Brand Industrial navigates junkland; Univision holds premium; Anywhere up on exchange

By Paul A. Harris and Abigail W. Adams

Portland, Me., July 25 – Brand Industrial Services, Inc. bookrunners were busy on Tuesday as a new junk bond deal priced and terms were hammered out throughout the session.

Meanwhile, it was another quiet and flat day in the secondary space with credit spreads holding at their tightest levels of the year.

New issues were the drivers of activity in the space on Tuesday as market players awaited earnings and the Federal Open Market Committee’s Wednesday announcement to fuel further movement.

Univision Communications Inc.’s new 8% senior secured notes due 2028 (B1/B+) were in focus with the notes holding the nominal premium gained after breaking for trade the previous session.

Outside of new paper, earnings and topical news fueled the largest gainers of the session.

WW International, Inc.’s 4½% senior notes due 2029 (B3/B) outperformed on Tuesday with the weight-loss company’s heavily-shorted stock also gaining double digits.

Anywhere Real Estate Inc.’s (formerly Realogy Holdings Corp.) senior notes (B2/B) resumed their strong upward momentum with the notes adding 3 points after announcing an exchange deal alongside earnings.

Brand Industrial prices

Tuesday’s primary market traders saw the size of the Brand Industrial Services, Inc. junk bond deal seesaw in size, upsizing to $1.57 billion from $1.335 billion at the top of the morning, only to launch and price late in the afternoon at the original $1.335 billion size.

The deal, a single tranche of seven-year senior secured notes (B3/B-) that priced at par to yield 10 3/8%, came 12.5 basis points inside of the 10½% to 10¾% yield talk, and a hefty 5/8 of a point below the wide end of the 10¾% to 11% initial talk.

Demand was clustered at the wide end of that initial talk, 11%, where orders were heard to be above $2.5 billion, sources said.

However, in the course of the Tuesday session investors got a double-whammy, a deal-upsize in the morning, followed by rich-to-guidance talk, and a print that ultimately came through that talk.

Brand Industrial’s bank loan took a seesaw ride which mirrored that of the bonds, downsizing to $1.1 billion first thing Tuesday morning, then upsizing back to the $1.335 billion amount that came on its original wrapper.

Notably, as pricing on the bonds ratcheted tighter and tighter, pricing on the loan finished on top of the spread and discount talk (550 basis points at 96) at which it launched into the market a week ago.

Elsewhere

Elsewhere on Tuesday Seadrill Ltd. drove by with a $75 million tap of a deal it priced less than a fortnight ago.

The add-on to the Seadrill Finance Ltd. 8 3/8% senior secured second-lien notes due Aug. 1, 2030 (B2/BB/B+) priced at 100.75 to yield 8.232%, at the rich end of talk.

One deal, a telegraphed $500 million offering of five-year senior secured notes from KDC/One, took a place on the active forward calendar.

It officially kicks off on an 11 a.m. ET Wednesday investor conference call.

Univision holds premium

Univision’s new 8% senior secured notes due 2028 were largely unchanged in heavy volume on Tuesday with the notes holding on to the premium gained on the break.

The 8% notes were marked at par 1/8 bid, par ½ offered heading into the close, a source said.

There was $117 million in reported volume.

While the offering played to heavy demand during bookbuilding, the notes priced tight, leaving them little room to run in the secondary, a source said.

Univision priced a $500 million issue of the 8% notes at par to yield 7.999% in a Monday drive-by.

The yield came near the middle of yield talk in the 8% area.

The deal was heard to have played to $2.25 billion of demand.

WW jumps

WW International’s 4½% senior notes due 2029 were among the largest gainers of Tuesday’s session with the company’s stock also rising double digits.

The 4½% notes climbed 3½ points in active trade.

They closed the day at 68½ with the yield about 12 5/8%, a source said.

There was $6 million in reported volume.

WW’s stock jumped more than 10% on Tuesday and continued to climb in after-hours trade.

WW’s pivot to prescription weight loss drugs has fueled a rally in its senior notes.

The 4½% notes were trading on a 50-handle before WW announced its acquisition of weight management telehealth platform Weekend Health Inc., which does business as Sequence, in early March.

There may have been some short-covering in the name ahead of earnings, which are scheduled for Aug. 3.

Anywhere gains

Anywhere Real Estate’s senior notes continued their strong upward momentum on Tuesday with the notes adding another 3 to 3½ points after posting earnings and announcing an exchange offer.

The 5¼% senior notes due 2030 jumped 3½ points to break above a 93-handle.

They were changing hands in the 73½ to 74 context heading into the close, according to a market source.

The yield was about 10 7/8%.

There was $15 million in reported volume.

The 5¼% notes had strong upward momentum the previous week and traded up to a 72-handle before a round of selling pre-earnings knocked them down to a 70-handle.

Anywhere Real Estate’s 5¾% senior notes due 2029 added 3 points to close the day at 77 with the yield 11½%.

There was $4 million in reported volume.

In addition to reporting better-than-expected revenue, the company announced a privately negotiated exchange.

Angelo, Gordon & Co. L.P. agreed to exchange $273 million of their 5¼% notes and 5¾% notes for $218 million in new 7% second-lien senior secured notes due 2030, according to a company news release.

The company also announced that it intends to conduct further exchanges of the 5¼% and 5¾% notes on similar terms.

Fund flows

The cash flows of the dedicated high-yield bond funds were comparatively flat on Monday, the most recent session for which data was available at press time, according to a market source.

Actively managed high-yield funds had $9 million of inflows on the day.

High-yield ETFs had $8 million of inflows on Monday, the source said.

Indexes

The KDP High Yield Daily index was down 5 points to close Tuesday at 50.68 with the yield 7.33%.

The index shed 2 points on Monday.

The ICE BofAML US High Yield index shed 9 bps with the year-to-date return now 6.643%.

The gained 13.7 bps on Monday.

The CDX High Yield 30 index fell 7 bps to close Tuesday at 103.10.

The index added 3 bps on Monday.

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