Canpack prices $800 million; Medline tranches cool in heavy supply; Altice pressured

By Paul A. Harris and Cristal Cody

Tupelo, Miss., Oct. 4 – Two issuers priced a total face amount of $900 million of new junk during a news-heavy Monday session in the primary market.

The lion's share came from Poland-based can manufacturer Canpack SA and its Canpack US LLC unit. Their $800 million issue of 3 7/8% eight-year senior notes (BB/BB) came at par.

French telecom Iliad Holdings SAS started a roadshow for a €3.6 billion equivalent four-part offering of secured notes.

Medline Industries, LP’s two tranches of senior notes priced last week continued to dominate the junk secondary space on Monday.

Medline’s 3 7/8% senior secured notes due 2029 (B1/B+/BB-) fell 3/8 point to trade under par on over $54 million of volume.

The company’s 5¼% senior notes due 2029 (Caa1/B-/B-) shed ¼ point over the day.

Altice France SA’s 5½% senior secured notes due 2029 (B2/B) also were under pressure during the session and remained below par.

Market action mostly slowed Monday as equities sank and junk energy bonds improved on the back of higher oil prices.

Brent crude futures for November deliveries climbed $1.98 to settle at $81.26 a barrel.

“It was quiet, down but quiet,” a source said. “Some guys are not doing much – they’re watching. The tech sector was softer, that drug down everything.”

Primary prices $900 million

Two issuers priced a total face amount of $900 million Monday session in the primary market.

Poland-based can manufacturer Canpack SA and its Canpack US LLC unit’s $800 million issue of 3 7/8% eight-year senior notes (BB/BB) came at par, at the wide end of talk.

The deal was heard to have been playing to $1.8 billon of demand at 1:30 p.m. on Monday, a trader said.

The bonds broke to par ¼ bid, the trader added.

An active forward calendar left shriveled by last week's $16 billion mass of junk issuance, ballooned back to $4.4 billion on Monday.

One full-fledged megadeal surfaced.

French telecom Iliad Holdings SAS started a roadshow for a €3.6 billion equivalent four-part offering of secured notes (expected ratings Ba3//BB).

The deal is set to feature five-year and seven-year maturities, both coming in dollar-denominated and euro-denominated tranches with indicative sizes of $500 million minimum and €500 million minimum, each.

The roadshow runs through Thursday.

The Tuesday session promises to be an active one.

On deck is Frontier Communications with a $1 billion offering of senior notes due 2030 (Caa2/CCC+), which rolled out on a Monday investor call.

Talk of 6% to 6¼% (versus early guidance in the 6¼% area) surfaced late Monday afternoon.

Modest Friday inflows

The dedicated high-yield bond funds saw $26 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 ETFs saw $21 million of inflows on the day.

Actively managed high-yield funds saw $5 million of inflows on Friday, the source said.

Medline softens

Medline’s 3 7/8% senior secured notes due 2029 (B1/B+/BB-) fell 3/8 point to trade under par at 99¾ bid on over $54 million of secondary action Monday, a source said.

The company’s 5¼% senior notes due 2029 (Caa1/B-/B-) declined ¼ point over the day but remained strong at 101 3/8 bid. Trades totaled $45 million.

Medline priced the notes at par on Thursday in the largest LBO financing deal since the global financial crisis.

The Northfield, Ill.-based health care company sold $4.5 billion of the 3 7/8% notes and $2.5 billion of the 5¼% notes.

The 3 7/8% notes priced at the tight end of the 3 7/8% to 4% yield talk, while the 5¼% notes priced at the tight end of the 5¼% to 5½% talk.

Altice notes lower

Altice France’s 5½% senior secured notes due 2029 (B2/B) were quoted Monday at the 98½ bid area, down nearly ¾ point, a source said.

The issue saw over $14 million of secondary supply Monday.

The Paris-based telecom priced $2 billion of the 5½% notes on Sept. 24 at par, in the middle of yield talk in the 5½% area.

Indexes soft

The iShares iBoxx High Yield Corporate Bond ETF fell 31 cents to close the day at $87.10.

The KDP High Yield Daily index ended at 69.90 with a yield of 3.73% versus 69.95 and a 3.69% yield on Friday.

The CDX High Yield 30 index declined to 109.12 from 109.32.

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