Forward calendar builds; SFR Group dominates; Sprint, T-Mobile mostly unchanged; Supervalu jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 13 – While the domestic primary market saw no new deals price on Wednesday, it sputtered to life with the forward calendar building.

Ardent Health Services set price talk for its $535 million offering of eight-year senior notes with pricing expected on Thursday.

Mark Andy set price talk for its $135 million private placement offering of five-year senior notes with allocation to take place Thursday.

Energizer Holdings Inc. plans to start an international roadshow on Thursday for a $1.25 billion equivalent two-part offering of eight-year senior notes (B2/BB-).

Teekay Offshore Partners LP and Teekay Offshore Finance Corp. started an international roadshow on Wednesday for a $500 million offering of five-year senior notes (expected ratings Caa2/B/B).

In the Canadian dollar-denominated junk market, Millar Western Forest Products Ltd. priced a C$150 million issue of five-year senior secured first-lien notes (B2/B-) at par to yield 9½%.

Meanwhile, the much-anticipated news on the outcome of AT&T-Time Warner’s battle with the U.S. Department of Justice had little impact on Sprint Corp. and T-Mobile USA, Inc.’s junk bonds on Wednesday, despite the green light the case signaled for merger and acquisition activity in the telecommunications sector.

Sprint’s junk bonds were seen up about 1 point with T-Mobile’s junk bonds “majorly unchanged,” a market source said.

While Sprint and T-Mobile were not active post-antitrust case, SFR Group SA’s 7 3/8% senior secured notes due 2026 (B1/B+) dominated trading activity on Wednesday. The notes were up about 3/8 point as news broke about telecommunications conglomerate Bouygues efforts to buy out the Paris-based cable operator.

SuperValu Inc.’s 7¾% senior notes due 2022 jumped 4 points on Wednesday after the company announced a proposal to reorganize into a holding structure. The proposal would constitute a change of control, a market source said.

Ardent talk 9¼% to 9½%

Ardent Health Services talked its $535 million offering of eight-year senior notes (S&P: B) to yield 9¼% to 9½%.

Official talk came wide to initial price talk in the 9% area.

Books close Thursday.

Joint bookrunner Barclays will bill and deliver. Jefferies and BofA Merrill Lynch are also joint bookrunners.

Mark Andy talk 9½% area at par

In a true private placement, Mark Andy talked its $135 million offering of five-year senior secured notes at 9½% plus or minus 1/8%, at par.

The Section 4(2) deal (no registration rights) is set to allocate on Thursday morning.

William Blair is the sole placement agent

Energizer starts Thursday

Energizer Holdings plans to start an international roadshow on Thursday for a $1.25 billion equivalent two-part offering of eight-year senior notes (B2/BB-).

Energizer Gamma Acquisition, Inc., issuing the dollar notes, is offering $500 million.

Energizer Gamma Acquisition BV, issuing the euro notes, is offering $750 million equivalent.

Joint bookrunner Barclays will bill and deliver. JP Morgan, BofA Merrill Lynch, Citigroup, MUFG, TD and Standard Chartered are also joint bookrunners.

The St. Louis-based manufacturer of batteries and portable lighting products plans to use the proceeds to support its acquisition of Spectrum Brands' global batteries and portable lighting businesses.

Teekay Offshore selling $500 million

Teekay Offshore Partners LP and Teekay Offshore Finance Corp. started an international roadshow on Wednesday for a $500 million offering of five-year senior notes (expected ratings Caa2/B/B).

The debt refinancing deal is set to price during the June 18 week.

Citigroup, DNB, Credit Suisse and Credit Agricole are the joint bookrunners.

Millar Western prices C$150 million

In the Canadian dollar-denominated junk market, Millar Western Forest Products priced a C$150 million issue of five-year senior secured first-lien notes (B2/B-) at par to yield 9½%.

RBC was the sole bookrunner and co-lead manager for the debt refinancing deal. Guggenheim was also a co-lead manager.

A pick-up on the calendar

With the Wednesday additions of Energizer and Teekay, the active forward calendar once again took on an active appearance: $2.42 billion and €1.4 billion of offerings in the market, as of the Wednesday close.

Apart from the above-mentioned business, Denmark-based TDC A/S is presently running a U.S. roadshow for its €1.4 billion equivalent of five-year senior notes in dollar- and euro-denominated tranches.

Early talk on the dollar-denominated tranche is in the 9% area, sources say.

A roadshow for the euro-denominated notes is set to run in Europe during the June 18 week.

Beyond that there is a modest pipeline of deals, sources say.

News that the Federal Reserve Bank's Federal Open Market Committee bumped the Fed Funds rate by 25 basis points on Wednesday and signaled that two more rate increases could come before the end of 2018, should not create headwinds for high yield, an investor said late Wednesday afternoon.

That news has already been priced into the market, the source added.

Majorly unchanged

The highly anticipated decision on the AT&T-Time Warner antitrust battle with the U.S. Department of Justice had little impact on Sprint and T-Mobile’s junk bonds on Wednesday, a market source said.

Despite the green light the decision signaled for future merger and acquisition activity in telecommunications, there was little activity surrounding the junk bonds of the next large merger candidates in the sector.

Sprint’s 7 5/8% notes due 2025 did climb 1 point to 105¼ bid, 106 offered. However, T-Mobile’s junk bonds were “majorly unchanged,” a source said.

SFA Group dominates

While there was little activity surrounding the junk bonds of the next telecommunications merger story in the United States, SFA Group’s 7 3/8% senior notes due 2026 dominated trading activity in the secondary space.

The notes were seen up 3/8 point to trade at par with more than $60 million of the bonds traded by late afternoon, according to a market source.

The notes have been active and making gains since April amid rumors Paris-based Bouygues is considering a bid for the SFR Group to consolidate the telecommunications sector in France.

News broke in French publications on Wednesday that Bouygues Chief Executive Officer Martin Bouygues met with Patrick Drahi in late May to discussion the acquisition.

While the offer was rejected, future talks are expected.

SuperValu jumps

SuperValu’s 7¾% senior notes due 2022 jumped 4 points on Wednesday after the company announced a proposal to reorganize into a holding structure. The notes were quoted at 102½ bid, 103 offered on Wednesday.

They were at 98½ bid, 99½ offered on Tuesday, a market source said.

The reorganization proposal includes separating the company’s wholesale and retail operations, selling certain assets and segregating the company’s liabilities into their respective segments, according to a company news release.

The proposal requires shareholder approval at the 2018 annual shareholders meeting.

The reorganization would trigger a change of control event, a market source said.

Tuesday inflows

The daily cash flows of the dedicated high-yield bond funds were positive on Tuesday, the most recent session for which data was available at press time, the investor said.

High-yield ETFs saw $99 million of inflows on the day.

Actively managed funds saw $20 million of inflows on Tuesday.

Dedicated bank loan funds were also positive on Tuesday, seeing $80 million of inflows on the day.

Indexes gain

Benchmarks for the high-yield secondary market saw gains for the third consecutive trading day on Wednesday.

The KDP High Yield index was up 7 basis points to 70.78 with the yield now 5.78%. The index was up 4 bps on Tuesday and 5 bps on Monday.

The Merrill Lynch High Yield index climbed further into positive territory on Wednesday. The index was up 9.1 bps with the year-to-date return now 0.531%. The index was up 8.8 bps on Tuesday.

The CDX High Yield 30 index was up 9 bps to close Wednesday at 106.75 after a 4 bps rise on Tuesday.

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