Primary prices $7.35 billion in 10 tranches; Univision active; Party City gains

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 10 – A massive Monday in the high-yield new issue market saw six issuers bring a total of 10 tranches of dollar-denominated junk, combining to issue a face amount of $7.35 billion.

All six issuers appeared at the drive-through window.

Executions were solid or better, with eight of the 10 tranches coming at the tight- or rich ends of talk, while the other two came in the middle of talk.

Two of the six issuers upsized their deals. Those two just happened to be the session's biggest issuers.

T-Mobile US, Inc. upsized to $3 billion from $2 billion, as it priced notes in three add-on tranches (Ba3/BB), all of them pricing rich to talk.

DISH DBS Corp. priced an upsized $1.5 billion issue (from $1.25 billion) of 5 1/8% eight-senior senior bullet notes (B2/B-) at par, at the tight end talk.

Meanwhile, the secondary space launched the week on soft footing.

While the space “leaked” throughout the day, volume remained light as market players eyed the new deals in the pipeline, a source said.

New paper continued to dominate the tape and remained well bid as accounts continued to seek out yield in new issues.

Univision Communications Inc.’s 4½% senior secured notes due 2029 (B1/B+) continued to gain in active trading during Monday’s session.

Outside of recent issues, Party City Holdings Inc.’s capital structure saw a boost following better-than-expected earnings with its junk bonds up 2 to 3 points.

Primary prices 10 tranches

A massive Monday in the high-yield new issue market saw six issuers bring a total of 10 tranches of dollar-denominated junk, combining to issue a face amount of $7.35 billion.

All six issuers appeared at the drive-through window.

Executions were solid or better, with eight of the 10 tranches coming at the tight- or rich ends of talk, while the other two came in the middle of talk.

Two of the six issuers upsized their deals. Those two just happened to be the session's biggest issuers.

T-Mobile US, Inc. upsized to $3 billion from $2 billion, as it priced notes in three add-on tranches (Ba3/BB), all of them pricing rich to talk.

An $800 million add on to the 2¼% senior notes due Feb. 15, 2026 priced at 100.25 to yield 2.18%.

A $1.1 billion an add-on to the 3 3/8% senior notes due April 15, 2029 priced at 101.00 to yield 3.153%.

A $1.1 billion add-on to the 3½% senior notes due April 15, 2031 priced at 101.00 to yield 3.355%.

The 2026 notes were heard to be playing to $2 billion of demand, a trader said, adding that there was $2.4 billion in the book for the 2029 notes and $2.3 billion for the 2031 notes.

There was a small amount of reverse inquiry, the trader added.

Meanwhile DISH DBS Corp. priced an upsized $1.5 billion issue (from $1.25 billion) of 5 1/8% eight-senior senior bullet notes (B2/B-) at par, at the tight end talk.

The deal was heard to be half done in reverse inquiry, and played to an order book that was two-times oversubscribed, a trader said.

While drive-by business dominated that session's activity there was also a build-up in the active new issue calendar (see related stories in this issue).

$193 million Friday outflows

The dedicated high-yield bond funds sustained $193 million of net outflows on Friday, the most recent session for which data was available at press time, according to a market source.

High-yield ETFs sustained $243 million of outflows on the day.

However actively managed high yield funds were positive on the day, posting $50 million of inflows on Friday, the source said.

Univision firms

Univision’s 4½% senior secured notes due 2029 continued to gain in active trading on Monday following a strong break.

The notes were changing hands in the 101 to 101½ context heading into the market close after opening the day at par ¾ bid, 101¼ offered.

“They’re a little firmer,” a source said.

There was more than $36 million in reported volume during the session.

The notes were wrapped around 101 after breaking for trade on Friday.

Univision priced a $1.05 billion issue of the 4½% notes at par on Friday. Pricing came tighter than talk for a yield in the 4¾% area.

Party City gains

Party City’s capital structure gained in active trading on Monday after a better-than-expected earnings report.

While volume was light, Party City’s 5¾% senior notes due 2025 rose 2¾ points to close the day at 95.

The retail chain’s 8¾% senior notes due 2026 gained 2 points to close the day at 105¼.

The notes were active with more than $18 million in reported volume.

Party City’s capital structure was on the rise after better-than-expected earnings and upbeat guidance.

Party City reported adjusted EBITDA of $32.4 million for the first quarter and forecast adjusted EBITDA of $60 million to $70 million in the second quarter.

Indexes mixed

Indexes were mixed at the start of the week.

The KDP High Yield Daily index rose 2 points to close Monday at 69.79 with the yield now 3.81%.

The index posted a cumulative gain of 15 points on the week last week.

The ICE BofAML US High Yield index gained 5.4 bps with the year-to-date return now 2.347%.

The index posted a cumulative gain of 18.2 bps on the week last week.

The CDX High Yield 30 index dropped 25 bps to close Monday at 109.6.

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