ESAB, MGM drive-by; forward calendar balloons; Bombardier, TIH at a premium; Hilton softer

By Abigail W. Adams

Portland, Me., March 25 – The domestic and euro-denominated junk primary markets saw a strong flow of activity on Monday as issuers continued to rush to the market post-Fed.

The dollar-denominated market saw two drive-by deals price and four more join the forward calendar.

Four euro-denominated and one sterling-denominated offerings also joined the calendar.

In drive-by action, MGM Resorts International priced a $750 million offering of eight-year senior notes (B1/BB-/BB-), and ESAB Corp. priced an upsized $700 million offering of five-year senior notes (Ba1/BB+).

AMC Networks Inc., Algoma Steel Inc., New Home Co. Inc. and Phinia Inc. also joined the calendar with dollar-denominated offerings.

Meanwhile, it was a sideways day in the secondary space with the cash bond market either side of unchanged.

The market remained laser focused on new issues.

Panther Escrow Issuer, LLC and Panther Co-Issuer, Inc.’s 7 1/8% senior secured notes due 2031 (B2/B/B+), which priced to back the buyout of TIH, LLC, were the outperformers of the deals to price last Friday.

Bombardier Inc.’s 7¼% senior notes due 2031 (B2/B) were also trading at a decent premium to their discounted issue price.

However, Hilton Worldwide Holdings Inc.’s two tranches of senior notes were slightly softer in active trade, although they remained above water.

Drive-bys

The drive-by window was open on Monday with two issuers pricing deals.

ESAB priced an upsized $700 million, from $600 million, offering of five-year senior notes (Ba1/BB+) at par with a coupon of 6¼%.

Pricing came at the tight end of talk for a yield of 6¼% to 6½%. Early guidance was for a yield in the 6½% to 6¾% area.

MGM priced a $750 million offering of eight-year senior notes (B1/BB-/BB-) at par to yield 6½%.

Pricing came at the midpoint of talk for a yield in the 6½% area, according to a market source.

Early guidance was for a yield in the 6¾% area.

The calendar

AMC Networks started a roadshow on Monday for a $700 million offering of senior secured notes due January 2029 with early guidance for a yield in the high 10% area, according to a market source.

The roadshow will run through Tuesday with pricing expected thereafter.

Algoma Steel plans to price $350 million of five-year senior secured second-lien notes (B3/B/BB-) on Tuesday with early guidance for a yield in the 9½% area, according to a market source.

New Home Co. plans to price $325 million of long five-year senior notes (B2/B-) on Wednesday with early guidance for a yield in the 8¾% to 9% area, according to a market source.

Phinia started a roadshow on Monday for a $425 million offering of five-year senior secured notes with early guidance in the low 7% area.

The roadshow will run through Wednesday with pricing expected thereafter.

TIH outperforms

Panther Escrow’s 7 1/8% senior secured notes due 2031 backing the buyout of TIH were the outperformers of the deals to price last Friday.

The notes broke above a par-handle in heavy volume and were trading in the par 7/8 to 101 1/8 context heading into the market close, a source said.

There was $160 million in reported volume.

Panther Escrow priced an upsized $3 billion, from $2.75 billion, issue of the 7 1/8% notes at par on Friday.

The yield printed in the middle of the 7% to 7¼% yield talk. Initial talk was in the 7¼% area.

Bombardier at a premium

Bombardier’s new 7¼% senior notes due 2031 were holding a decent premium to their discounted issue price in heavy volume on Monday.

The 7¼% notes traded as high as par 3/8 in intraday activity but settled into the par to par ¼ context heading into the close, a source said.

There was $131 million in reported volume.

Bombardier priced an upsized $750 million, from $500 million, issue of the 7¼% notes at 99.75 to yield 7.287% in a Friday drive-by.

The yield printed tighter than the 7 3/8% to 7 5/8% yield talk.

Hilton softer

Hilton’s recently priced two tranches of senior notes were slightly softer in active trade on Monday, although they held above their issue price.

The 6 1/8% senior notes due 2032 were off about ¼ point.

They were trading in the par to par ¼ context heading into the market close, a source said.

There was $28 million in reported volume.

The 5 7/8% senior notes due 2029 were also down about ¼ point.

They were trading in the par to par 3/8 context heading into the market close.

There was $13 million in reported volume.

Hilton priced a $550 million tranche of the 5 7/8% notes and a $450 million tranche of the 6 1/8% notes at par in a Friday drive-by.

The 5 7/8% notes printed in the middle of yield talk in the 5 7/8% area; the 6 1/8% notes printed in the middle of yield talk in the 6 1/8% area.

Indexes

The KDP High Yield Daily index was off 6 basis points to close Monday at 50.76 with the yield 6.83%.

The index posted a gain of 27 bps last week.

The ICE BofAML US High Yield index slid 6 bps with the year-to-date return now 1.359%.

The index logged a weekly gain of 63.7 bps last week.

The CDX High Yield 30 index was off 4 bps to close Monday at 107.03.

The index posted a cumulative gain of 55 bps on the week last week.

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