Energy XXI, Peabody bring offerings; Fortescue ‘extremely active’; funds gain $309 million

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., March 5 – Three issuers came to the high-yield primary market with a single tranche each on Thursday for a combined $2.95 billion of proceeds.

Two of the deals were greater than $1 billion in size and priced at a discount to par.

Energy XXI Gulf Coast, Inc. upsized its 11% five-year senior secured second-lien notes to $1.45 billion. The notes priced to yield 12%.

Peabody Energy Corp. brought $1 billion of 10% seven-year senior secured second-lien notes to yield 10½%.

Finally, RSI Home Products, Inc. priced a $575 million issue of eight-year second-lien senior secured notes to yield 6½%.

Capital Product Partners LP talked its $260 million offering of seven-year first-priority ship mortgage notes (B2/BB-) to price at a discount and yield 8% to 8¼%.

The secondary high-yield bond market remained focused on names that were bringing new deals in Thursday trading.

However, as a snowstorm hit New York and most of the Northeast, a trader said that afternoon trading was “muted.”

“It’s pretty snowy here,” he said.

But in secondary dealings, Peabody Energy’s and Energy XXI’s older bonds were getting a boost.

Fortescue Metals Group was also trending toward the positive side after the iron producer announced a tender offer for three series of notes.

But despite the gains in those names and in recently priced deals, the market as a whole was seen ending with a mixed tone.

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