Sensata, TriMas price; forward calendar balloons; Pitney Bowes lags; Entercom gains; Extended Stay in focus

By Paul A. Harris and Abigail W. Adams

Portland, Me., March 15 – The domestic high-yield primary market saw an active session on Monday with two drive-by deals pricing and the forward calendar ballooning to $5.82 billion.

Sensata Technologies BV priced an upsized $750 million issue (from $500 million) of eight-year senior notes (Ba3/BB+).

And TriMas Corp. priced an upsized $400 million issue (from $350 million) of eight-year senior notes (Ba3/BB-).

Meanwhile, it was a sideways day in the secondary space with volume relatively light as market players eyed the growing calendar of new deals.

Recent issues continued to have mixed performances.

Pitney Bowes Inc.’s two tranches of senior notes (B1/BB) continued to struggle in the secondary space with both spending most of the session below par.

Entercom Communications Corp.’s recently priced 6¾% senior secured second-lien notes due 2029 (B3/B-) were on the rise in active trading with the notes moving to a 101-handle.

Outside of recent issues, Extended Stay America Inc.’s 4 5/8% senior notes due 2027 were rising following news of the hospitality company’s buyout.

Monday’s primary

The Monday primary market session saw the active forward calendar balloon to $5.82 billion, all of it business expected to price this week.

Meanwhile two issuers came to the drive-through window.

Both upsized their deals.

Executions were solid, with both pricing in the middle of talk.

Sensata Technologies priced an upsized $750 million issue (from $500 million) of eight-year senior notes (Ba3/BB+) at par. Order books were heard to be two-times oversubscribed.

And TriMas priced an upsized $400 million issue (from $350 million) of eight-year senior notes (Ba3/BB-) at par.

Timing was accelerated. The deal was announced earlier in the day as Tuesday business (see related stories in this issue).

Expect the new-issue market to remain busy, a sellside source told Prospect News as the March 15 week got underway.

Although yields have widened by slightly more than half a percent from the record lows of February, the high yield remains a bargain for the right issuers, the source remarked.

Pitney Bowes lags

Pitney Bowes’ two tranches of senior notes continued to struggle in the secondary space after a lackluster break.

Both tranches spent most of the session on a 99-handle although they gained strength heading into the market close.

Pitney Bowes’ 6 7/8% senior notes due 2027 traded in a range of 99½ to par ¼ on Monday.

The majority of prints during the day were on a 99-handle, although they gained strength heading into the close, a source said.

The notes closed the day in the par to par ¼ context.

Volume was light with $15 million on the tape during Monday’s session.

Pitney Bowes’ 7¼% senior notes due 2029 were also on a 99-handle for the majority of Monday’s session.

They were changing hands in the 99¼ to 99½ context heading into the close.

Pitney Bowes priced a $400 million tranche of the 6 7/8% notes and a $350 million tranche of the 7¼% notes at par on Friday.

The 6 7/8% notes priced at the wide end of the 6 5/8% to 6 7/8% yield talk; the 7¼% notes priced at the wide end of the 7% to 7¼% yield talk.

The overall size of the issue was downsized from $800 million.

Entercom gains

Entercom’s 6¾% senior secured second-lien notes due 2029 continued to gain in active trading on Monday.

The notes rose to a 101-handle and stood poised to close the day at 101¾, according to a market source.

There was more than $40 million on the tape.

While the notes traded up to 101 last Friday, they closed the day on a par-handle.

Entercom priced a $540 million issue of the 6¾% notes at par on Thursday.

Extended Stay’s buyout

Extended Stay’s 4 5/8% senior notes due 2027 were on the rise in active trading following news of the hospitality company’s buyout.

The 4 5/8% notes gained ½ point to close the day at 101 7/8.

The notes saw about $23 million in reported volume during Monday’s session.

The 4 5/8% notes were on the rise following news that Blackstone Real Estate Partners and Starwood Capital Group would acquire the hotel chain for about $6 billion in a 50/50 joint venture.

$565 million Friday outflows

The dedicated high-yield bond funds sustained $545 million of net outflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs saw $645 million of outflows on the day.

Actively managed high-yield funds were positive on the day, posting $80 million of inflows on Friday, the source said.

Indexes mixed

Indexes were mixed at the start of the week.

The KDP High Yield Daily index shaved off 3 points to close the day at 69.20 with the yield now 4.16%.

The index was down 12 points on the week last week.

The CDX High Yield 30 index gained 3 bps to close Monday at 108.78.

The index gained 10 bps on the week last week.

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