Charter, Open Text price; Asbury Automotive, Husky join calendar; Advisor Group flat; Cision trades up

By Paul A. Harris and Abigail W. Adams

Portland, Me., Feb. 3 – The domestic high-yield primary market saw an active session on Monday with two sizable drive-by deals pricing and the forward calendar growing.

Open Text priced an upsized $1.8 billion in two tranches, and Charter Communications Inc. priced a $1.65 billion offering.

The activity promises to extend throughout the week with Arconic Inc., Innophos Holdings Inc. and Banijay Group set to price their offerings over Tuesday and Wednesday.

Asbury Automotive Group, Inc. also started a roadshow for a $1.13 billion two-tranche offering, and Husky Injection Molding Systems Ltd. is on the road with a $450 million offering of PIK toggle notes.

Meanwhile, the secondary space was largely flat on Monday with many on the sidelines waiting to see which direction the market would turn following last week’s coronavirus induced volatility, a market source said.

Trading activity surrounding several recent deals was beginning to wane as they found their level in the secondary space.

However, Advisor Group Inc.’s 6¼% senior notes due 2028 (B1/B/B+), which priced late Friday, were active although the notes were hovering around their issue price.

While volume was light, Cision 9½% senior notes due 2028 (Caa2/CCC) put in a strong performance in the aftermarket with the notes well above their issue price.

As the secondary space awaited Charter’s new offering to break, several outstanding issues were active although their performance was mixed.

Outside of recent issues, Intelsat SA’s junk bonds continued to dominate activity with the notes continuing to rebound after last week’s sell-off.

Charter, Open Text drive by

The Feb. 3 week opened to a torrent of news in the high0yield primary market.

In drive-by action, Open Text priced an upsized $1.8 billion amount of senior notes (existing ratings Ba2/BB) in two tranches.

Open Text Corp. priced $900 million eight-year notes at par to yield 3 7/8%, at the tight end of yield talk in the 4% area, and Open Text Holdings Inc. priced $900 million 10-year notes at par to yield 4 1/8%, at the tight end of yield talk in the 4¼% area.

Meanwhile, Charter Communications priced a $1.65 billion issue of CCO Holdings LLC/CCO Holdings Capital Corp. 10.5-year senior notes (B1/BB/BB+) at par to yield 4½%, at the tight end of the 4½% to 4 5/8% yield talk.

Tuesday-Wednesday deals

Arconic upsized its offering of eight-year second-lien secured notes to $600 million from $400 million, shifting $200 million to the bonds from the concurrent term loan.

Timing is accelerated.

Dealers have targeted Tuesday for pricing the notes, to match the accelerated timing of the term loan. The notes had previously been expected to remain in the market until Thursday.

Pending official price talk, initial guidance had the notes coming to yield in the low 7% area.

Innophos Holdings downsized its offering of eight-year senior notes (Caa1/B-) to $275 million from $300 million, shifting $25 million of proceeds to it concurrent bank loan.

The notes are talked to yield 9¼% to 9½%, toward the tight end of the earlier 9%-handle guidance.

And Banijay Group upsized its three-part offering of high-yield notes to approximately €1.3 billion equivalent from €1.25 billion equivalent by upsizing the sole dollar-denominated tranche.

The dollar-denominated senior five-year non-call-two senior notes (B1/B) are upsized to $403 million from €325 million equivalent.

Along with the upsizing of the dollar-denominated notes, the concurrent dollar-denominated term loan is downsized to $460 million from €450 million equivalent.

Price talk is as follows:

• €525 million of five-year non-call-two secured notes (B1/B) are talked to yield 3¾% to 4%. Initial guidance was in the low 4% area;

• $403 million five-year non-call-two secured notes are talked to yield in the 5½% area, revised from earlier talk in the 5¾% area. Initial guidance was in the low-to-mid 6% area; and

• €400 million of six-year non-call-2.5 unsecured notes (Caa1/CCC+) are talked to yield 6½% to 6¾%. Initial talk had the unsecured notes pricing 250 basis points behind the euro-denominated secured notes.

Roadshows

The active forward calendar also grew on Monday.

Asbury Automotive Group is shopping a $1,125,000,000 two-part senior notes offer on a roadshow set to run through Wednesday.

The deal is coming in tranches of eight-year notes and 10-year notes.

And Husky Injection Molding Systems is shopping a $450 million offering of Husky III Holding Ltd. five-year senior PIK toggle notes (Caa2) on a roadshow set to run through Thursday.

Investor calls for Asbury and Husky are scheduled to get underway at 12:30 p.m. ET on Tuesday.

Advisor Group flat

Advisor Group’s 6¼% senior notes due 2028 fell flat in the secondary space with the notes hovering around par.

While the notes did trade as high as 101 early in the session, they quickly lost steam.

The 6¼% notes spent most of the day trading between par and par ½, a market source said.

Advisor Group priced a downsized $500 million issue of the 6¼% notes at par on Friday.

While downsized, the notes priced tighter than the 6½% to 6¾% yield talk with demand heard to be upwards of $1.7 billion, sources said.

The issue size was initially $575 million but $75 million was shifted to the term loan B which was upsized to $475 million.

Cision trades up

While activity in the small issue was light, Cision’s 9½% senior notes due 2028 traded up in the aftermarket.

The notes were marked in the 101½ to 101¾ context on Monday, a market source said.

Cision priced a $300 million issue of the 9½% notes at par on Friday.

Pricing came wider than talk for a yield in the 8¾% to 9% area. Initial talk was in the low 8% area.

With the issue size that small, there were probably very few players involved in the deal, a source said.

Charter mixed

Charter’s drive-by offering activated its capital structure with several outstanding issues seeing decent trading volume, although their performance was mixed, sources said.

Charter’s 4.8% senior notes due 2050 were on the rise in high-volume activity.

The notes were up about 5/8 point and were changing hands just shy of 108 heading into the market close, according to a market source.

There was about $22 million in reported volume.

Charter’s 4¾% senior notes due 2030 were down about 3/8 point and were changing hands around 102 5/8 heading into the market close, according to a market source.

The notes saw about $15 million in reported volume.

Charter priced a $1.3 billion tap of the 4.8% notes due 2050 at 101.964 and a $1.2 billion tap of the 4¾% notes due 2030 at 101.125 in December.

Intelsat improves

Intelsat’s junk bonds continued to rebound in high-volume activity on Monday after last week’s sell-off.

The 8 1/8% senior notes due 2023 rose 3¾ point to 45½ with more than $28 million in reported volume, according to a market source.

The 8½% senior notes due 2024 were up 1¾ point to 86½ with more than $37 million in reported volume.

The 9½% senior notes due 2023 were the most active in the capital structure with more than $51 million in reported volume.

The notes were up 2¾ point to 57¼.

Intelsat’s capital structure collapsed last week as concern mounted about the payout the satellite broadcast company would receive from the C-Band due to legislation introduced to Congress and media reports about the structure favored by the Federal Communications Commission.

Intelsat’s junk bonds dropped between 10 to 15 points, sources said.

However, the notes were staging a minor rebound on Friday with the gains carrying over to Monday’s session.

$552 million Friday outflows

The dedicated high-yield bond funds saw $552 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 $622 million of outflows on the day.

However actively managed high-yield funds were positive, posting $70 million of inflows on Friday, the source said.

Indexes mixed

Indexes were mixed on Monday after all closed last week with cumulative losses.

The KDP High Yield Daily index was flat at 71.35 although the yield gained 1 basis point to 5.09%.

The index saw a cumulative loss of 28 bps last week.

The ICE BofAML US High Yield index gained 7.6 bps with the year-to-date return now 0.088%.

The index wavered between positive and negative territory last week and posted a cumulative loss of 37.4 bps.

The CDX High Yield 30 index shaved off 6 bps to close Monday at 108.33.

The index saw a cumulative loss of 45 bps last week.

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