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Morning Commentary: Credit Acceptance joins high-yield forward calendar; Staples drops
By Abigail W. Adams
Portland, Me., March 4 – The March 4 week is expected to be an active one for the domestic high-yield primary market.
Initially six deals were heard to be in the works for the week, but the latest number of deals was heard to be four, a market source said.
Credit Acceptance Corp. started a roadshow on Monday for a $400 million offering of seven-year notes (existing Ba3/BB), which is whispered in the mid-to-high 6% area, according to market sources.
The roadshow will run through Tuesday with pricing expected on Wednesday.
Wells Fargo Securities LLC is the left bookrunner. Credit Suisse Securities (USA) LLC and BMO Capital Markets Inc. are joint bookrunners for the Rule 144A and Regulation S offering.
Johnson Controls is expected to bring $4.8 billion equivalent of bonds during the March 4 week, according to market sources.
The deal is expected to include $2.75 billion equivalent of secured notes in dollar and euro denominations and $2.05 billion of unsecured bonds.
The secured dollar-denominated tranche was heard to be coming in the 7% area, a market source said.
J.P. Morgan Securities LLC is expected to lead the dollar-denominated secured notes.
The unsecured notes were heard to be coming in the low 9% area. Credit Suisse is expected to lead the unsecured notes.
Frontier Communications Corp. and Digicel Group Ltd. may also surface with deals, sources said.
Meanwhile, the secondary space was opening the week strongly with equity markets up on apparent progress in trade talks.
However, Staples, Inc.’s 8½% senior notes due 2025 were trading down on news competitor Office Depot had formed a strategic collaboration with Alibaba.com.
The 8½% senior notes dropped 1¼ points to 97 on the news, a market source said.
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