High-yield bonds hang in as market prepares for short week; Time, Caesars price; Momentive files

By Stephanie N. Rotondo and Paul A. Harris

Phoenix, April 14 - The high-yield bond market was holding its ground on Monday as the market prepared for a shortened holiday week.

"I think it's going to be a slow week," a trader opined, noting that it was spring break and that Passover is Tuesday. Because of the Good Friday holiday, the market will be closed on Friday, which means players could be heading out early come Thursday.

Though there were "a few new deals pricing," the trader said, he further expected that the pipeline would stutter as the week wore on.

As for the secondary space, high-yield and distressed investors alike were keeping an eye on Momentive Performance Materials Inc., as the company filed for bankruptcy late Sunday.

The company is slated to launch a $570 million debtor-in-possession facility on Thursday.

Steady as she goes

Market indicators were little changed on Monday, even as the stock market looked to regain the previous week's losses.

Traders attributed the steadiness to the short week and the holidays it encompasses.

The KDP High Yield index was steady at 75.03, yielding 5.21%. The CDX North American High Yield index was up almost a quarter-point to 106 11/16 bid, 106 13/16 offered, according to a market source.

Time up, Caesars soft

The primary space saw a few new deals hitting the tape, including a $700 million offering of 5¾% senior notes due 2022 from Time Inc.

One trader said the deal was doing fairly well, quoting the issue at 101 bid, 101½ offered.

Another source placed the issue at 101 bid, 101 3/8 offered.

However, a $675 million sale of 9 3/8% second-priority senior secured notes due 2022 from Caesars Growth Properties LLC was not faring as well.

A trader said the paper was trading "right around par, maybe a little lower. So that one is struggling a little bit."

A second source saw the debt in a 99 5/8 to par context.

Time upsizes deal

In the dollar market, three issuers completed single-tranche deals to raise a combined total of $1.53 billion.

One of the deals was upsized while another came as a drive-by.

One deal priced at the rich end of price talk, and the other two came in the middle of talk.

Time Inc. priced the upsized $700 million issue (B1/BB) at par to yield 5¾%.

The yield printed on top of yield talk.

Away from the dealer, the deal was trading in the context of 101 1/8 bid, 101 5/8 offered, another trader said.

Joint global coordinator and joint bookrunner Barclays will bill and deliver. Joint global coordinator and joint bookrunner Citigroup coordinated the roadshow.

BNP Paribas, BofA Merrill Lynch, J.P. Morgan, Morgan Stanley and Wells Fargo were also joint bookrunners.

The New York-based publishing company plans to use the proceeds to fund the purchase of Time Warner's publishing operations in the United Kingdom, to fund a special dividend to Time Warner and for general corporate purposes.

The bond deal was upsized by $200 million, to $700 million from $500 million, with the downsizing of the concurrent term loan by the same amount, to $700 million from $900 million.

Caesars prices mid-talk

Caesars Growth Properties' $675 million issue of eight-year second-priority senior secured notes (Caa2/B-) priced at par to yield 9 3/8%.

The yield printed in the middle of the the 9¼% to 9½% yield talk.

The fully bridged deal was three times to four times oversubscribed, a trader said.

Citigroup, Credit Suisse, Deutsche Bank, UBS, J.P. Morgan, Morgan Stanley, Macquarie and Nomura were the joint bookrunners for the acquisition deal.

Parsley taps 7½% notes

Parsley Energy, LLC and Parsley Finance Corp. priced a $150 million tack-on to their 7½% senior notes due Feb. 15, 2022 (Caa2/CCC) at 1040 to yield 6.657%.

The reoffer price came at the rich end of the 103.75 to 104 price talk.

Credit Suisse and Morgan Stanley were the joint bookrunners.

The private energy exploration and production company plans to use the proceeds to repay its revolver and for general corporate purposes.

Numericable's €6.04 billion

On Monday, the market saw the rollout of proposed benchmark issuance in several tranches of dollar- and euro-denominated notes related to the merger of cable operator Numericable and mobile phone company SFT.

Numericable began a roadshow on Monday in Europe for €6.04 billion-equivalent of first-lien notes coming to market in six tranches.

The deal includes €500 million and $920 million tranches of five-year notes and €1 billion and $2 billion tranches of eight-year notes.

The long bonds are 10-year notes that are being sold in tranches sized at €1 billion and $2 billion.

The deal is expected to price on April 23.

Global coordinator J.P. Morgan will bill and deliver. Deutsche Bank and Goldman Sachs are also global coordinators.

For the euro-denominated notes, Barclays, BNP Paribas, Credit Agricole-CIB, Credit Suisse, Morgan Stanley, ING, Banca IMI and Natixis are the bookrunners.

For the dollar-denominated notes, Barclays, BNP Paribas, Credit Agricole-CIB, Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. and ING are the bookrunners.

Proceeds will be used to fund the purchase of SFR.

Altice eight-year notes

Altice started a roadshow on Monday in London for a €4.15 billion-equivalent offering of eight-year senior notes, which are being sold in dollar- and euro-denominated tranches.

The syndicate of underwriters also includes Barclays, BNP Paribas, Credit Agricole CIB, Credit Suisse, Morgan Stanley, ING and Natixis.

CCG eight-year notes

Paris-based geoscience company CCG SA (Ba3/B+) began marketing a €360 million offering of senior notes due 2020 at a group meeting with investors on Monday in Paris.

A meeting is scheduled for Tuesday in London.

BNP Paribas and Credit Suisse are global coordinators and joint bookrunners. Credit Agricole CIB, HSBC, Natixis and SG CIB are also joint bookrunners.

The company plans to use to proceeds to repurchase €360 million of Oceane convertible bonds due 2016, with remaining net proceeds, if any, to repay other debt.

Momentive files

Momentive Performance filed for Chapter 11 protections on Sunday, a move that was largely expected by the markets.

But while the filing was expected, that didn't stop investors from pressuring the company's debt.

A trader said the 8 7/8% first-priority senior secured notes due 2020 and the 10% senior secured notes due 2020 were slightly weaker at 108½ bid, 109 offered.

He noted that the issues were still trading with accrued interest because "people are expecting them to get taken out, so you will get your accrued interest."

However, the 9% second-priority senior secured notes due 2021 were trading flat, or without accrued interest. The trader pegged that issue at 79, down from an intra-day high around 83.

With assets of $2.69 billion and debt of $4.17 billion, the specialty chemicals manufacturer has not posted a profit since its 2006 leveraged buyout by Apollo Global Management LLC.

The debt incurred in the LBO made the company especially susceptible to market fluctuations.

The company hopes to eliminate as much as $3 billion in debt via the bankruptcy court.

Albany, N.Y.-based Momentive is scheduled to launch a $570 million DIP facility on Thursday. JPMorgan Securities LLC is the lead arranger.

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