PHI joins calendar, existing notes gain; MGM dominates; Ardent trades up; AMAG jumps

By Paul A. Harris and Abigail W. Adams

Portland, Me., June 15 – The European high-yield primary market saw one deal price on Friday while the domestic market remained quiet.

Europcar priced a €150 million add-on to EC Finance plc’s 2 3/8% senior secured notes due Nov. 15, 2022 (B1/BB-) at 99.0001 to yield 2.62% in a quick-to-market trade.

While no deals priced domestically, PHI, Inc. joined the forward calendar with plans to start a roadshow on Monday for a $500 million offering of five-year senior secured notes.

The company’s 5¼% senior notes due 2019, which will be refinanced with proceeds from the new offering, were active and making gains after the roadshow announcement.

Trading volume was light in the secondary market on Friday with no new paper entering the space. However, Thursday’s deals remained active.

MGM Resorts International’s newly priced 5¾% senior notes due 2025 (Ba3/BB-) dominated trading activity with the notes up slightly.

Blue Racer Midstream LLC’s new 6 5/8% senior notes due 2026 (B2/B) also continued to see high trading volume on Friday although the notes were largely unchanged.

Ardent Health Services LLC’s 9¾% senior notes due 2026 (Caa2/CCC+) were seen almost 3 points above their issue price on Friday although the notes have seen little trading activity since they priced.

Away from the new deal-related action, AMAG Pharmaceuticals Inc.’s 7 7/8% senior notes due 2023 jumped more than 4 points after the company announced plans to repay the outstanding amount with proceeds from a divestiture.

Europcar’s add-on

Europcar priced a €150 million add-on to the 2 3/8% senior secured notes due Nov. 15, 2022 (B1/BB-) issued by EC Finance at 99.0001 to yield 2.62% in a quick-to-market trade.

The reoffer price came on top of price talk.

Global coordinator BNP Paribas will bill and deliver. Credit Agricole and HSBC were also global coordinators.

The Paris-based vehicle rental company plans to use the proceeds, together with a draw on its senior asset-backed revolving facility and cash on hand, to refinance the existing Goldcar asset-backed bridge facility.

PHI roadshow

PHI disclosed plans to start a roadshow on Monday for a $500 million offering of five-year senior secured notes.

The roadshow runs through Wednesday and the deal is set to price thereafter.

UBS is the lead bookrunner. RBC is the joint bookrunner.

The Lafayette, La.-based provider of helicopter services to the oil and gas sector and aviation and clinical services to air medical markets plans to use the proceeds to redeem $500 million of its 5¼% senior notes due March 2019 and pay off its existing revolver.

PHI’s 5¼% notes were active and making gains after news of the roadshow broke. The notes were up 2¼ point to trade at 98, a market source said.

Previously, the notes traded with a 96 handle.

The notes were active and making gains in late May amid speculation the company would try to refinance the debt.

While the prospects for refinancing look good, PHI “is a tricky one,” a market source said. The company has extremely high leverage.

“This is not a low leverage situation,” the source said.

The week ahead

PHI takes a place aboard a robust active forward calendar spotlighting three dual-currency deals, which are expected to price next week at the conclusions of international roadshows.

Energizer, in the market to raise cash for its acquisition of Spectrum Brands’ global batteries and portable lighting businesses, has been roadshowing a $1.25 billion equivalent offering of eight-year senior notes (B2/BB-).

The deal features $500 million coming with initial price talk of 6½% to 6¾%. There will also be a $750 million equivalent tranche of euro-denominated notes.

Denmark-based TDC A/S is on the road with €1.4 billion equivalent of five-year senior notes, a buyout deal coming in dollars and euros. The dollar-denominated notes have initial price talk in the low 9% area.

And Spain’s Cirsa Gaming Corp. plans to sell €1.56 billion equivalent of seven-year senior secured notes (expected ratings B2/B+) in three tranches: euro-denominated floating-rate notes with initial talk of Euribor plus 525 basis points, euro-denominated fixed-rate notes with initial talk in the 6% area and dollar-denominated fixed-rate notes with initial talk in the 8% area.

Away from those big sticker deals, Teekay Offshore Partners is on the road with $500 million of five-year senior notes (expected ratings Caa2/B/B) with initial guidance in the low to mid 8% area.

And Schmolz + Bickenbach is marketing a €150 million add-on to the 5 5/8% senior secured notes due July 15, 2022 issued via Schmolz + Bickenbach Luxembourg Finance SA.

Beyond those announced deals, the drive-through window is expected to be open in the week ahead, sources said.

With June meetings of the Federal Reserve Bank’s Federal Open Market Committee, the European Central Bank and the Bank of Japan now in the rearview mirror there should be green lights along the track ahead, a syndicate banker said.

Week sees $2.47 billion

With no deals on Friday, the week ended with $2.47 billion of issuance in the U.S. market, down from the previous week’s $2.95 billion and the fourth slowest week so far this year.

Still, the activity was enough to break through the $100 billion barrier for 2018 so far.

The year’s total through Friday’s close was $101.79 billion in 193 tranches, lagging 2017’s pace of $137.19 billion in 250 tranches by 25.8%, according to data compiled by Prospect News.

MGM dominates

While no new paper entered the market on Friday, Thursday’s deals remained in focus in the secondary.

MGM’s newly priced 5¾% senior notes due 2025 saw another day of high-volume trading on Friday with the notes slightly improved.

The notes were quoted at par 3/8 bid, par 5/8 offered and were seen trading at par ½, according to market sources. More than $88 million of the bonds had changed hands by late afternoon.

The notes were quoted at par bid, par 1/8 offered Thursday afternoon.

MGM sold an upsized $1 billion issue of seven-year senior bullet notes (Ba3/BB-) at par in a drive-by sale on Thursday.

The deal was increased from $500 million and the yield printed in the middle of talk that was set in the 5¾% area.

The notes looked cheap and their initial lack of upward movement in secondary trading was surprising, sources said.

Blue Racer unchanged

Blue Racer’s new 6 5/8% senior notes due 2026 also remained active in the secondary space although the notes were largely unchanged from Thursday’s levels.

The notes were quoted at par ½ bid, 101 offered on Thursday and continued to trade flat from Thursday’s close at par 5/8, sources said.

More than $24 million of the bonds had traded by late afternoon.

Blue Racer priced a $300 million issue of the eight-year senior notes at par in a Thursday drive-by.

The yield printed at the tight end of yield talk in the 6¾% area.

Ardent trades up

Of the deals that priced on Thursday, Ardent’s 9¾% senior notes due 2026 reached the highest levels in secondary trading.

The notes, which priced at 98.628, were seen trading between par 7/8 and 101½ on Friday with most trades between 101¼ and 101½, a market source said.

While the notes were trading high, there was little activity surrounding them. Only about $6 million of the bonds changed hands on Friday.

Ardent priced a downsized $475 million issue of 9¾% eight-year senior notes at 98.628 to yield 10% at the conclusion of a roadshow on Thursday.

The 9¾% notes struggled during book building.

The deal was reduced from $535 million.

The coupon, reoffer price and yield came on top of final talk which was revised from early talk of 9¼% to 9½%.

Initial talk was in the 9% area. There were also covenant changes.

AMAG gains

AMAG’s 7 7/8% senior notes due 2023 jumped more than 4 points on Friday after the company announced it would repurchase the notes with proceeds from its divestiture from Cord Blue Registry.

The notes were up 4 3/8 point to trade at 106 1/8, a market source said.

More than $25 million of the bonds were in play during Friday’s session.

The notes are non-callable until Sept. 1 and then may be redeemed at a call price of 105.9, according to the Prospect News database.

AMAG announced on Friday it would divest Cord Blood Registry to private equity investment firm GI Partners for $530 million in an all-cash sale.

Proceeds will be used to pay off the $475 million outstanding of the company’s 7 7/8% senior notes, according to a company news release.

Thursday inflows

Daily cash flows for dedicated high-yield bond funds were positive on Thursday, the most recent session for which data was available at press time, an investor said.

High-yield ETFs saw $195 of inflows on the day.

Actively managed funds saw $25 million of inflows.

The daily numbers come on the heels of a Thursday afternoon report from AMG Data Services Inc. that the dedicated junk bond funds saw $324 million of net inflows during the week to the Wednesday, June 13 close.

Indexes mixed

Benchmarks for the high-yield secondary market ended Friday mixed after all saw gains since the start of the week.

The KDP High Yield index slipped 3 basis points to close Friday at 70.84 with its yield now 5.75%. The index was up 9 bps on Thursday.

The Merrill Lynch High Yield index saw a solid week of gains, although the gains on Friday were slight.

The index was up 1.1 bps on the final session of the week with the year-to-date return now 0.659%. The index was up 11.7 bps on Thursday.

The index broke into positive territory on June 5 for the first time since May 15 and has remained there since.

The CDX High Yield 30 index was up another 26 bps on Friday, a market source said. The index was quoted at 106.968 bid, 107.058 offered. The index was also up 25 bps on Thursday.

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