Morning Commentary: Clear Channel Outdoor brings $125 million tap; junk slips amid stock sell-off

By Paul A. Harris

Portland, Ore., Aug. 9 – The high-yield bond market was ¼ to ½ point lower at mid-morning amid a backdrop of lower stock prices, a trader said on Wednesday.

The high-yield ETF, SPDR Blmbg Barclays High Yield Bd ETF (JNK) was down 0.31%, or 12 cents, at $36.99 per share at midmorning.

Deals that priced in a burst of early August new issue activity are giving varied performances in the secondary market.

The new Triumph Group, Inc. 7¾% senior notes due Aug. 15, 2025 (B3/B-) were higher than their new issue price at par ¾ bid, 101¼ offered Wednesday morning.

The $500 million issue priced at par on Tuesday, at the conclusion of a roadshow.

The new Restaurant Brands International Inc. 5% second-lien senior secured notes due Oct. 15, 2025 (B3/B-) were trading right around new issue price on Wednesday.

The hefty, upsized $1.3 billion issue (from $1 billion) priced at par in a Tuesday drive-by.

Meanwhile the new Dynegy Inc. 8 1/8% senior notes due Jan. 30, 2026 (B3/B+) were lagging their new issue price on Wednesday at 99 bid, 99¼ offered.

The upsized $850 million issue (from $600 million) priced at 99.259 to yield 8¼% in a Monday drive-by.

Clear Channel Outdoor tap

News volume in the new issue market slowed on Wednesday, compared to heavy volume seen earlier in the week.

Clear Channel Outdoor Holdings, Inc. plans to price a $125 million tack-on to the Clear Channel International BV 8¾% senior notes due Dec. 15, 2020.

Initial indications are that the deal is shaping up in a 103.5 to 104 price context, a trader said.

Credit Suisse is the bookrunner.

Among names already in the market David Weekley Homes, LLC talked its $250 million offering of eight-senior senior notes (B3/B+) to yield in the 6¾% area, with pricing set for Wednesday.

Two additional offers are on deck for Wednesday executions.

TMS International Corp. is set to price a $250 million offering of eight-year senior notes (Caa1/B), talked in the 7¼% area on Tuesday.

And Cable & Wireless Communications plc is on deck with a $700 million offering of senior notes due September 2027. As the market awaited official talk at mid-morning, initial guidance was 6½% to 6¾%, the trader said.

Looking toward the late part of the week, Staples Inc. is shortly expected to bring a sizable bond deal backing the buyout of the company, sources say.

The debt financing saw a redistribution of proceeds on Wednesday, with the seven-year first-lien term loan upsized to $2.7 billion from $2.4 billion and the unsecured bridge loan – expected to be taken out by the bonds – downsized to $1.3 billion from $1.6 billion.

Mixed Tuesday flows

The daily cash flows were mixed and muted on Tuesday, the trader said.

High-yield ETFs sustained $77 million of outflows on the day.

Actively managed funds saw $5 million of inflows on Tuesday.

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