Morning Commentary: CNO Financial, Neiman Marcus on tap; Frontier jumps on asset sale

By Abigail W. Adams

Portland, Me., May 29 – While volatility continued to roil capital markets, the domestic high-yield primary market continued to roll out new deals with two expected to price during Wednesday’s session.

CNO Financial Group Inc. is planning to price its $425 million offering of 10-year senior notes (Baa3/BB+/BB+) following the conclusion of a brief roadshow.

The deal is whispered to come with a yield in the low to mid 5% area, a source said. Official price talk has yet to surface.

Neiman Marcus Group Ltd. LLC’s $550 million offering of five-year second-lien notes is also expected to price shortly, a market source said. While the deal may get pushed to Thursday’s business, sources were expecting it to come during the Wednesday session.

The deal was initially expected to clear the forward calendar last week.

Early guidance for the deal remains a blended 14% coupon comprised of an 8% cash payment and a 6% PIK payment.

Official price talk has yet to circulate the market.

Meanwhile, the secondary space was soft early in Wednesday’s session with equities continuing to sell off amid jitters caused by the escalation in the trade war between the United States and China and the continued decline in crude oil futures.

However, Frontier Communications Corp.’s capital structure was making gains after news broke that the telecommunications company sold its assets and operations in four states.

Frontier’s 10½% senior notes due 2022 gained 3 points to change hands to 71½ on the news.

The 11% senior notes due 2025 gained 2 points to trade at 64½ early Wednesday, a market source said.

Frontier announced on Wednesday that it was selling its operations and assets in Washington, Oregon, Idaho and Montana to WaveDivision Capital LLC and Searchlight Capital Partners LLC for $1.352 billion.

The sale was seen as a positive that will increase the company’s liquidity, a source said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.