Morning Commentary: Antero, Springleaf bring drive-bys; Mednax tap trades to premium

By Paul A. Harris

Portland, Ore., Feb. 20 – High-yield bond dealers set the stage for a pair of drive-bys as the Wednesday session got underway.

Both offerings were scheduled to be shopped by means of late-morning conference calls with investors.

Antero Midstream Partners LP plans to price a $600 million offering of eight-year senior notes (confirmed B3/ existing BB+/BBB-).

Initial price talk has the deal coming to yield in the 5¼% area, a buyside source said.

J.P. Morgan Securities LLC, Wells Fargo Securities LLC, BofA Merrill Lynch, Capital One Securities Inc., Citigroup Global Markets Inc. and Credit Agricole CIB are the joint bookrunners.

The Denver-based limited partnership plans to use the proceeds to pay down bank debt.

Meanwhile Springleaf Finance Corp. plans to price a $500 million public offering of five-year senior bullet notes (existing ratings Ba3/BB-).

Left lead bookrunner Barclays will bill and deliver.

Proceeds will be used to redeem the Springleaf Finance 5¼% senior notes due December 2019.

Mednax trades up

Looking to Tuesday's deals, the split-rated Mednax, Inc. $500 million add-on to its 6¼% senior notes due Jan. 15, 2027 (Ba2/BBB-) were trading a point higher Wednesday morning at 100.75 bid, 101.25 offered.

The upsized $500 million (from $200 million) issue priced at 99.75 on Tuesday, on the high-yield desk, playing to high quality junk accounts, crossover investors and investment-grade accounts, sources said.

The new XPO Logistics, Inc. 6¾% senior notes due August 2024 (Ba3/BB) were trading Wednesday at a more modest premium: par 1/8 bid, par 3/8 offered.

The $1 billion issue priced at par, 12.5 basis points beyond the wide end of the 6½% to 6 5/8% yield talk.

The Greenwich, Conn.-based provider of supply chain solutions has been in the news since warning last week that it lost its biggest customer, assumed to be Amazon.com, Inc., which has undertaken a venture to in-house some supply chain needs.

High-yield ETFs were posting modest gains on Wednesday morning, in line with equities. The iShares iBoxx $ High Yield Corporate Bd (HYG) was up a dime, or 0.12%, at $85.53 per share.

Tuesday inflows

The daily cash flows of the dedicated high-yield bond funds were positive on Tuesday, a trader said.

High-yield ETFs saw $316 million of inflows on the day.

Actively managed high-yield funds saw $100 million of inflows on Tuesday.

With only Wednesday’s numbers pending, for the first four sessions of the current weekly reporting period now in the book, the combined funds are tracking weekly inflows of $400 million, the trader said.

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