Morning Commentary: Cvent, Iqvia on deck in junk primary; First Quantum, XPO struggle

By Abigail W. Adams

Portland, Me., May 18 – The domestic high-yield primary market remained active on Thursday with two bond offerings slated to price during the session.

Capstone Borrower Inc. is set to clear from the forward calendar its offering of seven-year senior secured notes (B2/B-/BB) backing Blackstone’s acquisition of Cvent Holding Corp.

Firmed pricing has the deal coming at par to yield 8%.

The deal was downsized to $400 million from $500 million with proceeds shifted to a concurrent term loan.

While downsized in favor of the term loan, the offering was heavily oversubscribed, a source said.

Iqvia Holdings Inc. is also in the market with a drive-by offering of $500 million seven-year senior notes (Ba2/BB), which is whispered with a yield in the mid to high 6% area, a source said.

The notes are coming alongside a $500 million tranche of investment-grade rated senior secured notes that is being guided at Treasuries plus 225 basis points to 237.5 bps.

Meanwhile, it was a flat open for the secondary space with risk appetite weak.

The pace of bids-wanted-in-competition lists slowed after outpacing offers-wanted-in-competition lists nearly 5 to 1 on Tuesday.

However, exchange-traded funds remained sellers and continued to circulate BWICs early Thursday.

The deals that priced during Wednesday’s session continued to struggle in the aftermarket following weak breaks.

First Quantum Minerals Ltd.’s new 8 5/8% senior notes due 2031 (B+/B+) continued to move lower in early trade.

The notes were marked at 99¼ bid, 99½ offered.

They were trading in the 99½ to 99¾ context heading into Wednesday’s close.

The mining company priced an upsized $1.3 billion, from $1 billion, issue of the 8 5/8% notes at par in a Wednesday drive-by.

While the notes struggled in the secondary, the deal played to decent demand during book building with pricing coming at the tight end of talk for a yield in the 8¾% area, which tightened from early guidance in the 9% area.

XPO Inc.’s secured and unsecured tranches were also lagging their issue price in secondary activity with both trading on a 99-handle.

The 6¼% senior secured notes due 2028 (Ba1/BBB-/BBB-) were marked at 99 bid, 99½ offered and the 7 1/8% senior notes due 2031 (Ba3/BB-/BB+) were marked at 99¼ bid, 99¾ offered in early trade, according to a market source.

XPO priced an $830 million tranche of 6¼% secured notes and a $450 million tranche of the 7 1/8% notes at par in a Wednesday drive-by.

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