Morning Commentary: Icahn brings $900 million two-part deal; Valeant up on asset sale news

By Paul A. Harris

Portland, Ore., Jan. 10 – The high-yield bond market posted a strong opening on Tuesday, according to a bond trader based in New York.

Against a backdrop of flat to slightly higher equity prices, the high-yield ETFs were modestly higher at mid-morning.

The iShares iBoxx $ High Yield Corporate Bd (HYG) was up 8 cents, or 0.09%, at $87.29 per share. The SPDR Barclays High Yield Bond ETF (JNK), at $36.79 per share, was up 0.11%, or 4 cents.

Bonds of Valeant Pharmaceuticals International, Inc. were up 4 points on asset sale news, the trader said.

Earlier Tuesday the Laval, Quebec-based pharmaceutical company announced that it has entered into an agreement to sell its CeraVe, AcneFree and AMBI skincare brands to L'Oréal for $1.3 billion in cash.

Valeant said it will use the proceeds to permanently repay term loan debt under its senior credit facility.

Icahn brings $900 million

Icahn Enterprises LP and Icahn Enterprises Finance Corp. were scheduled to begin a roadshow on Tuesday in New York for a $900 million two-part offering of senior notes.

The deal is coming in tranches of five-year notes and seven-year notes.

Initial guidance has the five-year notes coming at 6¼% and the seven-year notes at 6¾%, a trader said.

Tranche sizes remain to be determined.

The debt refinancing deal, via bookrunner Jefferies, is scheduled to continue with its roadshow on Wednesday and Thursday and to price on Thursday.

Icahn joins a couple of other sizable dollar deals scheduled to price before the weekend.

Team Health Holdings, Inc. is on the road with a $1,015,000,000 offering of eight-year senior notes (Caa1/CCC+/B-), a deal that is already oversubscribed, market sources say.

The book size is already at $1.5 billion, at trader said, adding that much of the deal is expected to be taken by accounts which participated in the syndication of the bridge loan.

Initial guidance has the notes coming with a 6¾% yield.

Barclays is leading the offering.

Meanwhile Novolex Holdings, Inc. (Flex Acquisition Co., Inc.) is out there with a $625 million offering of eight-year senior notes via joint bookrunners Credit Suisse, Deutsche Bank, Morgan Stanley and Jefferies.

That deal appears to be coming together with a yield in the mid-7% area, and is going well, a trader said.

Amigo Loans on roadshow

In the European high-yield primary market Amigo Loans plans to start a roadshow on Wednesday for a £250 million offering of seven-year senior secured notes (expected ratings B1/B+).

Joint bookrunner JPMorgan will bill and deliver. Jefferies and NatWest Markets are also joint bookrunners.

The Bournemouth, England-based financial technology company plans to use the proceeds to repay its revolving credit facility and partially repay a shareholder loan.

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