Morning Commentary: XPO Logistics on deck; Wednesday’s two new deals trade above issue prices

By Paul A. Harris

Portland, Ore., Aug. 14 – A pair of issues that priced on Wednesday – the first deals of the Aug. 11 week – were both trading above their reoffer prices on Thursday morning, according to a trader on the East Coast of the United States.

The American Eagle Energy Corp. 11% senior secured notes due 2019 (Caa1/CCC) were trading in a 99 7/8 bid, par offered context, according to the trader. The $175 million issue came at 99.059 to yield 11¼% late Wednesday via GMP Securities.

The late pricing of the American Eagle Energy deal came about due to the fact that books remained open late in the day for accounts on the West Coast of the United States.

Meanwhile the Gulfport Energy Corp. tack-on to its 7¾% senior notes due Nov. 1, 2020 (B3/B-) was up smartly at 107 bid, 107¼ offered based on late-Wednesday trading, said the trader, who could not see evidence that those bonds had traded yet on Thursday heading into the mid-morning.

The Credit Suisse-led deal, which was upsized to $300 million from $250 million, priced at 106 to yield 6.106%. Notably it came at the rich end of the 105.75 to 106 price talk, which had richened from the 105.5 area initial guidance during the brief time the drive-by deal was in market, according to a trader.

XPO Logistics on deck

As the Thursday session got underway only one prospective issuer was on deck with a deal expected to clear before the session’s close.

XPO Logistics, Inc. is in the market with a $500 million offering of five-year senior notes (B1/B-).

On Wednesday the deal was talked to yield 7 7/8% to 8 1/8%.

Pricing is set for Thursday afternoon.

Credit Suisse, Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are the joint bookrunners.

Meanwhile players in the leverage markets wait with more than a little interest for Lipper-AMG to make its weekly fund flows report, expected later Thursday.

Last week’s $7.1 billion outflow from dedicated high-yield funds set a new record for negative flows, easily topping the previous record, a $4.63 billion outflow that occurred in the week that ended on June 5, 2013.

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