Oxford prices; wild ride in junk secondary; VistaJet, CHS drop par; Fertitta down

By Paul A. Harris and Abigail W. Adams

Portland, Me., Jan. 24 – In the face of phenomenal stock market volatility, seven issuers stepped forward on Monday with junk-rated, dollar-denominated deals.

Oxford Finance LLC’s $400 million issue of five-year senior notes (Ba3/B/BB-) was the sole deal to clear the market on Monday while the forward calendar grew to $5.75 billion with a megadeal backing the buyout of athenahealth on deck.

Meanwhile, volatility continued to roil the secondary space on Monday with the market down as much as ¾ point in intraday activity only to close the day flat to down 1/8, sources said.

“It was a wild ride,” a source said.

While the high-yield market has been soft in January, it continues to hold up well compared to equity markets.

However, several new issues that were performing well despite heavy market conditions last week fell on Monday.

VistaJet’s 6 3/8% senior notes due 2030 (Caa1/B-/BB-) gave back nominal gains and closed Monday below their issue price.

CHS/Community Health Systems, Inc.’s 5¼% senior secured notes due 2030 (B2/B/BB-) also dropped below par in intraday activity.

Fertitta Entertainment, LLC’s recently priced 6¾% senior notes due 2030 (Caa2/CCC+) continued to move lower in active trading with the notes dropping to a 98-handle.

Monday’s primary

Of the seven issuers that showed up on Monday, one deal cleared as a drive-by, on accelerated timing.

Oxford Finance priced a $400 million issue of five-year 6 3/8% senior notes at par, at the tight end of talk.

Prior to the accelerated timing the deal had been expected to remain in the market until Tuesday.

At 3 p.m. ET the deal was two-times oversubscribed, according to a trader who added that reverse inquiry was also a factor.

Meantime the active new issue calendar built to $5.75 billion, all of it expected to price before the end of the week.

Among the highlights, athenahealth began a roadshow for a $2.5 billion single-tranche deal.

Minerva Merger Sub, Inc. plans to market $2.5 billion of eight-year senior notes (Caa2/CCC/CCC+) backing the buyout of athenahealth through Wednesday.

Initial guidance is in the low-to-mid 6% area.

And one deal announced Monday has at least one foot firmly planted in the emerging markets sector.

ERO Copper Corp., which is headquartered in British Columbia but has 100% of its operations in Brazil, started a roadshow for a $400 million offering of eight-year senior notes (B1/B/B), in the market with initial guidance in the low-to-mid 6% area.

The deal is expected to garner its audience from among both the emerging markets and high-yield accounts, a trader said.

Below par

VistaJet’s 6 3/8% senior notes due 2030 and CHS’s 5¼% senior secured notes due 2030 dropped below their issue prices on Monday as volatility continued to roil the market.

VistaJet’s 6 3/8% senior notes due 2030 traded in a range of 99 5/8 to par ¼ during Monday’s session.

They were changing hands in the 99 5/8 to 99 7/8 context heading into the market close, a source said.

There was about $61 million in reported volume during the session.

The 6 3/8% notes were holding at par ¼ bid, par ½ offered heading into last Friday’s close.

CHS’s 5¼% senior secured notes due 2030 also sank below par in intraday activity.

The 5¼% notes traded as low as 99 3/8, a source said.

However, they were bid up as selling pressure lightened and were changing hands in the 99 5/8 to par context heading into the close.

There was $38 million in reported volume.

The 5¼% notes also fell below par, to 99 5/8 bid on Friday, but were bid up and closed last week flat.

Fertitta on a 98-handle

Fertitta’s (Golden Nugget) 6¾% senior notes due 2030 (Caa2/CCC+) continued a downward trajectory in active trading on Monday.

The 6¾% notes dropped to a 98-handle and were trading at 98 3/8 heading into the close, according to a market source.

There was $18 million in reported volume.

The notes have struggled below par since the hospitality and gaming company priced the $1 billion tranche at par on Jan. 18.

Modest Friday outflows

The dedicated high-yield bond funds sustained a relatively modest $95 million of net outflows on Friday, the most recent session for which data was available at press time.

High-yield ETFs saw $80 million of outflows on the day.

Actively managed high-yield funds saw $15 million of outflows on Friday, the source said.

Indexes

The KDP High Yield Daily index sank 29 points to close the day at 64.32 with the yield now 4.56%.

The index posted a cumulative loss of 60 points on the week last week.

After a steep intraday decline, the CDX High Yield 30 index staged a remarkable rebound and closed the day up 19 basis points at 107.52.

The index posted a cumulative loss of 105 bps on the week last week.

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