BlueLinx prices; forward calendar grows; Sonic Automotive, Aggreko at a premium; At Home sinks

By Paul A. Harris and Abigail W. Adams

Portland, Me., Oct. 18 – The domestic high-yield primary market saw one issue price during Monday’s session with several others joining the forward calendar.

BlueLinx Holdings Inc. priced a $300 million issue of eight-year senior secured notes (B1/B+) at a discount.

Polynt-Reichhold is expected to price a €1.3 billion equivalent three-part offering of senior secured notes (B1/BB-) during Tuesday’s session.

And LABL, Inc. and LifeScan Global Corp. started roadshows for two-part offerings.

Meanwhile, the secondary space was largely unchanged on Monday with market players eyeing the 10-year Treasury yield and earnings for indications of the future direction of the market.

New and recent issues continued to dominate the tape with the majority trading at a premium to their issue price.

Albion HoldCo Ltd.’s (Aggreko plc) dollar-denominated tranches were putting in a solid performance with the secured notes outperforming their unsecured, higher-coupon counterpart.

Sonic Automotive, Inc.’s two tranches of senior notes (B1/BB-/BB) were in focus and trading on a par handle.

Outside of recent issues, Ambience Merger Sub, Inc.’s (At Home Group, Inc.) 7 1/8% senior notes due 2029 (Caa1/CCC+) were under pressure with the notes falling further below par.

Monday’s primary

BlueLinx Holdings was the sole issuer to complete a deal on Monday.

Making its debut as a high-yield bond issuer the Atlanta-based wholesale distributor of building products priced a $300 million issue of 6% eight-year senior secured notes (B1/B+) at 98.625 to yield 6.219%, 21.9 basis points wide of talk.

BlueLinx had been expected to price the notes last Friday, but was held in the market over the weekend, as the deal also underwent covenant changes.

There were developments regarding a chunky $4.6 billion active forward calendar.

On deck to price Tuesday is UK-based specialty chemicals producer Polynt-Reichhold with a €1.3 billion equivalent three-part offering of senior secured notes (B1/BB-).

The deal includes $750 million of five-year fixed-rate notes talked at 5½% to 5¾%, versus initial guidance in the high 5% area.

Demand for the dollar-denominated tranche grew on Monday, according to a bond trader who added that the word in the market had the dollar notes playing to as much as $2.1 billion of orders toward the middle of the afternoon.

Polynt's deal also includes €650 million of five-year notes in fixed-rate notes and floating-rate tranches.

There were also new deal announcements as the week got underway.

LABL, Inc. started a two-day roadshow for a $1.21 billion two-part offering backing the acquisitions of Multi-Color Corp. and Fort Dearborn Co. by Clayton Dubilier & Rice, LLC.

It features $750 million seven-year senior secured notes, initial talk 5½% to 5¾%, and $460 million of eight-year senior unsecured notes, initial talk 7¾% to 8%.

And LifeScan Global plans to run a full roadshow for an $800 million two-part offering of five-year senior secured notes (expected ratings B3/B).

The debt refinancing deal includes a tranche of fixed-rate notes with initial guidance in the high 6% to 7% area, and floating-rate notes with a 625 bps spread to Libor at 99 to 99.5.

Floating-rate dollar-denominated junk is comparatively scarce, often appearing when the financial conversation turns to inflation, the effects of which the floaters are structured to help mitigate, sources say.

Albion at a premium

Albion’s dollar-denominated tranches were putting in a solid performance in the secondary space with the company’s secured notes outperforming their unsecured counterpart.

Albion’s 6 1/8% senior secured notes due 2026 (B1/BB-/BB+) were changing hands in the par ½ to 101 context throughout Monday’s session, a source said.

There was more than $47 million in reported volume.

Albion’s 8¾% senior notes due 2027 (B3/B/BB-) traded as low as 99 ¾ during Monday’s session. However, the notes improved as the session progressed and they were changing hands in the par ½ to par 5/8 context heading into the close.

There was $30 million in reported volume.

Albion priced a $565 million tranche of the 6 1/8% senior notes and a $450 million tranche of the 8¾% notes at par on Friday as part of a three-tranche dual-currency offering backing the acquisition of Aggreko by I Squared Capital & TDR Capital.

The 6 1/8% notes priced at the wide end of yield talk in the 6% area; the 8¾% notes priced at the wide end of the 8½% to 8¾% yield talk.

Sonic in focus

Sonic Automotive’s two tranches of senior notes remained active on Monday with the notes trading at a premium to their issue price although they remained on a par-handle.

The 4 5/8% notes and 4 7/8% notes were roughly the same level in the secondary. Both tranches were changing hands in the par ¼ to par 7/8 context.

The automotive retailer priced a $650 million tranche of the 4 5/8% notes and a $500 million tranche of the 4 7/8% notes at par on Friday.

The 4 5/8% notes priced tight to yield talk in the 4¾% area; the 4 7/8% notes priced tight to yield talk in the 5% area.

At Home under pressure

Ambience Merger’s (At Home Group) 7 1/8% senior notes due 2029 were under pressure on Monday with the notes dropping further below par in high-volume activity.

The 7 1/8% notes were down 1½ points to close Monday’s session at 97¾, a source said.

There was more than $11 million in reported volume.

While the notes have largely traded around 101 since pricing in June, they have traded on a 99-handle since October, a source said.

The 7 1/8% notes priced at par in June as part of a two-tranche offering that also included a tranche of 4 7/8% senior secured notes (B1/B).

While the small, off-the-run tranche was not active on Monday, the notes have also been under pressure in October.

While they have largely traded on a par-handle since pricing, they have largely traded in the 99 3/8 to 99 5/8 context since last week.

$570 million Friday inflows

The dedicated high-yield bond funds saw $570 million of net daily inflows on Friday, the most recent session for which data was available at press time, according to a market source.

High yield saw $490 million of inflows on the day.

Actively managed high yield funds saw $80 million of inflows on Friday, the market source said.

Indexes

The KDP High Yield Daily index slid 2 points to close Monday at 69.43 with the yield now 3.84%.

The CDX High Yield 30 index slipped 5 bps to close Monday at 109.17.

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