Avantor, Golden Nugget megadeals, ViaSat hit road as market reopens after holiday; Tesla again busy

By Paul Deckelman and Paul A. Harris

New York, Sept. 5 – It was back to work in Junkbondland on Tuesday following the long Labor Day holiday break in the United States, which had seen the market closed on Monday.

Although that holiday generally marks the end of the traditional late-summer lull in primaryside activity, there was no rush to bring any new deals to market, with no dollar-denominated transactions seen to have priced.

The only pricing activity took place in Europe, as Swiss-based multi-metals company Nyrstar NV came to market with a €100 million add-on to its existing 2024 notes.

But things were happening behind the scenes in the domestic market.

Avantor, Inc., a supplier of ultra-high-purity materials to the life sciences and advanced technology industry, unveiled plans for European and American roadshows for its $4.25 billion equivalent dual-currency deal backing its planned acquisition of industry peer VWR International LLC.

Gaming, restaurant, lodging and entertainment company Golden Nugget, Inc. – the former Landry’s Inc. – announced a nearly $1.42 billion two-part junk offering, including an add-on to its existing 2024 notes and a new stand-alone eight-year tranche.

And communications provider ViaSat, Inc. was shopping a $600 million issue of eight-year notes around to potential investors.

In the secondary market, volume picked up somewhat from the low-pre-holiday levels seen last week, and, as has been the case for much of the past few weeks, the big new eight-year note issue from electric car manufacturer Tesla, Inc. was the most actively traded name, moving lower in busy dealings.

There was also considerable activity in the recently priced secured megadeal from fast-food franchisor Restaurant Brands International Inc.

Statistical market performance measures turned mixed on Tuesday, after having finished higher across the board for three straight sessions on Wednesday, Thursday and Friday. They had also been mixed last Tuesday, after having been up for the three straight sessions before that.

The Monday session saw multiple deals in various currencies announced, as a calendar began to take shape into the middle part of September.

ViaSat, Inc. plans to price $600 million of eight-year senior notes (B3/BB-) later this week.

BofA Merrill Lynch is leading the offer.

The Carlsbad, Calif.-based provider of satellite and other wireless networking systems plans to use the proceeds to fund the tender offer for its 6 7/8% senior notes due 2020.

Golden Nugget two-part deal

Golden Nugget, Inc. announced that it plans to sell $1,415,000,000 of high-yield notes in two tranches.

The deal, in the market via bookrunner Jefferies, is set to price in the middle part of the week ahead.

The company, which was formerly known as Landry's, Inc., is offering a $745 million add-on to the Landry's 6¾% senior notes due Oct. 15, 2024 and $670 million of new eight-year senior subordinated notes.

Proceeds, along with a $1.08 billion term loan, will be used to refinance Golden Nugget debt and fund a shareholder distribution.

The prospective issuer is a Houston-based diversified restaurant, hospitality and entertainment company.

Avantor rolls out $4.25 billion equivalent

Avantor, Inc. scheduled an international roadshow for $4.25 billion equivalent of high-yield notes in three tranches.

A European roadshow starts on Monday. A roadshow in the United States gets underway on Thursday, Sept. 14.

On offer are $1,401,000,000 and €500 million of seven-year senior secured notes, and $2.25 billion of eight-year senior unsecured notes.

Goldman Sachs the left lead. Barclays, JP Morgan Securities LLC and Jefferies LLC are also leads.

Proceeds, together with preferred equity financing of Vail Holdco, as well as $5.5 billion of senior secured credit facilities and cash on hand at VWR International LLC, will be used to finance the acquisition of VWR and fund a distribution to equity holders of Avantor and the issuer’s subsidiaries.

Nyrstar taps 6 7/8% notes

Nyrstar NV priced the only junk deal to clear the market on Tuesday, a €100 million add-on to its 6 7/8% senior notes due March 15, 2024, which came at 101.50.

The reoffer price came at the rich end of the 101.25 to 101.5 price talk.

Deutsche Bank led the sale.

Proceeds will be used to refinance amounts outstanding under the 2018 convertible bonds and to pay down debt under, but not cancel, existing credit agreements.

Equinix talk 3¼% area

Equinix, Inc. gave initial price talk in the 3¼% area for its €750 million public offering of eight-year senior notes (expected ratings B1/BB+).

The deal was scheduled to roadshow in London City on Tuesday, and in London West End on Wednesday, and is also set to price on Wednesday.

Lead left bookrunner Barclays will bill and deliver. BofA Merrill Lynch, JP Morgan and ING are joint bookrunners.

The Redwood City, Calif.-based data services company plans to use the proceeds to redeem all of its outstanding 4 7/8% senior notes due 2020 and for general corporate purposes, which may include debt repayment, capital expenditures, working capital and acquisitions of complementary businesses or assets.

Garfunkelux FRN

Austrian debt collector Garfunkelux plans to price €415 million of senior secured floating-rate notes due 2023 on Wednesday.

Credit Suisse has the books.

Proceeds will be used to redeem all of the company's existing floating-rate secured notes.

Iceland Foods sterling deal

Iceland Topco Ltd., the parent of Iceland Foods Ltd., plans to price a £630 million two-part offering of senior secured notes on Thursday.

The deal is coming in the form of a £430 million amount of 7.5-year notes and a £200 million amount of 10-year notes.

HSBC is the bookrunner.

The proceeds are expected to be used, together with cash on hand, to fully redeem the existing senior secured floating rate notes due 2020 and the existing 6¼% senior secured notes due 2021.

Slow return expected

The lack of any new dollar-denominated pricings on the first day back after the holiday break was no real surprise – a trader said that it was pretty much expected that the new-issue market would be “slow out of the gate” after its long layoff (the last dollar-denominated junk-bond pricing from a domestic or industrialized-country issuer was back on Aug. 18, when Chicago-based financial services company Enova International Inc. came to market with a $250 million offering of 8½% notes due 2024, which priced at par in a regularly scheduled forward calendar transaction).

He suggested that “there may be a few drive-bys this week – but things promise to be fast and furious next week.”

Overall, he said, Tuesday’s market “did not see a lot of price-movement action, and not a ton of volume.”

He explained that coming off the holiday break “everyone was just getting back in, trying to figure out what they want to do and where they want to be.”

However, at another desk, a trader said that “things were not that quiet – they were actually pretty busy. He estimated overall junk market volume at around $4 billion, with round-lot trading accounting for perhaps $1.6 billion of that, with the remainder in smaller odd-lot dealings.

The day’s round-lot trading handle was around four times Friday’s volume of around $425 million, and was on a par with the activity level seen last Thursday.

Tesla again trades around

Among specific issues, Tesla’s 5.3% notes due 2025 occupied a familiar position high atop the junk market’s Most Actives list, with over $37 million having changed hands during the session.

Several traders saw those bonds down around ¾ point on the day, finishing at the 98 bid level.

The Palo Alto, Calif.-based electric car manufacturer and power storage technology company’s $1.8 billion megadeal priced at par back on Aug. 11 as a regularly scheduled forward calendar offering, after upsizing from an originally announced $1.5 billion size – but the bonds struggled almost from the get-go when they were cleared for secondary dealings, getting gradually hammered down to around a 97ish handle before starting to rebound and push back upward.

On Friday, the Tesla notes had closed just below the 99 mark – before losing their upside momentum in Tuesday trading.

Restaurant Brands stays busy

A trader said that “another active issue” on Tuesday was the Restaurant Brands, Inc.5% senior secured notes due 2025.

A market source said that more than $11 million of those notes were moving around, placing the credit high up on the actives list.

“That one always does trade a lot,” agreed a trader at another desk.

The notes were being quoted going out at 102½ bid, down around ½ point from Friday’s finish at 103 bid.

The Oakville, Ont.-based operator of Burger King, Tim Hortons and Popeyes Louisiana Kitchen fast-food chains priced $1.3 billion of those notes at par on Aug. 8, after the quickly shopped deal was upsized from $1 billion originally.

The bonds were initially little changed when they hit the aftermarket – but in the intervening several weeks since then, they have managed to grind their way up to highs around 103 bid at the tail end of last week.

Indicators turn mixed

Statistical market performance measures turned mixed on Tuesday, after having finished higher across the board for three straight sessions on Wednesday, Thursday and Friday. They had also been mixed last Tuesday, after having been up for the three straight sessions before that.

The KDP Daily High Yield Index – which did not publish on Monday due to the junk market having been closed for Labor Day – rose by 8 basis points Tuesday to end at 72.20, its ninth consecutive gain after five straight losses before. It had also firmed by 5 bps on Friday.

It yield came in by 3 bps, to 5.16%, its sixth straight narrowing. The yield had tightened by 2 bps on both Thursday and Friday.

But the Markit CDX Series 28 High Yield Index lost nearly 11/32 point Tuesday to finish at 107 1/32 bid, 107 1/16 offered, its second successive loss after three gains in a row. The index had eased marginally on Monday – when it did publish, despite the holiday break – after having risen by 5/32 point on Friday.

The Merrill Lynch North American High Yield Index firmed by 0.003% on Tuesday, its fifth straight gain after one loss and six straight gains before that. It had also improved by 0.052% on Monday, when it was published despite the holiday market close, and had moved up by a nearly identical 0.051% on Friday.

The latest gain raised the index’s year-to-date return to 6.205% from 6.202% on Monday and 6.147% on Friday. It remained down a little from its peak year-to-date level of 6.233%, set back on Aug. 2.

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