TerraForm drives by; Viper Energy prices; Acrisure adds; new notes lower; Sprint better

By Paul A. Harris and James McCandless

Portland, Ore., Oct. 10 – The high-yield primary was active on Thursday with more new issuance expected for Friday.

TerraForm Power Operating, LLC brought $700 million in a drive-by.

Viper Energy Partners LP wrapped a roadshow, bringing an upsized $500 million to market.

And, Acrisure, LLC and Acrisure Finance, Inc. added on $200 million.

In the secondary, mewer notes priced by Scotts Miracle-Gro Co. and AerCap Holdings NV trended negative during the session.

In retail, L Brands, Inc.’s paper diverged amid reports of corporate layoffs in the company’s embattled Victoria’s Secret segment.

Mobile network name Sprint Corp.’s notes performed better after a state attorney general dropped out of a challenge to its merger with T-Mobile.

TerraForm, Viper and Acrisure

An active Thursday session in the primary market saw TerraForm Power Operating, LLC price a $700 million issue of 10.25-year senior notes (Ba3/BB-/BB) at par to yield 4¾% in a drive-by.

The yield printed in the middle of yield talk in the 4¾% area, and tight to early guidance in the high 4% area.

Elsewhere, in a deal that ran a roadshow, Viper Energy Partners LP was heard to be playing to a big book as it priced an upsized $500 million issue of eight-year senior notes (B1/BB+/BB-) at par to yield 5 3/8%.

The issue size increased from $400 million.

The yield printed in the middle of the 5¼% to 5½% yield talk, and tight to initial guidance in the mid-to-high 5% area.

The deal had been heard to be playing to $2 billion of demand, according to a bond trader who spotted the new Viper Energy 5 3/8% notes at 101 3/8, 101 7/8, late Thursday afternoon.

And Acrisure, LLC and Acrisure Finance, Inc. priced a $200 million add-on to their 8 1/8% senior secured notes due Feb. 15, 2024 (existing ratings B2/B) at 106 to yield 6½%.

The reoffer price came at the rich end of the 105.5 to 106 price talk, and rich to initial price talk of 105 to 105.5.

Friday's tranches

Friday's session figures to be an active one.

On Thursday EG Group set price talk in its €1.26 billion equivalent two-part offering of six-year senior secured notes (B2/B/B+).

The deal features dollar-denominated notes talked to yield 8½% to 8¾%, and euro-denominated notes talked to yield 6¼% to 6½%

Tranche sizes remain to be determined.

Early Thursday afternoon the dollar-denominated portion of the deal was heard to be playing to $800 million of demand, a bond trader said.

Elsewhere, Netherlands-based producer of fertilizers and chemicals OCI NV set tranche sizes and price talk on its cross-border offering of five-year senior secured notes (Ba3/BB/BB).

The deal features $500 million of notes talked to yield 5¼% to 5½%, and €500 million talked to yield in the 3¼% area.

Initial talk on the dollar-denominated tranche has the notes coming to yield in the low 5% area, a trader said, and added that early Thursday morning the deal was heard to be playing to around $150 million of orders.

Orders for the euro-denominated notes were showing much stronger demand, with around €600 million in the book, the trader said.

Newer notes off

Newer notes were trending negative in Thursday’s session, traders said.

Marysville, Ohio-based lawn and garden name Scotts Miracle-Gro’s new 4½% senior notes due 2029 dropped ¼ point to close at 100 bid.

The deal priced on Tuesday and was upsized to $450 million.

Dublin-based aircraft leasing company AerCap’s recent 5 7/8% resettable junior subordinated notes due 2079 declined by 1¾ points to close at 102¼ bid.

The Oct. 3 issue came to market at $750 million.

L Brands flat, up slightly

Retail name L Brands’ paper diverged, traders said.

The 7½% senior paper due 2029 held level at 99¾ bid. The 6 7/8% senior paper due 2035 picked up 1 point to close at 86¼ bid.

News broke on Thursday that the Columbus, Ohio-based retailer has cut 15 percent of its corporate staff.

Concurrently, the executive vice president and head of stores at its Victoria’s Secret arm has resigned.

In its most recent earnings report, the company reported lukewarm results for a majority of its holdings with Victoria’s Secret lagging the most.

Sprint better

In telecom, Sprint’s notes saw a better day, market sources said.

The 7 7/8% senior notes due 2023 rose ½ point to close at 111 bid. The 7 5/8% senior notes due 2026 improved by ¾ point to close at 111½ bid.

The Overland Park, Kan.-based mobile phone network provider’s structure was bolstered by news that Jim Hood, the attorney general of Mississippi, decided to withdraw from a 17-state lawsuit against the name over its proposed merger with T-Mobile.

“We will probably see a domino effect with more states dropping out over the next few weeks,” a trader said.

The company’s merger agreement is set to expire on Nov. 1 barring a completed deal or an extension.

$1.5 billion outflows on week

The dedicated high-yield bond funds sustained $1.5 billion of outflows on the week to Wednesday's close, according to information posted on the internet by Lipper US Fund Flows.

The outflow follows the previous week's $198 million of net inflows.

Indexes

The KDP High Yield Daily index tacked on 1 basis point on Thursday, finishing the session at 71 with the yield remaining at 5.64%.

The index added 2 bps on Wednesday, fell 12 bps on Tuesday and gained 4 bps on Monday.

The ICE BofAML US High Yield index gained 6.4 bps with the year-to-date return now at 11.078%.

The index garnered 11.7 bps on Wednesday, declined by 17.6 bps on Tuesday and rose 5.1 bps on Monday.

The CDX High Yield 30 index moved up 35.83 bps to 106.3065.

The index rose 36.32 bps on Wednesday, lost 36.75 bps on Tuesday and declined by 36 bps on Monday.

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