Junk closes week with a bang, prices $4.75 billion; Ardagh in focus on debt talks

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 22 – Primary market news flow remained strong and steady on Friday, with four dollar-denominated tranches from three issuers – a total face amount of $4.75 billion – clearing the market.

Meanwhile, the secondary space had a soft close to a relatively strong week with the market pulling back after firming in the aftermath of the Federal Open Market Committee’s announcement.

The cash bond market was unchanged to off about 1/8 point on Friday while still logging weekly gains.

With the primary pipeline packed on Friday, activity in the secondary space was light as market players awaited the new paper to break for trade.

Ryman Hospitality Properties, Inc.’s recently priced 6½% senior notes due 2032 (B1/BB-/BB-) were trading with a decent premium to their issue price in heavy volume on Friday, despite a soft day for the market.

The fire-sale in Altice SA’s capital structure tempered on Friday with tranches mixed after the double-digit losses of the previous two sessions.

Ardagh Group SA’s senior notes remained in focus and were also mixed after dropping the previous session as the company and its creditors prepare for debt talks.

Friday’s $4.75 billion

In Friday’s active session, Panther Escrow Issuer, LLC and Panther Co-Issuer, Inc. upsized an issue of seven-year senior secured notes (B2/B/B+) to $3 billion from $2.75 billion, and priced the deal at par, in the middle of talk.

It came to market in order to finance the buyout of TIH, LLC (formerly known as Truist Insurance Holdings LLC) by Stone Point Capital and Clayton, Dubilier & Rice.

Elsewhere Hilton Worldwide Holdings Inc. priced $1 billion of senior notes (Ba2/BB+) in two drive-by tranches: $550 million of 5 7/8% five-year notes and $450 million of 6 1/8% seven-year notes.

Both trances came at par, in the middle of talk.

And Bombardier Inc. priced an upsized $750 million issue of 7¼% seven-year senior notes (B2/B) at 99.75 to yield 7.287% in a drive-by.

The issue size increased from $500 million, and the yield printed inside of talk.

A modicum of new issue business appeared headed to market in the week ahead.

Dye & Durham Ltd. is expected to show up with a $500 million offering of secured notes as part of a capital structure refinancing, a sellside source said. A concurrent term loan was launched to lenders during the past week.

In the euro-denominated market Milan-based Evoca SpA announced plans to price a $550 million offering of five-year senior secured floating-rate notes (B3/B-/B-) in the week ahead.

And BNP Paribas flashed a save-the-date memo for a high-yield deal from the technology, media, and telecom sector, with a global investor call scheduled at 9 a.m. U.K. time, on Monday.

Ryman at a premium

Ryman’s recently priced 6½% senior notes due 2032 were trading at a decent premium in heavy volume on Friday despite a soft day for the market.

The 6½% notes were early marked at par bid, par ½ offered and were trading in the par ¼ to par 3/8 context heading into the market close, a source said.

There was $108 million in reported volume.

Ryman priced an upsized $1 billion, from $800 million, issue of the 6½% notes at par in a Thursday drive-by.

Pricing came in the middle of the 6 3/8% to 6 5/8% price talk.

Altice mixed

The fire sale in Altice’s capital structure seemed to subside on Friday with tranches leveling off after double-digit losses over the past two sessions.

Altice France’s 10½% senior notes due 2027 (Caa2/CCC) were largely unchanged in heavy volume with the notes again wrapped around 38 with a yield of 53% heading into the market close, according to a market source.

There was $56 million in reported volume.

The 6% senior notes due 2028 were off another 2 to 3 points to trade at 28¾ in the late afternoon with the yield about 48%.

There was $28 million in reported volume.

Altice France’s 5½% senior secured notes due 2029 (B2/B-) had a nominal rebound with the notes up 3 points.

They were trading at 72 with the yield 12 5/8% in the late afternoon, according to a market source.

There was $24 million in reported volume.

Altice France sparked a fire sale in Altice’s capital structure after reporting earnings on Wednesday and warning creditors that they may need to participate in discounted transactions to reduce leverage.

Altice France’s unsecured notes were the hardest hit with the 10½% notes falling more than 30 points since Wednesday.

However, the selling pressure spread throughout the multinational telecom with Altice USA, Inc. and subsidiary CSC Holdings, LLC’s senior notes dragged down as well.

Creditors have hired advisers ahead of debt talks with the company, a source said.

Ardagh in focus

Ardagh’s senior notes remained in focus on Friday after dropping the previous session as creditors also prepare for debt talks with the heavily leveraged packaging firm.

Ardagh Packaging Finance plc’s 4 1/8% senior secured notes due 2026 (B1/B+) rebounded 1½ points after a 6 point drop the previous session.

They were trading at 87 with the yield 10 3/8% heading into the market close, according to a market source.

There was $23 million in reported volume.

Ardagh’s 5¼% senior notes due 2027 (Caa1/CCC+) also pared losses from a 10 point drop the previous session.

The notes were up 1 point to trade at 57½ in the late afternoon with the yield 24 3/8%.

There was $17 million in reported volume.

Ardagh dropped on Thursday as creditors and the company tapped advisers in preparation for debt talks, a source said.

Indexes

The KDP High Yield Daily index slid 1 basis point to close Friday at 50.82 with the yield now 6.8%.

The index gained 12 bps on Thursday, 3 bps on Wednesday, 12 bps on Tuesday and 1 bp on Monday.

The index posted a cumulative gain of 27 bps on the week.

The ICE BofAML US High Yield index added 7.2 bps with the year-to-date return now 1.421%.

The index added 19.3 bps on Thursday, 7.4 bps on Wednesday, 19.5 bps on Tuesday and 10.2 bps on Monday.

The index logged a weekly gain of 63.7 bps.

The CDX High Yield 30 index was off 28 bps to close Friday at 107.07.

The index gained 14 bps on Thursday, 35 bps on Wednesday, 21 bps on Tuesday and 13 bps on Monday.

The index posted a cumulative gain of 55 bps on the week.

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