Primary quiet, Vivint on tap; new Jefferies, AMC, Waterworks busy; Scientific Games gains on results

By Paul Deckelman and Paul A. Harris

New York, July 24 – The last full trading week of July opened on a quiet note on Monday, as syndicate sources reported no pricing activity in dollar-denominated and fully junk-rated paper.

However, the sources said that security alarm and home automation company Vivint, Inc. will price a $400 million seven-year note issue on Tuesday.

They also saw upcoming new deals from homebuilder Ashton Woods USA LLC and insurance brokerage services provider AssuredPartners, Inc.

Among recently priced junk bond offerings, traders saw fairly brisk activity in the new issues from Jefferies Finance LLC, AMC Networks, Inc. and CD&R Waterworks Merger Sub, LLC.

Away from the new or recently priced deals, Hertz Corp. notes were seen spinning their wheels, although there was no fresh news out on the car-rental giant.

Scientific Games Corp,’s bonds and shares firmed smartly after the gaming technology company reported a smaller second-quarter loss and better revenues than analysts were expecting.

Statistical market performance measures were mixed for a second consecutive session on Monday. They had turned mixed on Friday, after having improved on Wednesday and remained strong on Thursday, following a mixed performance last Tuesday.

Vivint for Tuesday

A modest calendar took shape during Monday's primary market session.

Vivint, Inc. plans to price $400 million of seven-year senior notes on Tuesday.

BofA Merrill Lynch, Credit Suisse, Citigroup, Deutsche Bank, Goldman Sachs, Macquarie, HSBC, Mizuho, Citizens Bank and Guggenheim are the joint bookrunners.

Proceeds will be used to redeem up to $150 million of the 6 3/8% senior secured notes due 2019 and for general corporate purposes, including repayment of the revolving credit facility.

AssuredPartners starts Tuesday

AssuredPartners, Inc. plans to start a roadshow on Tuesday in New York for a $450 million offering of eight-year senior notes, which are expected to price late in the July 24 week.

Morgan Stanley, BofA Merrill Lynch, Barclays, RBC, BMO and Macquarie are the joint bookrunners for the debt refinancing deal.

Ashton Woods for Wednesday

Ashton Woods USA LLC plans to price a $250 million offering of eight-year senior notes (Caa1/B-) on Wednesday.

J.P. Morgan and Wells Fargo are the joint bookrunners.

The Atlanta-based luxury home builder plans to use the proceeds to fund a tender offer for up to $100 million of its 6 7/8% senior notes due 2021, which was also announced on Monday, and to repay debt under its revolving credit facility.

Allfunds Bank PIK toggle

In the European primary market Allfunds Bank started a roadshow on Monday for a €575 million offering of seven-year PIK toggle notes (expected ratings Ba2/BB-).

Goldman Sachs is leading the sale.

Proceeds will be used to fund the buyout of the Spain-based provider of business-to-business services to financial institutions by Hellman & Friedman from Intesa Sanpaolo Group, Santander Group, General Atlantic and Warburg Pincus.

Elsewhere Diversey Care downsized its offering of eight-year senior notes (expected ratings Caa2/B) to €450 million from €545 million.

At the same time the concurrent bank loan was increased to €970 million from €820 million. The additional €55 million upsize of the bank loan will be used for cash on the balance sheet.

The bond covenants engendered some pushback on the part of investors, sources said.

The roadshow for the bond deal, being led by Goldman Sachs, is scheduled to conclude on Tuesday in Milan and Amsterdam.

DAE issue eases

In the secondary market, a trader exclaimed that there was “not a lot of movement here on anything.”

He added that it was “kind of a lackluster, tight, range-bound day today.”

For instance, he said, Friday’s new three-part-deal from DAE Funding LLC, while “pretty busy today,” on “decent volume,” was “kind of flattish,” price-wise.”

He saw its 4% notes due 2022 holding steady around 101 1/8 bid, while its 5% notes due 2024 hung in around 101 3/ bid.

He did not see much in the way of dealings in the new 4% notes due 2020.

At another desk a trader pegged the 4% notes around 101 bid, 101 3/8 offered, calling them down ¼ point on the day.

He saw the 4½% notes off by 1/8 point at 101 1/8 bid, 101½ offered, while the 5% notes were off by ¼ point, also at 101 1/8 bid, 101½ offered.

DAE Funding, a financing arm of the United Arab Emirates-based aircraft leasing company Dubai Aerospace Enterprise, priced all three tranches of that $2.3 billion bond behemoth at par on Friday, after the regularly scheduled forward calendar offering had been upsized from an originally announced $1.9 billion, and the thee-year note tranche added to what had originally been structured as a two-part offering.

Jefferies leads Most Actives

A trader said that Thursday’s new issue of 7¼% notes due 2024 from Jefferies Finance LLC and JFIN Co-Issuer Corp. was the Junkbondland volume leader on Monday, with over $21 million having changed hands.

He saw the crept up by 1/8 point to around 100 1/16 bid.

A second trader saw the notes in a 100¼-to-100¾ bid context – which he said was actually off slightly from Friday’s levels, which were closer to 100½ bid.

And at yet another desk, a trader said that the deal “didn’t really go anywhere,” sticking “right around the par level.”

Jefferies, a New York-based commercial lender and investment banking company, priced its regularly scheduled forward calendar offering at par on Thursday.

AMC, Waterworks issues active

Elsewhere among the recently priced offerings, a trader said that there was “some volume” in AMC Networks’ new 4¾% notes due 2025 and CD&R Waterworks Merger Sub 6 1/8% notes due 2025, both of which had priced on Wednesday.

He said that AMC was up marginally on the session, trading at slightly over 101 bid, on volume of around $10 million.

And he saw Waterworks’ new notes off around 3/8 points, at 101¾ bid, also on around $10 million of turnover.

A second trader saw the AMC issue unchanged on the day, straddling the 101 level at 100 7/8 bid, 101 1/8 offered.

The New York-based cable network operator and content provider had priced its quick-to-market $800 million issue at par after the offering was upsized from an originally announced $500 million.

CD&R Waterworks, a special-purposed vehicle for funding the acquisition of St. Louis-based industrial products distributor HD Supply Waterworks Ltd. by private equity form Clayton, Dubilier & Rice, priced its $500 million regularly scheduled transaction at par after it was upsized from an originally planned $475 million.

Hertz heads lower

Away from the new issues, a trader said that Hertz Corp.’s paper “was active and off a bit” on Monday after the Estero, Fla.-based car-rental giant “had a little bit of a run last week.”

He saw its 5 7/8% notes due 2020 off by 7/8 point, at 95 7/8 bid, with around $11 million traded.

Hertz’s 7 5/8% senior secured notes due 2022 were about unchanged at 100½ bid, on volume of $15 million; some $1.25 billion of that paper had priced at par on May 31 after the forward calendar deal had been upsized from $1 billion originally.

Its 6¼% notes due 2022 eased slightly to 90¼ bid, on around $14 million of volume.

Scientific Games gains

Scientific Games’ bonds and shares were up after the Las Vegas-based gaming technology company reported a smaller second-quarter loss and better revenues than analysts were expecting.

Its 10% notes due 2022 were up a deuce on the day at 111¾ bid, on volume of over $8 million, although its 7% notes due 2022 were about unchanged at 106 7/8 bid, on $5 million of volume.

Its Nasdaq-traded shares jumped by $7.30, or 27.19%, to $34.15, on volume of over 8 million, some nine times the norm.

The company reported a second-quarter adjusted per-share loss of 43 cents – less than the 50 to 52 cents that analysts had expected.

It also posted revenues of $766 million, up from Wall Street’s consensus expectation of $739 million.

Indicators stay mixed

Statistical market performance measures were mixed for a second consecutive session on Monday. They had turned mixed on Friday, after having improved on Wednesday and remained strong on Thursday, following a mixed performance last Tuesday.

The KDP High Yield Daily Index lost 4 basis points on Monday to end at 72.55 – its first setback after eight straight upside moves, including Friday’s 1 bp gain, and Thursday’s 9 bps jump.

Its yield moved up by 1 bp to 4.94%, its first widening after four straight sessions of tightening, including Friday, when the yield came in by 1 bp.

The Markit CDX Series 28 High Yield Index eased by more than 1/16 point on Monday to close at 107 19/32 bid, 107 5/8 offered, its second consecutive setback; on Friday, the index was down by 5/32 point, its first loss after two straight gains, including Thursday’s 1/32 point rise.

However, the Merrill Lynch North American High Yield Index improved by 0.041% on Monday, versus Friday’s 0.023% retreat, which had been its first downturn after nine straight advances, including a 0.124% rise on Thursday.

Monday’s gain lifted the index’s year-to-date return to 5.923% from 5.88% on Friday.

It also established a new peak level for the year, topping the former zenith of 5.905%, which had been set this past Thursday.

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