating-rate notes (B3/B/B+) with a spread in the low-500 basis points area and an issue price in the 99 area, on Thursday.

The deal is expected to price Friday.

Meanwhile, it was a sideways day in the secondary space on Thursday with the cash bond market either side of unchanged as higher-for-longer rate concerns subsided, a source said.

New paper was back in focus after the stampede of issuance over the past two sessions. The deals to clear the primary market on Wednesday put in strong performances.

Jane Street Group, LLC and JSG Finance, Inc.’s 7 1/8% senior secured notes due 2031 (Ba2/BB/BB+) were unchanged day-over-day with the notes holding on to the nominal premium gained on the break.

However, Vallourec SA’s 7½% senior notes due 2032 (Ba2/BB+/BB+) and Empire Communities Corp.’s 9¾% senior notes due 2029 (B/B-) continued to add to the strong gains made on the break.

Tutor Perini Corp.’s 11 7/8 senior notes due 2029 (Caa1/CCC+) also continued to trade well above their discounted issue price.

However, volume was light with the notes largely tucked away.

Meanwhile, high-yield mutual funds and exchange-traded funds marked their largest outflow of the year so far with $3.75 billion leaving the space in the week through Wednesday’s close, a source said.

Jane Street flat

Jane Street’s 7 1/8% senior secured notes due 2031 were unchanged in active trade on Thursday with the notes holding the nominal premium gained on the break.

The 7 1/8% notes briefly traded up to par 5/8 early in the session.

However, they settled back into the par 1/8 to par 3/8 context, which is where they were trading heading into the market close, a source said.

There was $108 million in reported volume.

Jane Street priced an upsized $1.4 billion, from $1.25 billion, issue of the 7 1/8% notes in a Wednesday drive-by.

The yield printed in the middle of yield talk in the 7 1/8% area.

On the rise

Vallourec’s 7½% senior notes due 2032 and Empire Communities’ 9¾% senior notes due 2029 continued to add in active trade after strong breaks the previous session.

Vallourec’s 7½% notes added ½ point with the notes jumping to a 101-handle.

They were trading at 101¼ to 101¾ heading into the market close, a source said.

There was $49 million in reported volume.

Vallourec priced an $820 million issue of the 7½% notes at par on Wednesday.

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

The deal was heard to have played to $2 billion of demand, although some accounts walked away when pricing tightened past 7 5/8%.

Empire Communities’ 9¾% notes continued to outperform with the notes breaking above a 101-handle on Thursday.

The notes added ½ point to trade in the 101 7/8 to 102 1/8 context heading into the market close, a source said.

There was $16 million in reported volume.

Empire Communities priced a $475 million issue of the 9¾% notes at par in a Wednesday drive-by.

The yield printed at the tight end of the 9¾% to 10% yield talk.

Tucked away

Tutor Perini’s 11 7/8% senior notes due 2029 also continued to add on Thursday, although volume was light with the notes largely put away.

The 11 7/8% notes were up ¼ to 3/8 point to trade in the 98¾ to 99 context, a source said.

However, there was only $8 million on the tape heading into the market close.

Tutor Perini priced a $400 million issue of the 11 7/8% notes at 97.71 to yield 12½% on Wednesday.

The yield printed at the tight end of the 12½% to 12¾% yield talk.

Indexes

The KDP High Yield Daily index shaved off 7 bps to close Thursday at 49.25 with the yield now 7.4%.

The index added 9 bps on Wednesday after falling 21 bps on Tuesday and 20 bps on Monday.

The ICE BofAML US High Yield index was off 5 bps with year-to-date returns now negative 0.345%.

The index inched up 4 bps on Wednesday after falling 40.7 bps on Tuesday and 27.2 bps on Monday.

The CDX High Yield 30 index added 7 bps to close Thursday at 105.24.

The index shaved off 2 bps on Wednesday after dropping 17 bps on Tuesday and 59 bps on Monday.

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