Neptune Energy adds; Evoca prices; Thursday issuance higher; Teva up; WeWork better

By Paul A. Harris and James McCandless

Portland, Ore., Oct. 18 – The high-yield primary week ended with new paper entering the market.

Neptune Energy completed its revised $300 million add-on

And, Evoca SpA priced a €550 million issue of new notes in the European junk market.

The high-yield secondary space finished the week with renewed focus on newer issues.

New issuance from Charter Communications, Inc. and VodafoneZiggo was active during Friday trading.

Meanwhile, Teva Pharmaceutical Industries Ltd.’s issues moved higher in a week of shifting news concerning opioid settlements.

Coworking name WeWork Cos. Inc.’s notes pushed up.

High-yield funds were experiencing inflows and the high-yield indexes continued a positive streak.

Friday deals

The Friday session in the high-yield primary generated a steady stream of headline news.

Neptune Energy priced a downsized, restructured $300 million issue of senior notes.

The revised deal came in the form of an add-on to the Neptune Energy Group Midco Ltd./Neptune Energy Bondco plc 6 5/8% senior notes due May 15, 2025 which priced at par.

The issue price came at the cheap end of the 100 to 100.5 price talk.

The deal size decreased from $500 million.

The structure underwent a revision. It had been launched into the market as a new seven-year non-call-three senior note.

It was a happier ending for Italy-based vending machine company Evoca SpA which priced a €550 million issue of seven-year senior secured floating-rate notes (B2/B) with a 425 basis points spread to Euribor at par.

The spread came 12.5 bps inside of spread talk in the 450-basis points area. The issue price came on top of price talk.

The week ahead

Dealers kicked off a $1,575,000,000 offering of high-yield notes backing both the acquisition of Wesco Aircraft Holdings, Inc. by an affiliate of Platinum Equity, and the merger of Wesco with Pattonair USA Inc.

The deal features $1 billion of seven-year senior secured notes and $575 million of eight-year senior unsecured notes.

A roadshow is set to begin on Tuesday and conclude on Friday.

Wesco Pattonair leads a sizable active calendar for the week ahead.

Liberty Cablevision of Puerto Rico LLC is conducting a roadshow for $1 billion of eight-year senior secured notes, with initial guidance in the 7% area.

Virgin Australia Holdings Ltd. is on the road with $400 million of five-year senior notes (B2/B+). Initial price talk is in the 8% area.

And FXI Holdings, Inc. aims to price $775 million of seven-year senior secured notes in the middle part of the week ahead. Initial talk is 11½% to 12%.

Charter, VodafoneZiggo active

New issuance took the spotlight to end the week, traders said.

Stamford, Conn.-based telecommunications name Charter’s new 4.8% senior secured notes due 2050 gained ½ point to close at 101½ bid.

Its 4¾% senior notes due March 1, 2030 shaved off ¼ point to close at 101¾ bid.

Both issues priced on Tuesday.

Netherlands-based cable operator VodafoneZiggo’s new $500 million 4 7/8% senior notes due 2030 landed at 102 bid after becoming free to trade.

The deal came in two parts, a dollar-denominated tranche and a euro-denominated tranche.

Teva higher

Meanwhile, in the pharma space, Teva’s paper pushed higher, market sources said.

The 3.15% senior paper due 2026 gained ½ point to close at 74 bid. The 2.8% senior paper due 2023 improved by ¾ point to close at 85½ bid.

This week, the ground shifted numerous times for the Petach Tikva, Israel-based generic drug producer, and others in the space, as several companies in the sector work towards coming to settlements for opioid-related litigation.

News out this week reported that the company is working to come to a $50 billion blanket settlement that includes giving away billions in medications and operating a distribution network for those medications for ten years.

On Monday, a trail is set to begin in federal court in which Teva is one of the defendants.

WeWork better

Real estate startup WeWork’s issues saw a better day, market sources said.

The 7 7/8% senior notes due 2025 gained 1¼ points to close at 84¾ bid.

The New York-based coworking company is scrambling to put together a financing deal before it runs out of money at the end of November.

On Friday, news broke that SoftBank, its largest backer, is considering an $8 billion rescue package.

That stands in stark contrast to what the $46 billion that the company valued itself at in the run-up to its now-shelved initial public offering.

After its chief executive officer resigned, the company is considering a round of layoffs that could be announced by the end of the month.

Thursday inflows

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

High-yield ETFs saw $676 million of inflows on the day.

Actively managed high-yield funds saw $245 million of inflows on Thursday, the source said.

News of Thursday’s daily flows trails a late Thursday afternoon report that the combined funds saw $1.792 billion of inflows in the week to Wednesday's close, according to a report by Lipper US Fund Flows.

Indexes trend up

Three high-yield indexes extended positive runs.

The KDP High Yield Daily index finished unmoved for a second straight day, ending at 71.23 with the yield dipping to 5.53%.

The index was unchanged on Thursday, shifted up 7 basis points on Wednesday and added 5 bps on Tuesday.

The index gained 12 bps in total this week.

The ICE BofAML US High Yield index tacked on 1.7 bps with the year-to-date return now at 11.767%.

The index rose 7.9 bps on Thursday, added 9.1 bps on Wednesday and gained 15.2 bps on Tuesday.

The CDX High Yield 30 index rose 33.74 bps to 107.2331.

The index picked up 33.92 bps on Thursday, was positive by 34.04 bps on Wednesday and grew by 34.15 bps on Tuesday.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.