Upsized Barminco prices; Petsmart ticks higher; recent Ultra Petroleum, Cedar Fair mixed

By Colin Hanner and Paul A. Harris

Chicago, April 11 – Barminco Finance Pty Ltd. priced an upsized $350 million of five-year senior secured notes at par to yield 6 5/8% on Tuesday, as overall activity slowed to a “trickle” in the high-yield market, a trader said, with the most activity coming out of Petsmart Inc. and recently-priced new issues, and movement not veering too wide.

“It slowed to trickle today,” the trader said of the session’s activity, which is yielding to current and upcoming religious holidays. “And tomorrow will probably look dry compared to today.”

Phoenix, Ariz.-based pet retailer Petsmart was “probably the most active name in the market today,” a trader said, and one of the only issues to see movement over 1 point.

Recent issues Ultra Petroleum Corp. and Cedar Fair L.P continued to trade into Tuesday, with the latter trading marginally higher.

Ultra Petroleum fell off highs reached on Monday.

With a sizeable advance on Monday, Endo International plc pared those gains on Tuesday, a trader said.

Idiosyncratic movers tended to make up the rest of the movement, like telecommunications company Frontier Communications Corp., which are “always active,” a trader said, and Houston-based electricity provider Calpine Corp., which was down near 1 point on the session.

Bariminco upsizes

In Tuesday's primary market Barminco Finance Pty Ltd. priced an upsized $350 million issue of five-year senior secured notes (B2/expected B) at par to yield 6 5/8%.

The issue size was increased from $300 million.

The yield printed on top of yield talk.

Goldman Sachs & Co. was the left bookrunner. HSBC and SC Lowy were joint bookrunners.

The notes come with two years of call protection.

Up to $125 million of the notes may be redeemed at 101 during the non-call period using the proceeds from an initial public offering of stock.

The Hazelmere, Western Australia-based international mining contractor plans to use the proceeds, together with cash in the bank, to repay the entire $299.7 million of its outstanding senior notes.

SNF Floerger roadshow

SNF Floerger Group, a subsidiary of SPCM SA, is marketing a $450 million offering of senior notes due Sept. 15, 2025 (expected ratings Ba2/BB+) on a roadshow that is set to wrap up on Wednesday, according to a market source.

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

Credit Agricole CIB, Natixis and SG CIB are the co-managers.

The Rule 144A for life 8.4-year notes become callable after three years at par plus 75% of the coupon, and feature a three-year 35% equity clawback at par plus the coupon and a 101% poison put.

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

Petsmart ‘very active’

The 7 1/8% notes due 2023 were up 1¼ point to 93¾, a trader said, adding there were 50 high-volume trades on the day.

Another trader said the bonds were as high as 94 before deflating to 93, only to rise to a 93¾ context.

Recent deals mixed

A market source quoted Cedar Fair’s 5 3/8% notes due 2027 with a 101½ bid, 102 offer, up ¼ point from Monday’s levels.

A trader said the notes were up 3/8 point to 101 3/8.

Ultra Petroleum’s 7 1/8% notes due 2025 were quoted with a 100 bid, 100¼ offer, a market source said, while a trader said they were down 5/8 point to 99¾.

The 6 7/8% notes due 2022 were quoted with a 101¼ bid, 101½ offer, though a trader said the notes were down ¼ point to 101½.

Endo treks down

After announcing the offering of $750 million of secured notes, as well as preliminary first quarter results that aligned with market expectations, Endo International’s bonds were higher on Monday.

Profit taking may have been behind the 1-point loss in the 6% notes due 2023 on Tuesday, which finished at 86, a trader said.

In energy

Though crude oil futures advanced for the fifth-straight session, the electricity sector had more moves in the high-yield space.

Calpine’s 5¾% notes due 2035 were down ¾ point to 97 1/8.

Similarly, GenOn Energy Corp. also saw some notable volume trading in the electricity sector, though its 7 7/8% notes due 2018 were unchanged at 73.

Financial companies

Two financial companies were up or flat on a day of lackluster trading.

Commercial finance business Textron Financial Corp.’s 2.774% notes due 2022 were up ¾ point to 77.

And debt-issuing company Altice Financing SA’s 6½% notes due 2022 were unchanged at 105.

Notable one-off moves

Idiosyncratic movement was characteristic of a session where issues tended to trade tight and not very often.

Frontier Communications’ 11% notes due 2025 were down ½ point to 97¾

Columbus, Ohio-based chemical company Hexion Inc.’s 9% notes due 2020 were up 1¼ points to 79.

Plano, Texas-based rent-to-own furnisher Rent-A-Center Inc.’s 4¾% notes due 2021 were up ¼ point to 88½.

And Toys ‘R’ Us Inc.’s 12% notes due 2021 were down ½ point to 87.

Market indexes down

The KDP High Yield Daily index was down 1 basis point to 72.03 on Tuesday, breaking four-straight days of gains.

On Monday, it was up 3 basis points to 72.04.

On Friday, it edged higher by 1 bp. That followed gains of 8 bps on Thursday.

Its yield was likewise up 1 bp on Monday to finish at 5.23%, mirroring similar gains it had made on Monday.

On Friday, yield came in by 1 bp, ending at 5.21%, its third consecutive narrowing. It had tightened by 2 bps on Thursday.

The Markit CDX Series 28 index was lower for the third-consecutive session on Tuesday, down 1/5 point to close at a 106.97 bid, 107.03 offer.

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

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