Altra, Ascent price; Vine, Resideo on tap; Basic Energy up; Chesapeake Energy lags

By Paul A. Harris and Abigail W. Adams

Portland, Me., Sept. 26 – New deal activity continued at a steady pace in the domestic high-yield primary market with two offerings pricing during Wednesday’s session and two more joining the forward calendar.

Ascent Resources Utica Holdings, LLC priced $600 million of 7% eight-year senior notes (B2/BB-) at 99.236 to yield 7 1/8%.

Altra Industrial Motion Corp. priced $400 million of eight-year senior notes (B2/B+) at par to yield 6 1/8%.

The forward calendar also continued to grow.

Resideo Funding Inc. started a roadshow on Thursday for $400 million of eight-year senior notes (B1/BB+).

Vine Oil & Gas LP and Vine Oil & Gas Finance Corp. plan to price $350 million of senior notes due April 15, 2023 on Friday.

Meanwhile, Envision Healthcare Corp.’s closely watched $1.625 billion offering was heard to be going well.

The European primary market was also active on Wednesday.

Getlink SE priced an upsized €550 million issue of five-year senior secured green notes (/BB/BB+) and Avis Budget Finance plc set initial price talk for its €350 million offering of senior notes due January 2026.

The new paper was the focus of the secondary space although with mixed performances in high volume activity.

Altra Industrial’s new offering dominated activity with the notes up more than 1 point. Ascent Resources’ new notes were also active and trading at a slight premium.

Chesapeake Energy Corp.’s $1.25 billion dual-tranche offering (Caa1/B-) had a lackluster reception in the secondary space with both tranches at times lagging their issue price.

Basic Energy Services, Inc.’s new 10¾% senior secured notes due 2023 (B3/B), in contrast, continued to improve on Wednesday with the notes trading more than 2 points above issue.

Ascent at a discount

In Wednesday’s primary market, Ascent Resources priced a $600 million issue of 7% eight-year senior notes (B2/BB-) at 99.236 to yield 7 1/8%.

The yield printed in the middle of the 7% to 7¼% yield talk and slightly wide of initial price talk set in the 7% area.

Credit Suisse was the left bookrunner.

The Oklahoma City-based oil and gas company plans to use the proceeds to exercise the equity clawback for 35% of its existing 2022 notes, including the premium, and to pay down its credit facility.

Altra prices tight

Altra Industrial Motion priced a $400 million issue of eight-year senior notes (B2/B+) at par to yield 6 1/8%.

The yield printed at the tight end of yield talk announced in the 6¼% area and well inside initial price talk set in the high 6% area to 7%.

Goldman Sachs was the left bookrunner for the dividend deal.

Resideo starts Thursday

The active calendar grew on Tuesday.

Resideo Funding plans to start a roadshow on Thursday for a $400 million offering of eight-year senior notes (B1/BB+) related to Honeywell International Inc.’s spinoff of its Honeywell Home business.

Goldman Sachs is the left bookrunner

Proceeds, along with proceeds from a concurrent term loan, will be used to repay a $1.2 billion intercompany note to Honeywell or a subsidiary of Honeywell, with any remaining proceeds to be used for general corporate purposes.

Vine Oil on deck

Vine Oil & Gas plans to price a $350 million offering of senior notes due April 15, 2023 on Friday.

An investor conference call is scheduled for 10:30 a.m. ET on Thursday.

Morgan Stanley, HSBC, JP Morgan, Credit Suisse, SG, Natixis and Blackstone are the joint bookrunners for the debt refinancing.

Envision on the road

Meanwhile, the sole megadeal now in the market is going well, sources say.

Envision Healthcare is marketing a $1,625,000,000 offering of eight-year senior notes with initial price talk is in the high 8% area.

At that talk the deal is going very well, a trader said on Wednesday, but added that the market is looking for pricing to tighten.

The Envision Healthcare $5.5 billion term loan is a blowout to the extent that timing on the bank deal was accelerated, sources say.

GetLink upsizes

In the euro-denominated primary market, Getlink priced an upsized €550 million issue of five-year senior secured green notes (/BB/BB+) at par to yield 3 5/8%.

The amount was increased from €500 million.

The yield printed at the tight end of yield talk set in the 3¾% area.

Joint global coordinator, joint bookrunner and green structuring adviser Goldman Sachs will bill and deliver. BNP Paribas is also a joint global coordinator, joint bookrunner and green structuring adviser. Deutsche Bank is a joint bookrunner.

Elsewhere, Avis Budget Finance set initial price talk for its €350 million offering of senior notes due January 2026 (expected B1/confirmed BB) in the high 4% area.

The roadshow continues in London’s West End on Thursday and the offering is expected to price later the same day.

Altra Industrial dominates

Altra Industrial’s 6 1/8% senior notes due 2026 dominated activity in the secondary space with the notes “doing very well,” a market source said.

They were seen trading between 101 5/8 and 101¾ with more than $117 million of the bonds on the tape by late afternoon.

Ascent up slightly

Ascent Resources 7% senior notes due 2026 were seen about ½ point above their issue price of 99.236 in high-volume trading.

The notes traded in a range of 99½ to par 1/8 and were seen between 99 5/8 and 99¾ in the late afternoon. About $55 million of the bonds changed hands during Wednesday’s session.

Chesapeake Energy lags

Chesapeake Energy’s new senior notes had a lackluster performance in the secondary space with both tranches at times lagging their issue price.

Chesapeake Energy’s 7% senior notes due 2024 were largely trading below par. They were seen trading in a range of 99 5/8 to 99.938.

The 7% notes “priced on the screws,” a market source said.

“They priced too tight,” another source said.

While some prints were below par, the 7½% senior notes due 2026 were largely trading at par.

Chesapeake Energy priced $1.25 billion of senior notes in two-tranches in a Tuesday drive-by.

The deal included an $850 million tranche of the 7% notes and a $400 million tranche of the 7½% notes, both of which priced at par.

The 7% notes priced at the tight end of the 7% to 7¼% yield talk. Initial talk was in the context of 7% to 7¼%.

The 7½% notes priced in the middle of talk in the 7½% area. Initial talk was in the context of 7¼% to 7½%.

Basic Energy trades up

Basic Energy Services’ 10¾% senior notes due 2023 continued their upward momentum on Wednesday, adding another ¼ point on the session.

They were seen at 101¼ bid, 102¼ offered with trades between 101 and 101¾, sources said.

The notes “were up big time” up after breaking for trade on Tuesday and were seen at 101 bid, 102 offered, sources said.

Basic Energy priced a $300 million issue of the 10¾% senior secured notes (B3/B) at 99.042 to yield 11% on Tuesday. The yield printed on top of initial talk for a yield in the 11% area.

The coupon was extremely high for secured notes, a market source said.

Basic Energy initially marketed the deal in March but postponed pricing due to the lack of availability of attractive rates.

Tuesday outflows

Daily cash flows for dedicated high-yield bond funds were negative on Tuesday, the most recent session for which data was available at press time, a trader said.

High-yield ETFs saw $80 million of outflows on the day, the source said, adding that although the ETF cash flows remain negative they have stabilized since there were $1.4 billion of outflows during the Sept. 19-21 period.

Actively managed high-yield funds sustained $10 million of outflows on Tuesday, the trader said.

Indexes mixed

Three benchmarks for the high-yield secondary market were mixed on Wednesday after all three were largely flat during Tuesday’s session.

The KDP High Yield Daily index was down 1 basis points to close Wednesday at 70.40 with the yield now 5.83%. The index was flat on Tuesday at 70.41 after gaining 5 bps on Monday.

The Merrill Lynch High Yield index was on the rise on Wednesday after two consecutive days of slight losses. The index was up 7.6 bps with the year-to-date return now 2.366%.

The index was down 1.3 bps on Tuesday and 3.8 bps on Monday.

The CDX High Yield 30 index also climbed on Wednesday. The index was up 11 bps to close the day at 107.4. The index was also flat on Tuesday, closing the day at 107.29, flush with Monday.

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