June opens with Global Partners drive-by; calendar builds; new Altice busy

By Paul A. Harris and Paul Deckelman

New York, June 1 – The month of June opened on a quiet note in the new-deal arena on Monday, with just one transaction seen having priced – a quickly shopped $300 million eight-year offering from midstream energy company Global Partners LP. The issue appeared too late in the session for any meaningful aftermarket activity.

The day’s new-issue total was a far cry from the busy sessions seen on Friday, when some $2.27 billion of new U.S.-dollar-denominated and fully junk-rated paper from domestic or industrialized-country borrowers had come to market in two deals totaling four tranches, or Thursday, when $4,945,000,000 from five issuers got done in six tranches, according to data compiled by Prospect News.

There was busy trading activity on Monday in some of that new paper.

The several tranches of new paper that European cable and broadband operator Altice SA had brought to market in a megadeal-sized offering via three separate issuing subsidiaries were seen trading higher all around, on active volume for each.

There was also brisk trading, at better levels, in the recent issues from CommScope Holding Co., Inc. and MarkWest Energy Partners, LP.

But last week’s new issue from SandRidge Energy, Inc. continued to trade off.

Away from the deals that have actually priced, high-yield syndicate sources heard that marketing campaigns were getting underway by prospective junk issuers XPO Logistics, Inc., Cable ONE, Inc. and Harsco Corp.

Informatica Corp. was heard to have downsized its offering of eight-year notes, which were expected to hit the market on Tuesday.

Statistical market-performance measures were mixed for a third consecutive session on Monday. They had first turned mixed on Thursday after having been higher all around on Wednesday. Monday was the sixth mixed session during the last seven trading days.

Global Partners drives by

Monday's primary market saw a single deal price.

Global Partners priced a $300 million issue of eight-year senior notes (B2/B+) at par to yield 7% in a quick-to-market transaction.

The yield printed at the wide end of the 6¾% to 7% yield talk.

BofA Merrill Lynch, J.P. Morgan, Wells Fargo, SG and MUFG were the joint bookrunners for the debt refinancing.

Informatica downsizes, sets talk

Informatica downsized its offering of eight-year senior notes (Caa2/CCC+) to $650 million from $750 million and upsized the term loan to $1,705,000,000 from $1,605,000,000.

The notes were talked to price with a yield in the 7¼% area and are set to allocate on Tuesday.

Goldman Sachs is the left bookrunner. BofA Merrill Lynch, Credit Suisse, Macquarie Capital, Morgan Stanley, Nomura, RBC and Deutsche Bank are the joint bookrunners for the notes offer.

XPO roadshows $2 billion

XPO Logistics began an international roadshow on Monday in London for a $2 billion equivalent offering of senior notes (B1/B) that will come in four tranches.

The acquisition financing deal is expected to price late in the present week.

The Greenwich, Conn.-based provider of transportation logistics services is offering sterling-denominated five-year fixed-rate notes with two years of call protection.

In addition, the company is selling euro-denominated five-year floating-rate notes with one year of call protection and euro-denominated six-year fixed-rate notes with 2.5 years of call protection.

For the sterling- and euro-denominated tranches, JPMorgan is the left bookrunner and will bill and deliver.

The deal also features a dollar-denominated tranche of seven-year fixed-rate notes with three years of call protection. Morgan Stanley is the left bookrunner for the dollar-denominated tranche, for which it will bill and deliver.

Tranche sizes remain to be announced.

JPMorgan and Morgan Stanley are the global coordinators. Citigroup, Credit Suisse and Deutsche Bank are the joint bookrunners.

Cable ONE this week

Cable ONE plans to price $450 million of seven-year senior notes (expected ratings B1/BB) on Wednesday.

JPMorgan and Wells Fargo are the joint bookrunners.

Proceeds, together with cash on hand, will be used to pay a special one-time cash dividend to Graham Holdings Co. in connection with the spinoff of Cable ONE from Graham Holdings.

Harsco starts roadshow

Harsco started a roadshow on Monday in New York City for a $250 million offering of five-year senior notes (existing ratings Ba1/BB).

The deal is expected to price on Wednesday.

Citigroup, Credit Suisse, HSBC, JPMorgan, MUFG, RBC and US Bancorp are the joint bookrunners.

The Camp Hill, Pa.-based industrial services and engineered products company plans to use the proceeds to fund the concurrent tender for its senior notes due 2015, with any remaining proceeds to be used to repay revolver debt and for general corporate purposes.

Global Partners deal unseen

In the secondary realm, traders did not see any immediate aftermarket activity in the new Global Partners drive-by offering of eight-year notes.

They cited the late hour at which the Waltham, Mass.-based midstream energy logistics and marketing company’s deal came to market.

SandRidge slide continues

A trader described Monday’s session – the first for the new month of June – as “kind of a ho-hum type of day.”

He said the main feature of the market was trading in the issues that came to market last week.

Chief among these was SandRidge Energy’s 8¾% senior secured second-lien notes due 2020, which priced on Thursday.

A market source said that over $62 million of those notes changed hands on Monday, making it the busiest credit In Junkbondland.

The Oklahoma City-based oil and natural gas exploration and production company’s quick-to-market $1.25 billion offering had priced at par after the issue was upsized from an originally planned $1 billion.

But after initially trading around their issue price, the bonds slid on Friday – and they continued to drop on Monday.

One trader quoted them down at least 1 point on the day at 98 3/8 bid – but others in the market saw the issue doing even worse than that.

Another pegged them at 97½ bid, well down from their 99-handle levels seen on Friday.

And an even more bearish market source located the bonds as low as 96¾ bid, calling that a nearly 2½-point fall.

Recent deals trade busily

A number of last week’s other new issues also saw active volume on Monday.

All three tranches of the new Altice notes that the Luxembourg-based cable, broadband and voice service company is issuing to help fund its acquisition of 70% of U.S. cabler SuddenLink Commuications were heard by traders to have been fairly busy.

One said that the 5 3/8% senior secured notes due 2023 issued by the company’s Altice US Fin I Corp. financing subsidiary “was active around 100¾ bid,” up from the par level at which that $1.1 billion tranche of bonds had priced, as part of Altice’s overall $1.72 billion three-part regularly scheduled forward calendar transaction.

At another desk, those bonds were also quoted at 100 ¾, although that was down by ¼ point from their earlier levels around 101 bid. Over $47 million of those notes changed hands.

The 7¾% notes due 2025 issued by holdco Altice US Fin II Corp. were seen by one trader to have gotten as good as 101½ bid, up from the par level at which that $300 million of the notes priced on Friday.

A second trader also said the bonds traded at 101½ bid, on volume of more than $29 million.

Another $320 million tranche of 7¾% notes due 2025 – this one from super holdco Altice US Fin SA – traded at 101¼ did, up from their par issue price, on over $17 million of turnover.

Thursday’s 4 7/8% notes due 2025 from Denver-based oil and gas E&P company MarkWest Energy Partners was little changed from Friday’s levels at 99 5/8 bid, a trader said, with over $12 million traded.

At another shop, those bonds were quoted in a 99¼-to-99¾ bid level up 1/8 point on the day.

That $1.2 billion drive-by deal had priced at 99.026 to yield 5%.

A trader saw CommScope’s 4 3/8% senior secured notes due 2020 unchanged on the day at 101 bid, with about $10 million traded.

A second trader saw the bonds at 101 bid, 101 3/8 offered, calling them up 3/8 point.

The Hickory, N.C.-based provider of communications infrastructure services had priced $500 million of those notes at par in a regularly scheduled deal.

He saw the other half of that transaction – $1.5 billion of 6% senior unsecured notes due 2025 – having moved up ¼ point to 101½ bid, 102 offered.

Indicators remain mixed

Statistical market-performance measures were mixed for a third consecutive session on Monday. They had first turned mixed on Thursday after having been higher all around on Wednesday. Monday was the sixth mixed session during the last seven trading days.

The KDP High Yield Daily index rose by 1 basis point to end the session at 71.5 after having lost 1 bp on Friday. Monday’s gain was its third such advance in the last four sessions.

Its yield came in by 1 bp on Monday to close at 5.31%, after having been unchanged on Friday and having ballooned out by 8 bps on Thursday.

The Markit Series 24 CDX North American High Yield index was up by 1/32 point on Monday to 107 3/32 bid, 107 1/8 offered, after having been unchanged on Friday and having retreated by 1/8 point on Thursday.

However, the Merrill Lynch North American Master II High Yield index meanwhile registered its first loss after six consecutive gains on Monday, declining by 0.03%. On Friday, it had firmed by 0.036%.

Monday’s loss lowered the index’s year-to-date return to 4.05% from Friday’s 4.062%, which was its fourth straight new peak level for the year.

© 2015 Prospect News.
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