Landsea joins junk bond calendar; Aston Martin, Vital Energy improve; Hertz lower

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 18 – Landsea Homes Corp. caught the attention of the U.S. junk bond market with a two-day roadshow that started Monday.

Meanwhile, it was a quiet but firm day in the junk bond secondary space with the market cautiously optimistic ahead of Wednesday’s Federal Open Market Committee announcement, a source said.

The cash bond market added about 1/8 point.

However, trading volume was thin with many on the sidelines until the Fed announcement.

New and recent issues remained active with some improving with Monday’s firmer tone.

Vital Energy Inc.’s 7 7/8% senior notes due 2032 (B2/B) continued their upward momentum with the notes now trading on a 101-handle.

Aston Martin Capital Holdings Ltd.’s 10% senior secured notes due 2029 (B3/B-/B) also continued to rise with the notes breaking above a 101-handle.

Outside of new and recent issues, topical news drove some outstanding issues into the spotlight.

PGT Innovations, Inc.’s 4 3/8% senior notes due 2029 (B1/B+) were slightly stronger as the company’s shareholders voted to approve the company’s acquisition by Miter.

Hertz Corp.’s 5% senior notes due 2029 (Caa1/B+) were lower after the resignation of the company’s chief executive officer.

Primary

No issues priced during Monday’s session in the high-yield bond primary market.

However, the news volume was steady.

In the dollar-denominated market Landsea Homes set a Monday-Tuesday roadshow for a $300 million offering of five-year senior notes (B/B). Initial talk is in the low-to-mid 9% area.

Apart from that announced business there is a shadow calendar, a trader said.

Medline Industries, LP waits in the wings with $1 billion of senior secured notes, in a deal expected to launch later this week, the source said.

Meantime, trailing the sterling-denominated market’s biggest week in three years, euro-denominated new issue offers took center stage on Monday, as three issuers set off on brief roadshows, each of which have their deals expected to price in the midweek period.

Progroup AG is shopping a €750 million two-part offering of senior secured notes: five-year notes with initial guidance in the mid-5% area, and seven-year notes with initial guidance in the high-5% area.

Elsewhere FNAC Darty SA kicked off a €500 million offering of five-year senior notes (BB+/BB+) with initial guidance in the high-6% area.

And CBR Fashion Group plans to sell €470 million of CT Investment GmbH six-year senior secured notes (B2/B), in the market with 6¾% to 7% initial talk.

Upward momentum

Several recent deals continued their upward momentum on Monday on a firm day for the market.

Vital Energy’s 7 7/8% senior notes due 2032 added another ½ point with the notes now firmly trading on a 101-handle.

The notes were trading in the 101¼ to 101½ context heading into the market close, a source said.

There was $14 million in reported volume.

Vital priced an $800 million issue of the 7 7/8% notes at par on March 14.

Aston Martin’s 10% senior secured notes due 2029 gained 3/8 to ½ point with the notes trading in the 101 5/8 to 102 context throughout the session, a source said.

The luxury car manufacturer priced a $950 million tranche of the 10% notes at par on March 13.

PGT Innovations firms

PGT Innovations’ 4 3/8% senior notes due 2029 were among the top-traded issues in the secondary space on Monday with the notes firmer as shareholders voted to approve the company’s acquisition by Miter.

The 4 3/8% notes added ¼ to 3/8 points in active trade.

They were wrapped around 101 5/8 heading into the close, a source said.

There was $17 million in reported volume.

The notes were active as PGT held its extraordinary shareholder meeting to vote on the company’s acquisition by Miter, a source said.

In mid-January, PGT announced that it had accepted Miter’s buyout bid for $42 per share with an enterprise value of $3.1 billion.

PGT had been the subject of a bidding war with PGT previously announcing a merger agreement with Masonite, which it terminated in favor of Miter’s buyout proposal.

The deal is expected to close midyear.

Hertz lower

Hertz’s 5% senior notes due 2029 were lower in active trade after news the company’s chief executive officer was departing after two years on the job.

The 5% notes were off ¾ to 1 point.

They were trading in the 76½ to 77 context heading into the market close, a source said.

There was $12 million in reported volume.

The notes had some selling pressure as the market responded to recent news the company’s CEO was stepping down after trouble with the company’s EV program, a source said.

Hertz had engaged in the EV fervor and added a fleet of EV vehicles to its lineup.

However, the rental car company took a hit to its bottom-line with losses from the EVs that were sold in the fourth quarter.

Hertz announced that it was selling about one-third of its EV fleet in January.

Indexes

The KDP High Yield Daily index inched up 1 basis point to close Monday at 50.56 with the yield now 6.96%.

The index posted a weekly loss of 34 bps last week.

The ICE BofAML US High Yield index added 10.2 bps with the year-to-date return now 0.881%.

The index was down 27.6 bps on the week last week.

The CDX High Yield 30 index added 13 bps to close Monday at 106.65.

The index was down 21 bps on the week last week.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.