Blue Yonder trades up; Fortress holds on to gains; Diamond Sports notes rally

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 24 – While the domestic high-yield primary market rounded out the week with one add-on pricing, the European primary was active with two issuers pricing three tranches.

Alight Solutions priced an upsized $250 million fungible add-on to the Tempo Acquisition LLC and Tempo Finance Corp. 6¾% senior notes due June 1, 2025 (existing senior unsecured ratings Caa1/CCC+).

In Europe, U.K. pub operator Stonegate priced two tranches of five-year senior secured notes (B3/B+) and Sweden-based Intrum AB priced an upsized €600 million issue of five-year senior notes (//BB).

Meanwhile, the secondary space was holding up relatively well despite the downturn in equities, a market source said.

While some names were softer, the overall market closed the day largely unchanged.

However, volume was light with many starting their weekend early.

Blue Yonder’s 4¼% senior secured notes due Jan. 31, 2026 (B1/B-) were in focus with the notes putting in a strong performance in the secondary space.

After a strong break, Fortress Transportation and Infrastructure Investors LLC’s 9¾% senior notes due 2027 (Ba3/B/BB-) held on to their gains in active trading.

Outside of recent issues, Sinclair Broadcast Group Inc.’s two tranches of senior notes issued by Diamond Sports Group LLC and Diamond Sports Finance Co. continued their rally on Friday following the renewal of a contract with Comcast.

Alight adds on

As the junk primary market continued to wend its way through an earnings blackout period there was a modest amount of activity on a late-July Friday.

Alight Solutions priced an upsized $250 million fungible add-on to the Tempo Acquisition LLC and Tempo Finance Corp. 6¾% senior notes due June 1, 2025 at 102.5 to yield 6.143% in drive-by.

The add-on size increased from $150 million.

The issue price came on top of price talk.

Europe’s primary

In Europe, U.K. pub operator Stonegate priced two tranches of five-year senior secured notes.

The deal included a £950 million tranche of fixed-rate notes which priced at par to yield 8¼%.

Pricing came at the wide end of the 8% to 8¼% yield talk.

It also featured a €300 million tranche of Euribor plus 575 basis points floating-rate notes which priced at 93, rendering a yield of around 7.48%.

The floating-rate notes came at the wide end of the 7¼% to 7½% yield talk.

And Sweden-based Intrum AB priced an upsized €600 million issue of five-year senior notes at par to yield 4 7/8%.

The issue size increased from €500 million.

The yield printed in the middle of yield talk in the 4 7/8% area.

The week ahead

The final week of July will get underway to a thin calendar.

Graham Packaging Co. Inc. is in the market with a $510 million offering of eight-year senior notes (Caa1/CCC+). Early guidance has the notes coming with a yield of 7½% to 7¾%.

The deal is expected to price on Wednesday.

Meanwhile, a pair of deals that had been expected to clear during the July 20 week have gone radio silent, sources said on Friday.

Diamond Resorts International Inc.'s $525 million offering of six-year secured notes (B3/B-), and Empire Resorts Inc.’s $475 million offering of five-year secured notes (B+/B+), both have struggled, with pricing pushed well beyond the early indications, sources say.

There were no updates on either of those deals on Friday, according to a trader.

Blue Yonder trades up

Blue Yonder’s 4¼% senior notes due 2026 were in focus on Friday with the notes trading with a healthy premium.

The 4¼% notes were trading in a range of 101 5/8 to 102½ throughout the session. They were changing hands in the 101¾ to 102 1/8 context heading into the market close.

With more than $37 million in reported volume, the bonds were the most actively traded during the session.

Blue Yonder priced an upsized $750 million issue of the 4¼% notes at par on Thursday.

The yield printed tighter than talk in the 4½% area. Initial talk was 5% to 5¼%.

The issue size increased from $500 million.

Fortress holds

Following a strong break, Fortress Transportation held on to its gains in active trading on Friday.

The 9¾% notes continued to trade in the 101½ to 101¾ context throughout the session, a market source said.

The notes were active with more than $30 million in reported volume.

Fortress priced an upsized $400 million issue of the 9¾% notes at par in a Thursday drive-by.

The issue size increased from $300 million.

The yield printed at the tight end of the 9¾% to 10% yield talk. Initial talk was in the 10% area.

The deal was heard to be oversubscribed.

Diamond Sports rallies

Sinclair Broadcast subsidiary Diamond Sports’ secured and unsecured notes continued to rally in active trading on Friday following the renewal of its contract with Comcast.

Diamond Sports’ 5 3/8% senior secured notes due 2026 were up 3½ points to 86½ heading into the market close, a source said.

The bonds had more than $27 million in reported volume during Friday’s session.

While the 6 5/8% unsecured notes due 2027 traded as high as 67 in intraday activity, they came in to close the day up 4 points at 63½.

Both tranches have seen gains of about 10 points on the week.

The notes skyrocketed on news that Comcast and parent company Sinclair had renewed their content carriage agreement, which included Diamond Sports, a source said.

There was concern whether the contract would be renewed with Sinclair and Dish Networks Inc. still unable to reach a deal, leaving Diamond Sports blacked out of Dish’s network.

The Diamond Sports bonds were the subject of controversy in mid-June after Sinclair attempted to exchange the 6 5/8% notes for new 12¾% secured notes due 2026 to reduce its debt load.

The exchange would have required holders to take steep losses and was bitterly opposed by a group of holders.

Only $66 million of the 6 5/8% notes were tendered in the exchange.

$56 million Thursday inflow

The dedicated high-yield bond funds had $56 million of net daily inflows on Thursday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds had $160 million of inflows on the day.

However, high-yield ETFs sustained $104 million of outflows on Thursday, the source said.

News of Thursday's daily flows trails a Thursday afternoon report that the combined high-yield funds saw $3.908 billion of net inflows for the week to the Wednesday, July 22 close, according to the Refinitiv Lipper Fund Flow Report Newsline.

It was the biggest weekly inflow since the week ending June 10, the market source said, adding that the average weekly inflow over the past 17 weeks – a timeframe that encompasses six of the seven biggest weekly inflows on record – has been $2.9 billion.

Indexes down

Indexes closed Friday with losses although many posted gains on the week.

The KDP High Yield Daily index slipped 6 bps to close Friday at 66.55 with the yield now 5.91%.

The index was up 13 bps on Thursday, 19 bps on Wednesday, 33 bps on Tuesday and 13 bps on Monday.

The index posted a cumulative gain of 72 bps on the week.

The ICE BofAML US High Yield index gained 12 bps with the year-to-date return now negative 1.102%.

The index was up 11.3 bps on Thursday, 26 bps on Wednesday, 64.6 bps on Tuesday and 44.8 bps on Monday.

The index saw a cumulative gain of 158.7 bps on the week.

The CDX High Yield 30 index slid 3 bps to close Friday at 101.62. The index dropped 32 bps on Thursday after gaining 17 bps on Wednesday and 22 bps on Tuesday.

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