Ball, Northern Oil and Gas drive-by; Heartland Dental flat; Catalent tumbles; DISH under pressure

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 8 – An active Monday in the new issue market saw a $1.5 billion face amount of issuance come in drive-bys from two familiar issuers.

Ball Corp. priced a $1 billion issue of six-year senior notes (Ba1/BB+) at par to yield 6%, in the middle of talk in the 6% area. Initial talk was heard to have tightened to the high-5% area from the 6¼% area.

Demand for Ball Corp.’s new 6% notes due June 2029 was around deal size, a trader said.

Also Northern Oil and Gas, Inc. priced an upsized $500 million issue (from $450 million) of 8¾% eight-year senior notes (B2/B+) at 98.568 to yield 9%, at the tight ends of coupon talk and yield talk, and in line with price talk.

Both of those new issues were trading near their issue prices late Monday afternoon, according to a trader who added that trading in the Northern Oil and Gas 8¾% notes due 2031 was active.

An active deal calendar bearing upon the days ahead includes Calderys Financing, LLC with a $550 million offering of five-year senior secured notes (B2), in the market with early guidance in the high-10% to 11% area, and expected to price Tuesday.

And Aventiv Technologies LLC is shopping a $400 million offering of four-year first-lien senior secured notes (B3/B).

Meanwhile, it was a quiet day in the secondary space with the market either side of unchanged as indecision again weighed on the market.

Few were making moves on Monday as market players eyed Wednesday’s release of the Consumer Price Index report and ongoing debt-limit negotiations in Washington.

New paper and earnings-related news were the drivers of trading activity on Monday.

Heartland Dental, LLC/Heartland Dental Finance Corp.’s 10½% senior secured notes due 2028 (B2/B-) saw a lackluster reception in the secondary space with the notes trading flat despite a chunky coupon.

Catalent Pharma Solutions, Inc.’s senior notes were the largest losers of Monday’s session with the notes dropping 3 to 6 points after it delayed its earnings release and downwardly revised its guidance.

DISH Network Corp.’s senior notes were also under pressure in heavy volume as market players question the company’s ability to address its looming maturities.

Heartland flat

Heartland Dental’s 10½% senior secured notes due 2028 fell flat in the aftermarket with the notes seeing little price movement since breaking for trade.

The 10½% notes traded in a tight range between 99 7/8 and par 1/8 on Monday, a source said.

There was $11 million in reported volume.

Heartland Dental priced an upsized $535 million, from $500 million, issue of the 10½% notes at par on Friday.

Pricing came in the middle of yield talk in the 10½% area.

Catalent takes a hit

Catalent’s senior notes were the largest losers of Monday’s session with its curve off 3 to 6 points in heavy volume.

Catalent’s 3 1/8% senior notes due 2029 (B1/BB-) sank 5½ points to close the day at 80 1/8, according to a market source.

The yield was 7 3/8%.

There was $17 million in reported volume.

Catalent’s 5% senior notes due 2027 were also off 5½ points to close the day at 90 7/8 with the yield 7½%.

Catalent’s 3½% senior notes due 2030 fell 3 3/8 points to close the day at 82 with the yield 6 7/8%.

There was $15 million in reported volume.

The drug manufacturer’s senior notes were taking a hit after it delayed the release of earnings and downwardly revised its revenue guidance by $400 million.

Catalent has been in the cross-hairs since mid-April when it announced productivity issues at three of its sites would impact earnings.

The company also announced the departure of its chief financial officer.

DISH under pressure

DISH’s senior notes were under pressure in heavy volume on Monday with earnings doing little to alleviate the market’s concern regarding the credit.

DISH’s soon-to-mature 5 7/8% senior notes due Nov. 15, 2024 (B3/B-) sank 1 point to close the day at 80½, a source said.

The yield rose to 21 5/8%.

There was $37 million in reported volume.

DISH’s 7 ¾% senior notes due 2026 (B3/B-) sank 1 3/8 points to close the day at 51 3/8.

The yield rose to 34 1/8%.

There was $19 million in reported volume.

The 7 3/8% senior notes due 2028 (B3/B-) fell 1 point to close the day at 44 with the yield 29%.

There was $14 million in reported volume.

DISH’s earnings did little alleviate investor concern about the satellite broadcaster whose capital structure has suffered substantial losses since a late February ransomware attack caused weeks-long service outages.

The attack was expected to result in a loss of subscribers and impact the company’s revenue.

DISH reported losing 552,000 subscribers in the first quarter versus the 357,000 expected.

Revenue was $3.96 billion versus the $4.06 billion expected.

The market is concerned about DISH’s ability to refinance its 2024 maturities, a source said.

Fund flows

High-yield ETFs saw big daily cash inflows of $781 million on Friday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds were negative on the day, sustaining $191 million of outflows on Friday, the source said.

Indexes

The KDP High Yield Daily index fell 10 points to close Monday at 50.69 with the yield 7.28%.

The index posted a cumulative decline of 119 points on the week last week.

The ICE BofAML US High Yield index fell 7.9 basis points with the year-to-date return now 4.188%.

The index posted a cumulative decline of 41.66 bps on the week last week.

The CDX High Yield 30 index was off 9 bps to close Monday at 100.21.

The index posted a cumulative decline of 108 bps on the week last week.

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