MidCap prices; forward calendar grows; At Home weakens; Kantar holds premium

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 28 – The domestic high-yield primary market saw one deal price during Monday’s session.

However, the several more joined the forward calendar.

MidCap Financial priced a $400 million issue of long eight-year notes in a Monday drive-by.

Vivint Smart Home Inc., Elastic NV, and Everi Holdings announced new offerings.

SoftBank also mandated banks ahead of a contemplated benchmark offering of senior notes.

Meanwhile, it was a quiet day in the secondary space with the market continuing to grind sideways as credit spreads remain near all-time tights.

New and recent deals continued to dominate the tape although with little movement in price.

Kantar Summer Bidco B LLC’s 5½% senior secured notes due 2026 (B2/B-) remained active with the notes holding onto the large premium reached after breaking for trade.

However, Ambience Merger Sub, Inc.’s (At Home Group Inc.) unsecured tranche was coming in from the heights reached in its initial days in the aftermarket.

Monday’s primary

MidCap Financial came with Monday's sole deal, a $400 million issue of 5 5/8% senior notes due January 2030 (B1/B+/BB) that priced at par in a drive-by, at the tight end of talk.

There was a heavy amount of reverse inquiry in the deal, which was heard to be playing to around $1.8 billion of orders at noon ET on Monday, a trader said.

There was a modest build-up in the forward calendar of business expected to price ahead of Friday's recommended early close in the bond market, leading into the extended Independence Day weekend, in the United States.

Vivint Smart Home began a roadshow for a $900 million offering of APX Group, Inc. eight-year senior notes, in the market with initial guidance in the low 6% area.

Elastic started a roadshow for a $500 million offering of eight-year senior notes, with initial guidance in the high-4% to 5% area.

And Everi Holdings announced a $400 million offering of eight-year senior notes set to kick off on an 11 a.m. ET on Tuesday investor call. Initial guidance is 5¼% to 5½%,

The Everi deal is going pretty well, according to a trader who added that the hedge funds are looking at it, and the offer is heard to be well spoken for at guidance.

Also, SoftBank mandated banks ahead of a contemplated benchmark offering of senior notes (S&P: BB+) in dollar- and euro-denominated tranches with maturities ranging from three years to 12 years.

Aside from that burst of announcements the June-July crossover week is expected to generate a light-to-moderate volume of new issue business in the U.S. high-yield primary market, as many participants plan to take Friday off, in order to turn Independence Day weekend into a four-day summer respite.

Meanwhile there was a buildout of the European high yield new issue calendar on Monday (see related stories in this issue).

Kantar on a 101-handle

Kantar’s 5½% senior secured notes due 2026 remained active on Monday with the notes holding onto their large premium.

The 5½% notes continued to trade in the 101 5/8 to 101 7/8 context – a level reached shortly after they broke for trade.

There were more than $28 million of the bonds on the tape.

Kantar priced an upsized $425 million, from $400 million, issue of the 5½% notes at par last Friday.

The yield printed at the tight end of the 5½% to 5¾% yield talk.

At Home weakens

At Home’s 7 1/8% senior notes due 2029 (Caa1/CCC+) continued to trend lower after an initially strong reception in the aftermarket.

The 7 1/8% notes dropped about 5/8 point in high-volume activity.

The notes were unchanged at the start of Monday’s session and continued to trade in the 101 to 101 ½ context.

However, the notes came in as the session progressed.

They dropped to a par-handle and were changing hands in the par ½ to par ¾ context heading into the market close.

There was more than $35 million in reported volume.

$183 million Friday inflows

The dedicated high-yield bond funds saw $183 million of net inflows on Friday, the most recent session for which data was available at press time, according to market sources.

High-yield ETFs saw $208 million of inflows on the day.

However actively managed high-yield funds sustained redemptions on Friday, posting $25 million of outflows on the day, the source said.

Indexes mixed

Indexes were mixed on Monday.

The KDP High Yield Daily index rose 4 points to close the day at 3.76%.

The index posted a cumulative gain of 8 points on the week last week.

The ICE BofAML US High Yield index rose 9 bps with the year-to-date return now 4.92%.

The index posted a cumulative gain of 40.8 bps on the week.

The CDX High Yield 30 index dropped 17 bps to close Monday at 110.23.

The index gained 77 bps on the week last week.

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