Eldorado on tap; Bausch Health weakens; Charter below par; Weatherford, Teva down

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 13 – With stock markets in a sea of red amid headlines of an escalating trade war, the high-yield new issue market took a header on Monday.

However, a couple of deals took spots on a thin active calendar.

Eldorado Gold Corp. plans to begin a roadshow on Tuesday for a $300 million offering of five-year senior secured second lien notes (Caa1/B).

GasLog Ltd. plans to price a $75 million tack-on to its 8 7/8% senior bullet notes due March 22, 2022 on Tuesday.

The deals join VistaJet Malta Finance plc and Ausdrill Finance Pty Ltd. on the forward calendar.

Meanwhile, the secondary space was soft on Monday, especially heading into the market close with the escalation in trade war tensions rattling markets.

Several recent deals to hit the secondary market were weaker on Monday.

Bausch Health Cos Inc.’s recently priced tranches (B3/B-/B) continued to weaken.

Charter Communications, Inc.’s 5 3/8% senior notes due 2029 (BB/BB+) dropped below their issue price.

Outside of the new paper, Weatherford International plc’s junk bonds continued their downward spiral following the company’s bankruptcy and restructuring support agreement announcement.

Teva Pharmaceutical Industries Ltd.’s junk bonds also shaved off several points after the company was named in a lawsuit alleging that it had engaged in price fixing.

Eldorado Gold roadshow

Eldorado Gold plans to begin a roadshow on Tuesday for a $300 million offering of five-year senior secured second lien notes (Caa1/B).

Initial talk has the deal coming to yield in the high 8% to 9% area.

An investor meeting in New York and an investor conference call are scheduled to get underway at 12:30 p.m. ET on Tuesday.

The roadshow wraps up on Friday.

BofA Merrill Lynch is the left bookrunner for the debt refinancing deal.

GasLog tack-on

In the interim, GasLog plans to price a $75 million tack-on to its 8 7/8% senior bullet notes due March 22, 2022 on Tuesday.

The deal was scheduled to be shopped on a Monday conference.

Credit Suisse is the left lead bookrunner.

The Monaco-based owner, operator and manager of LNG carriers plans to use the proceeds for general corporate purposes.

GasLog and Eldorado Gold take places aboard a thin active calendar.

VistaJet Malta Finance is in the market with a $525 million offering of five-year senior notes (B3).

A roadshow was held for the deal last week.

As the market awaits official talk the whisper on VistaJet's debt refinancing deal is in the 9% area.

And Australia-based Ausdrill Finance Pty marketed a $500 million offering of seven-year senior notes (Ba2/BB) last week.

Initial talk on that debt refinancing deal is in the high 6% area.

Bausch trades down

Bausch Health’s recently priced tranches continued to trade down amid volatile market conditions.

The 7% senior notes due 2028 and 7¼% senior notes due 2029 were both seen at 99¾ bid, par offered on Monday, a market source said.

The notes were trading around par ½ on Friday afternoon.

Bausch priced a $750 million tranche of the 7% notes and a $750 million tranche of the 7¼% notes at par on May 9.

Charter lags

Charter Communications’ 5 3/8% notes due 2029 were lagging their issue price on Monday.

After hovering around par on Friday, the notes sank below it in active trading on Monday.

The 5 3/8% notes were seen at 99 3/8 bid, 99 7/8 offered and stood poised to close the day at 99 7/8, sources said.

Century Communities priced an upsized $500 million issue of the 6¾% notes at par on May 9.

Weatherford restructures

Weatherford’s junk bonds were in focus after the company announced a restructuring support agreement with a majority of its unsecured noteholders as part of its planned prepackaged bankruptcy filing.

Weatherford’s junk bonds were trading in a range of 58 to 63 on Monday.

The 5 1/8% senior notes due 2020 stood poised to close Monday at 59. Prior to the bankruptcy announcement late Friday, the notes were changing hands at 69¾.

The 8¼% senior notes due 2023 traded down to 61½ on Monday.

Weatherford announced in its quarterly report on Friday that it would file for Chapter 11 bankruptcy.

The company also announced a restructuring support agreement it had reached with the majority of holders of its unsecured debt.

Holders of Weatherford’s unsecured debt will get mostly new equity in the company and a small amount of a new bond, a source said.

Teva trades down

Teva’s senior notes were trading down in high-volume activity on Monday after the company was named as a central player in a lawsuit alleging it had engaged in price-fixing.

Teva’s notes were down 2½ to 3 points, a market source said.

Its 6¾% senior notes due 2028 stood poised to close Monday at 98¾ bid, 99¼ offered, about a 2½ point drop from its previous levels, a source said.

Teva was named as a primary player in a lawsuit brought by 44 states that was led by Connecticut.

The suit alleges that Teva and 19 other generic drug companies divided up the generic drug market to avoid competition and fix prices.

Friday outflows

The daily cash flows of the dedicated high-yield bond funds were slightly negative on Friday, the most recent session for which data was available at press time, a trader said.

Highyield ETFs sustained $67 million of outflows on the day.

Actively managed high-yield funds saw $10 million of outflows on Friday, the source said.

Retail cash flows remain strongly positive for 2019.

At Friday's close the combined high-yield funds had seen $14.5 billion of year-to-date inflows.

That compares to $8.1 billion of net inflows in the year 2018 to the May 10 close, the trader said.

Indexes

Indexes were soft at the start of the week after all posted cumulative losses last week.

The KDP High Yield Daily index dropped 10 basis points to close Monday at 69.98 with the yield now 5.81%.

The index saw a cumulative loss of 31 bps on the week last week.

The ICE BofAML US High Yield index sank below 8% returns on Monday.

The index 42.4 bps on Monday with the year-to-date return now 7.884%.

The index saw a cumulative decline of 58.5 bps on the week last week.

The index had a meteoric rise in 2019, shooting past 8% returns in early April.

The CDX High Yield 30 index sank 102 bps to close Monday at 105.98.

The index was down 68 bps on the week last week.

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