Signode prices eight-year deal; new EnQuest bonds busily traded, lose ground; market seen weaker

By Paul Deckelman and Paul A. Harris

New York, April 7 - The high-yield primary market kicked off the new week on a quiet note on Monday as one new deal came to market - Signode Industrial Group's offering of eight-year notes, which priced late in the session as a regularly scheduled forward-calendar transaction.

The Glenview, Ill.-based protective packaging products manufacturer's new bonds came too late in the day for any aftermarket dealings.

That $750 million of new notes contrasted with Friday, when two issuers teamed up to price some $1.65 billion of dollar-denominated, fully junk-rated paper.

One of those new deals - from British energy exploration and production company EnQuest plc - had firmed smartly when it moved into initial aftermarket dealings after pricing Friday, but traders said that it had given up most of those early gains during Monday's session. The credit was one of the day's most actively traded issues.

Friday's other transaction -NRG Energy Inc.'s drive-by $1 billion 10-year issue - was also seen easier, though on nowhere nearly as big a volume as EnQuest. Some of the wholesale power producer power generating company's existing bonds were up, though on similarly restrained turnover.

Away from the issues that have already priced, syndicate sources said coal and natural gas producer Consol Energy Inc. and commercial printer Quad/Graphics Inc. were launching new deals, while oilfield services provider FTS International, Inc. scheduled an investor conference call for its pending new issue.

Overall, Monday's session was described as very quiet with a softer tone. But as was the case on Friday, Junkbondland managed to avoid the sharp slide the equity markets were suffering.

Statistical market performance indicators saw their third consecutive mixed session.

Signode $750 million at 6 3/8%

The high-yield primary market produced a steady stream on news throughout the Monday session as Signode Industrial priced a $750 million issue of eight-year senior notes (Caa1/CCC+/) at par to yield 6 3/8%.

The yield came at the tight end of yield talk in the 6½% area. Earlier guidance was 6¾% to 7%.

The acquisition financing deal was well-oversubscribed, according to a buyside source who had a good look.

Goldman Sachs, J.P. Morgan, Barclays, BofA Merrill Lynch, Citigroup and Credit Suisse were the joint bookrunners.

Wind talks €3.75 billion

Wind Acquisition Finance SA set price talk for its €3.75 billion equivalent dual-currency offering of seven-year notes (/B/B) on Monday.

A €1.85 billion tranche is talked to yield in the 7¼% area.

A $2.6 billion is talked to yield 7½% to 7¾%.

Both tranches are seeing good demand, according to a portfolio manager, who added that Wind is a well known name in the market and has been for a long time.

The deal is set to price o Tuesday.

Joint physical bookrunner Deutsche Bank will bill and deliver. Credit Suisse is also a joint physical bookrunner. BNP, Credit Agricole and Banca IMI are joint global coordinators. Barclays, ING, SG CIB and UniCredit are joint lead bookrunners. Morgan Stanley and Natixis are joint bookrunners.

Consol Energy roadshow

Consol Energy plans to start a roadshow on Tuesday for a $1.6 billion offering of eight-year senior notes (expected ratings B1/BB).

The deal is expected to price on Thursday.

Joint physical bookrunner J.P. Morgan Securities LLC will bill and deliver for the debt refinancing deal. Credit Suisse Securities (USA) LLC is also a joint physical bookrunner.

BofA Merrill Lynch, Goldman Sachs and Wells Fargo are joint bookrunners.

FTS investor call

FTS International plans to participate in an investor conference call on Tuesday to discuss its $500 million offering of eight-year senior secured notes (expected ratings B2/B-).

The deal is set to price at the end of the present week.

Wells Fargo is the left bookrunner for the debt refinancing deal. BofA Merrill Lynch, UBS and Barclays are the joint bookrunners.

Quad/Graphics roadshow

Quad/Graphics started a roadshow on Monday for a $300 million offering of non-callable eight-year senior notes (expected ratings B1/B).

The deal is set to price on Friday.

J.P. Morgan, BofA Merrill Lynch, US Bancorp, PNC and SunTrust are the joint bookrunners.

The Maryland Heights, Mo.-based printer and media channel integrator plans to use the proceeds for general corporate purposes including debt refinancing.

Cegedim upsizes tap

Cegedim SA priced an upsized €125 million add-on to its 6¾% senior notes due April 1, 2020 (/B+/) at 105.75 to yield 5.489%.

The deal was upsized from €125 million.

The reoffer price came at the rich end of the 105.5 to 105.75 price talk.

SG CIB was the bookrunner for the quick-to-market add-on.

Piaggio seven-year notes

Piaggio & Co. SpA is in the market with a €200 million offering of seven-year notes (expected ratings Ba3/BB-).

An investor roadshow is underway through Friday.

Banca Imi, BNP Paribas, BofA Merrill Lynch, Mediobanca, UniCredit and HSBC are the joint bookrunners for the debt refinancing deal.

Signode unseen in secondary

In the secondary market, the new 6 3/8% notes due 2022 from Signode Industrial Group appeared too late in the session for any kind of meaningful aftermarket dealings, a trader said.

EnQuest busy, but lower

A trader said that EnQuest's 7% notes due 2022 "pretty much" traded in a 100½ to 100 7/8 bid context.

That was well down from the levels as high as 101½ bid, 101 7/8 offered at which the London-based petroleum exploration and production company's new $650 million deal had traded on Friday, when that scheduled offering had priced at par after upsizing from an originally planned $500 million.

A second trader said that those bonds had initially traded between 101¼ and 101½ on Monday morning, but then "they sold off their highs." They then "bounced back up" off their day's-lows to go out at 100¾ bid, 101¼ offered, "so those got a little softer."

A market source at another desk pegged them down by 5/8 point at 100½ bid, on volume of more than $20 million - one of Monday's most actively traded credits.

However, yet another trader quoted the bonds late in the day quoted those bonds trading between par and 101 - off anywhere between ½ of a point and 1½ points from the levels he had seen on Friday.

NRG deal quietly softer

Friday's other new deal - a quick-to-market $1 billion of 6¼% notes due 20224 from Princeton, N.J.-based wholesale power producer NRG Energy - "traded just above the issue price most of the morning, then finally broke below par."

He saw the bonds finishing in a locked market around 99 15/16, "trading around the issue price, but a little weaker today."

Another trader located the bonds around 99¾ bid, 100 1/8 offered, which he said was a 5/8 of a point fall from where he had seen them on Friday, when the bonds had priced at par but then had gotten as good as 100 3/8 bid, 100 7/8 offered in the aftermarket.

The new NRG issue generated far less trading volume than the notably smaller EnQuest deal - slightly less than two-thirds the NRG megadeal's size. A trader who had seen activity in EnQuest on Monday said he had seen no such dealings in NRG.

But some of the company's existing issues were higher on the day, albeit on thin volume.

The company's 8¼% notes due 2020 gained 5/8 of a point, rising to 110 5/8, with about $4 million of the bonds having traded. NRG's 6 5/8% notes due 2023 gained ¼ of a point to end at 104½ bid, on volume of over $7 million.

Some recent deals trading

Among other recently priced issues, a trader said that Tullow Oil plc's 6¼% notes due 2022 were trading in a par to 100½ bid context on Monday - although on considerably less volume than on Friday, when over $19 million of those notes had changed hands, putting the London-based oil and gas exploration and production company's new deal among the most actively traded issues on the day.

On Friday, those bonds had finished at 100½ bid, up some 3/8 of a point on the day.

Tullow had priced $650 million of those notes on Thursday as a regularly scheduled forward-calendar offering, bringing them to market at par after the deal had been upsized from an originally announced $500 million.

The bonds had finished around 100 1/8 bid in initial aftermarket activity after their pricing.

Going back a little further, a trader said that Lonestar Resources America, Inc.'s new 8¾% notes due 2019 traded at 101½ bid, 102¼ offered, which he called down ¼ of a point on the day.

The Fort Worth, Texas-based independent oil and natural gas production and development company's bonds had initially firmed smartly after it priced its regularly scheduled $220 million forward calendar offering at par last Tuesday. The company upsized the deal from an initially shopped $200 million.

The bonds were as good as 102¼ bid, 102½ offered by Wednesday, but subsequently gave back about a point of those gains in the days that followed.

A trader said that last Monday's big two-part drive-by megadeal from Canadian aircraft and railroad equipment manufacturer Bombardier Inc. continued to hold most of the gains it had notched during trading last week.

He saw the Montreal-based company's 6% notes due 2022 at 101½ bid, 101¾ offered, calling that up 1/8 of a point on the day, while its 4¾% notes due 2019 lost 1/8 point to end at 101¼ bid, 101½ offered.

Bombardier had priced $1.2 billion of the 6% notes and $600 million of the 4¾% paper at par.

A quieter, softer session

One of the trader said that "there wasn't much of anything happening, unfortunately," while a second trader agreed that it was "just a very quiet day," suggesting that some market participants might be on spring break this week, "depending on where their kids go to school."

The first trader, meanwhile, opined that "stuff is hanging in, even with the equity selloff." The bellwether Dow Jones Industrial Average, which had nosedived on Friday along with other major indices, slid by another 166.84 points, or 1.02% on Monday to close at 16,245.87.

He said that "maybe it's a little softer - but nothing dramatic. It's a little softer, but very quiet," with activity outside of the recent new deals "pretty muted."

Indicators mixed on day

Statistical junk performance indicators were mixed for a third straight session on Monday. They had turned mixed on Thursday and stayed that way on Friday, after having been higher over the two previous sessions.

The Markit Series 22 CDX North American High Yield index lost 5/16 of a point on Monday, its second consecutive downturn. It ended at 107 1/8 bid, 107¼ offered, after having dropped by ¼ of a point on Friday.

The KDP High Yield Daily index finished down by 4 basis points on Monday, closing at 75.01. On Friday, it had risen by 11 bps. Its yield rose by 3 bps to 5.21%, after having declined by 2 bps on Friday.

However, the widely followed Merrill Lynch High Yield Master II index's momentum continued unchecked on Monday, as it posted its seventh straight advance, edging up by 0,004%, on top of the 0.107% gain seen on Friday.

The latest improvement lifted its year-to-date return to 3.241%, a seventh straight new peak level for the year so far, up from Friday's 3.238%, the former peak level for 2014.

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