Morning Commentary: Energy Transfer Equity bonds gain on merger; active primary eyed

By Paul A. Harris

Portland, Ore., Aug. 2 – In Thursday trading, the bonds of Energy Transfer Equity, LP were up 2 points on news that the company is acquiring Energy Transfer Partners, LP in a unit-for-unit exchange expected to close during the fourth quarter of 2018, sources said.

The Energy Transfer Equity 5½% notes due June 2027 were 104¾ bid on Thursday morning, a trader said.

The move is expected to simplify the corporate structure and strengthen the balance sheet, the source added.

Among recent issues, the Williams Scotsman International Inc. (Mason Finance Sub, Inc.) 6 7/8% senior secured notes due August 2023 (B2/B) were par ¼ bid, par 3/8 offered in light trading on Thursday.

The $300 million issue priced at par on Tuesday, with the yield printing 12.5 basis points beneath the tight end of the 7% to 7¼% price talk and well inside of initial talk in the 7¼% to 7½% area.

Intelsat focus of primary

In the new issue market, the stage was set for a big Thursday.

Intelsat Connect Finance SA announced Wednesday afternoon that it plans to price $1 billion of senior notes due February 2023 (S&P: CCC-) on Thursday afternoon.

An investor call was scheduled to get underway at 11:30 a.m. ET on Thursday.

As the market awaits official talk, chatter has the deal coming together with a 9¾% to 10% coupon at around 2 points of original issue discount to yield 10½%, a trader said.

Elsewhere it was heard to be coming tighter, with a 9¾% coupon at a discount to yield 10%.

It is heard to be going well, playing to around $1 billion in reverse inquiry, and is expected to grow to $1.25 billion, a trader said.

Credit Suisse is the left bookrunner.

The Luxembourg-based satellite services provider plans to use the proceeds the fund the redemption of the Intelsat Connect Finance 12½% notes due 2022 and to retire Intelsat Jackson debt.

Elsewhere FS Energy, LLC talked its $500 million offering of five-year senior secured bullet notes (Ba3/BB-) to yield in the 8% area.

Official talk comes on top of initial guidance.

The deal is set to price Thursday afternoon.

J.P. Morgan Securities LLC, SG CIB and BMO Securities are the joint bookrunners.

And PGT Innovations, Inc. talked its $315 million offering of eight-year senior notes (B3/B) to yield in the 6¾% area.

Official talk comes tight to early guidance in the 7% area, a trader said.

Books close at 1:30 p.m. ET on Thursday, and the deal, being managed by SunTrust Robinson Humphrey Inc., is set to price thereafter.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.