SNF Floerger, Tutor Perini, Endo, Tennant price; Toys ‘R’ Us jumps; recent Barminco, Ultra mixed; Endo rebounds

By Colin Hanner and Paul A. Harris

Chicago, April 12 – Four high-yield issuers priced $1.6 billion of new notes on Wednesday while activity in the secondary market was sparse, traders said, although there was noteworthy volume behind recent new issues and Toys ‘R’ Us, Inc. after the toy retailer announced its fourth quarter earnings.

SNF Floerger Group, a subsidiary of SPCM SA, priced an upsized $500 million issue, Tutor Perini Corp. priced a $500 million issue, Endo International plc priced a downsized $300 million issue and Tennant Co. priced a $300 million issue.

In the secondary market, Toys ‘R’ Us was the largest gainer with volume on the session as its fourth quarter results came in mixed.

Recent issues Barminco Finance Pty Ltd. and Ultra Petroleum Corp. were both down marginally, though Cedar Fair LP was unchanged.

Endo International rebounded in the secondary market after dropping by a round number on Tuesday’s session. Valeant Pharmaceuticals International Inc. trailed with a fractional loss.

Several one-off names traded with a small number of printed issues, traders said, speaking to the activity dying down in markets as the shortened week comes to a close.

“Activity is even lesser today” compared to Tuesday, a trader said.

“It seems like the Easter holiday is well underway,” another trader said.

SNF Floerger upsized and tight

On Wednesday SNF Floerger Group, a subsidiary of SPCM SA, priced an upsized $500 million issue of senior notes due Sept. 15, 2025 (Ba2/BB+) at par to yield 4 7/8%.

The issue size was increased from $450 million.

The yield printed at the tight end of the 4 7/8% to 5% yield talk.

Joint physical bookrunner BofA Merrill Lynch will bill and deliver. BNP Paribas was also a joint physical bookrunner.

The Andrezieux, France-based producer of polyacrylamide plans to use the proceeds to refinance its 6% senior notes due 2022.

Tutor Perini prices tight

Tutor Perini Corp. priced a $500 million issue of eight-year senior notes (B1/BB-/BB-) at par to yield 6 7/8% on Wednesday, according to a syndicate source.

The yield printed at the tight end of yield talk in the 7% area.

Goldman Sachs & Co. is the left bookrunner. SunTrust Robinson Humphrey Inc., BMO Securities, KeyBanc Capital Markets and Credit Suisse Securities (USA) LLC are the joint bookrunners.

The Sylmar, Calif.-based civil and building construction company plans to use the proceeds, together with borrowings under a new revolving credit facility, to tender for and/or redeem any and all of its existing senior notes, and pay off its existing term loan and revolving credit facility.

Endo downsized and tight

Endo International plc priced a downsized $300 million issue of senior secured notes due Oct. 15, 2024 (Ba2/BB) at par to yield 5 7/8% on Wednesday, according to a syndicate source.

The issue size was decreased from $750 million with the shift of $450 million of proceeds to the term loan, increasing it to $3.415 million from $2.965 million.

The yield printed at the tight end of yield talk in the 6% area.

Citigroup Global Markets was the left bookrunner. J.P. Morgan Securities LLC, Barclays, BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley & Co. and RBC Capital Markets LLC were the joint bookrunners.

The Dublin, Ireland-based specialty pharmaceutical company plans to use the proceeds to refinance debt and for general corporate purposes.

Tennant at the tight end

Tennant Co. priced a $300 million issue of eight-year senior notes (B2/BB) at par to yield 5 5/8% on Wednesday, according to a syndicate source.

The yield printed at the tight end of yield talk in the 5¾% area.

Goldman Sachs & Co. was the left bookrunner. J.P. Morgan Securities LLC was the joint bookrunner.

The Minneapolis-based company plans to use the proceeds to refinance a term loan used in financing its acquisition of IP Cleaning SpA.

Tennant designs, manufactures and markets cleaning and resurfacing products and technologies.

Air Methods talks 7½% to 7¾%

Air Methods Corp. talked its $560 million offering of eight-year senior notes (Caa1/CCC+) to yield 7½% to 7¾%, according to an informed source.

Formal talk comes on top of initial guidance.

Books were scheduled to close on Wednesday, except for accounts on the West Coast of the United States for whom timing is extended to 10 a.m. ET Thursday.

The Rule 144A and Regulation S for life notes are set to price thereafter.

Morgan Stanley & Co. LLC, RBC Capital Markets, Barclays, Jefferies LLC and Citigroup Global Markets Inc. are managing the sale.

The notes come with three years of call protection.

The issuing entity will be ASP AMC Merger Sub, Inc., which is to be merged with and into Air Methods Corp.

Proceeds will be used to help fund the buyout of the Englewood, Colo.-based provider of air medical transportation and air tourism by American Securities LLC.

Colfax eight-year deal

In the European market Colfax Corp. priced a €350 million issue of eight-year senior notes at par to yield 3¼% on Wednesday, according to a market source.

Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC were the joint global coordinators in a syndicate of banks that also includes BofA Merrill Lynch, HSBC Securities, Morgan Stanley & Co. LLC and RBC Capital Markets.

The Fulton, Md.-based manufacturer of gas- and fluid-handling and fabrication technology products plans to use the proceeds to repay $301.7 million under its revolving credit facility and certain of its bilateral credit agreements, and for general corporate purposes.

Toys R Us rallies

After falling ½ point on Tuesday, Toys ‘R’ Us’ 12% notes due 2021 were up 2½ points to 89½, a trader said. Another trader said the notes were up 3 points to an 89-zip code.

The toy giant released fourth quarter and year-end results on Wednesday.

Notably, the consolidated adjusted EBITDA was down $8 million to $792 million for the entire year, and operating earnings were $460 million, an increase of $88 million from a year prior.

"The widely recognized tough retail environment this holiday and continued weakness in the entertainment and baby categories contributed to the erosion of our top-line and an overall disappointing year,” said Dave Brandon, chief executive officer of the company.

Recent issues fall

Hazelmere, Western Australia-based international mining contractor Barminco’s 6 5/8% notes due 2022 were down ¼ point to par, a trader said.

The company priced the upsized $350 million issue on Tuesday.

And Ultra Petroleum’s 6 7/8% notes due 2022 were down a similar ¼ point to 101¼. A market source quoted the notes with a 100¾ bid, 101¼ offer.

Ultra’s 7 1/8% notes due 2025 were quoted with a 99 3/8 bid, 99¾ offer, down 5/8 point on the day.

Cedar Fair’s 5 3/8% notes due 2027 were unchanged with a 101½ bid, 102 offer, a market source said.

Health care mixed as Endo gains

As Endo’s offering of $750 million of secured notes was downsized in the primary market, its 6% notes due 2023 rebounded on Wednesday, up 1½ points to 87¾, a trader said.

Fellow pharmaceutical company Valeant Pharmaceuticals International’s 6 3/8% notes due 2020 were down ¼ point to 86½.

Dallas-based health care service provider Tenet Healthcare Corp.’s 6¾% notes due 2023 were down ¼ point to 97.

And, seeing just one print was Quorum Health Corp.’s 11 5/8% notes due 2023, which were up 1/8 point to 85 7/8.

Rental cars tick higher

Avis Budget Group Inc.’s 6 3/8% notes due 2024 were up ¾ point to 99.

And Hertz Global Holdings, Inc.’s 6¼% notes due 2022 were up ¾ point to 90, though volume was very light, a trader said.

High-yield wrap-up

Irvine, Calif.-based computer data storage company Western Digital Corp.’s 10½% notes due 2024 were unchanged at 117½.

Supermarket chain Fresh Market Inc.’s 9¾% notes due 2023 were up ½ point to 81.

Charter Communications’ 5 1/8% notes due 2027 were down ½ point to 97¾.

And Cleveland, Ohio-based iron ore mining company Cliffs Natural Resources Inc.’s 5¾% notes due 2025 were down 1¼ to 93¾.

Indices trek lower

The KDP High Yield Daily index was down 1 basis point to 72.02 on Wednesday, its second-straight day of losses. On Tuesday, it was down 1 bp to 72.03.

Monday, it was up 3 basis points to 72.04, and edged higher by 1 bp on Friday.

Its yield was unchanged at 5.23% on Wednesday after two-straight days of 1-bp gains.

The Markit CDX Series 28 index was lower for the fourth-consecutive session on Wednesday, down just below 1/5 point on the day, similar to Tuesday’s 1/5-point narrowing.

Friday had brought a similar narrowing, and, on Thursday, it had gained around 1/8 point on the day.

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