New Sensata 4 7/8% notes due 2023 return to premium

By Paul A. Harris

Portland, Ore., April 12 - The new Sensata Technologies BV 4 7/8% senior notes due Oct. 15, 2023 (B1/BB-/) were trading at a modest premium, par 1/8 bid, par 5/8 offered, on Friday morning, according to a buyside source.

The bonds retreated to par offered shortly after the deal priced at par on Wednesday, the buysider recounted.

That dip in trading came despite the fact that the order book was reported to be seven-times oversubscribed for the deal, which was upsized to $500 million from $400 million.

Price talk on Sensata marched south throughout the Thursday session, when the deal was in the market as a drive-by, sources said.

That day one buyside source expressed the belief that Sensata might come with a yield as high as 5 3/8%, when dealers first announced it.

Soon, however, it became clear that it would price no higher than 5%, the source said.

And ultimately it came with a 4 7/8% yield.

That southward march of yield talk may have given one or several accounts "cold feet," according to an investor who played the deal.

As much as $40 million of the freshly minted Sensata 4 7/8% paper became offered at par not long after the deal priced, the source said.

However the market easily absorbed the offered amount of notes, and the price ultimately firmed.

"The dealers washed them all, and they went to happy buyers," the investor said.

It's the story of the present high-yield market, the source reflected. Deals are pricing rich and trading to slight premiums.

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