iHeart, Boyd, Mattel, MSCI add-on price; Prestige Brands, Univar, Maxar trade up; Intelsat sinks

By Paul A. Harris and Abigail W. Adams

Portland, Me., Nov. 18 – The Monday session saw four issuers raise $2.6 billion in a news heavy primary market session that set the week on a trajectory to be the biggest volume week of 2019.

Boyd Gaming Corp. priced an upsized $1 billion issue of eight-year senior notes (B3/B+).

Mattel, Inc. priced a $600 million issue of 5 7/8% eight-year senior guaranteed notes (B1/BB-).

iHeartCommunications, Inc. priced a $500 million issue of eight-year senior secured notes (B1/BB-).

And MSCI Inc. priced an upsized $500 million add-on to its 4% senior notes due Nov. 15, 2029 (existing ratings Ba2/BB+).

The fast pace is expected to continue throughout the week with Teva Pharmaceutical Industries set to price an upsized $2 billion two-part dual-currency offering on Tuesday.

Kaiser Aluminum Corp., VICI Properties Inc., Aveanna Healthcare LLC and Telesat Canada also joined an active calendar with $13 billion being marketed.

Meanwhile, the secondary space was again largely flat with focus on new paper and new developments in topical trading activity from the previous week.

Prestige Brands, Inc.’s newly priced 5 1/8% senior notes due 2027 (B3/B+) jumped in the aftermarket with the notes trading at a large premium to their issue price.

Univar Solutions Inc.’s 5 1/8% senior notes due 2027 (B2/BB-) and Maxar Technologies Inc.’s 9¾% senior notes due 2023 (B2/B) also put in strong secondary market performance.

Meanwhile, Intelsat SA’s junk bonds saw another sell-off on Monday after the Federal Communications Commission announced it would pursue a public auction for the C-Band spectrum.

Week starts on record pace

The Monday session saw four issuers raise $2.6 billion in a news heavy primary market session that set the week on a trajectory to be the biggest week of 2019.

All of Monday's business came past the high-yield drive-through window.

Executions tended to be tight.

Boyd Gaming priced an upsized $1 billion issue of eight-year senior notes (B3/B+) at par to yield 4¾%.

The issue size increased from $750 million.

The yield printed at the tight end of the 4¾% to 5% yield talk and inside of initial talk in the 5% area.

Mattel priced a $600 million issue of 5 7/8% eight-year senior guaranteed notes (B1/BB-) at 99.203 to yield 6%.

The yield printed in the middle of yield talk in the 6% area and tight to initial guidance in the low 6% area.

iHeartCommunications priced a $500 million issue of eight-year senior secured notes (B1/BB-) at par to yield 4¾%.

The yield printed at the tight end of yield talk in the 4 7/8% area and inside of early guidance in the 5% area.

And MSCI priced an upsized $500 million add-on to its 4% senior notes due Nov. 15, 2029 (existing ratings Ba2/BB+) at par to yield 4%.

The issue price came in the middle of initial price talk in the par area, a trader said.

JP Morgan Securities LLC was the sole bookrunner.

Teva upsize, talk

Looking to Tuesday, Teva Pharmaceutical Industries is on deck with an upsized $2 billion (from $1.5 billion) two-part dual-currency offering of long five-year senior bullet notes (Ba2/BB).

Teva Pharmaceutical Finance Netherlands III BV is offering $750 million of the notes with talk in the 7½% area, inside of initial guidance in the high 7% area.

Teva Pharmaceutical Finance Netherlands II BV is offering €750 million of the notes with talk in the 6 3/8% area, inside of initial talk in the mid-to-high 6% area.

Big calendar

Aside from Teva, a big active forward calendar took shape on Monday.

Kaiser Aluminum Corp. plans to run a Monday-and-Tuesday roadshow for a $500 million offering of senior notes due March 1, 2028 (unsecured ratings Ba3/BB+).

Initial talk has the notes coming to yield in the high 4% area to 5%.

VICI Properties plans to price $1.75 billion of senior notes (expected ratings B1/BB) in two tranches on Thursday.

The deal will feature seven-year non-call-three notes with initial guidance in the low-to-mid 4% area and 10-year non-call-five notes with initial guidance in the high 4% area.

Aveanna Healthcare plans to run a Tuesday-through-Thursday roadshow for its $560 million offering of seven-year first-lien senior secured notes.

The deal is set to price Friday.

And Telesat Canada plans to price a $500 million offering of eight-year senior secured notes in a quick-to-market issuance on Friday.

Initial guidance has the deal coming to yield in the 5% area.

These deals take places aboard a $13 billion active calendar that includes Centene Corp.’s $7 billion three-part offering of senior notes (Ba1/BBB-/BB+), now roadshowing, and set to price Thursday.

The entire active calendar is set to clear ahead of Friday's close in what could possibly be the biggest issuance week of 2019 to date.

For that to transpire it would have to eclipse the week of Sept. 9, which saw $15.47 billion price, according to Prospect News data.

Prestige Brands trades up

Prestige Brands’ 5 1/8% senior notes due 2027 were trading at a large premium to their issue price in the secondary space.

They were seen at 101¾ bid, 102 offered on Monday, according to a market source.

While the notes also traded up to 102 after breaking for trade last Friday, they closed last week at 101½.

Prestige Brands priced a $400 million issue of the 5 1/8% notes at par in a Friday drive-by.

The yield printed at the tight end of yield talk in the 5¼% area. Initial guidance was in the 5½% area.

While the deal priced tight, the coupon was higher than many of the deals to hit the secondary in recent weeks, a market source said.

A ratings upgrade of Prestige’s unsecured debt also helped drive the valuation of the notes, sources said.

Moody’s Investors Service upgraded Prestige’s unsecured notes to B3 from Caa1 due to the company’s shift towards unsecured debt and its efforts to pay back its secured term loan, which enhanced its recovery prospects, Prospect News reported.

S&P also upgraded Prestige Brands’ unsecured notes to B+ from B, due to the company’s reduction of its secured term loan debt.

Univar in demand

Univar’s 5 1/8% senior notes due 2027 were also putting in a strong performance in the secondary space.

The notes traded up to 101¾ bid, 102 offered on Monday and closed the day at 101 7/8, sources said.

The bonds saw more than $16 million in reported volume during Monday’s session.

While the notes priced tighter than talk, the coupon was higher than several other deals to price in recent weeks, many of which came on a 4% handle.

The deal was also in demand during bookbuilding, which followed into the secondary space.

Univar priced an upsized $500 million issue of the 5 1/8% notes at par in a Friday drive-by.

The issue size increased from $400 million.

The deal priced tighter than talk for a yield of 5¼% to 5½%. Initial guidance was in the 5¾% area.

Maxar’s coupon

Maxar’s 9¾% senior notes due 2023 were outperforming in the secondary space, with the notes more than 3 points above their issue price.

The 9¾% notes were seen at 101 bid, 101½ offered on Monday.

Sources attributed the strong performance of the notes in the aftermarket to their large coupon.

With some of the higher credits pricing on the screws, there has been more demand in the secondary for notes farther down the credit spectrum, a market source said.

SSL Robotics, a subsidiary of Maxar Technologies, priced a downsized $1 billion issue of the 9¾% notes at 98 to yield 10.363% on Friday.

The issue size decreased from $1.25 billion.

The coupon printed at the wide end of the 9½% to 9¾% coupon talk.

The yield came near the wide end of the 10.11% to 10.37% yield talk. Earlier talk was in the 9% area.

Intelsat drops

Intelsat’s capital structure saw another sell-off on Monday after the FCC announced it would pursue a public auction for the C-Band spectrum.

Intelsat’s 8 1/8% senior notes due 2023 dropped 8 points in high-volume activity.

The notes were seen at 62 bid, 63 offered with more than $111 million in reported volume during Monday’s session, sources said.

Intelsat’s 9½% senior notes due 2023 also sank more than 8 points to close Monday at 73 3/8 with more than $83 million in reported volume.

Intelsat’s junk bonds sold off last week on concern congressional calls for a public auction were gaining traction.

However, the notes saw a minor reprieve last Friday after the C-Band Alliance proposed giving a portion of the proceeds from a private auction of the spectrum to the U.S. Treasury.

The 8 1/8% notes were the hardest hit in the capital structure with the downside pressure on Intelsat’s secured notes, such as the 9½% senior secured notes, relatively contained, sources said.

However, Intelsat’s entire capital structure was down 4 to 8 points on Monday following the FCC’s announcement.

Friday inflows

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

High-yield ETFs saw $111 million of inflows on the day.

Actively managed high-yield funds saw $35 million of inflows on Friday, the source said.

Indexes down

Indexes opened the week with minor losses after all posted cumulative losses on the week last week.

The KDP High Yield Daily index dropped 7 bps to close Monday at 71.02 with the yield now 5.24%. The index saw a cumulative loss of 16 bps on the week last week.

The ICE BofAML US High Yield index slid 1 bp with the year-to-date return now 11.856%.

The index saw a cumulative loss of 7.6 bps on the week last week after dropping below 12% returns Nov. 8.

The CDX High Yield 30 index dropped 10 bps to close Monday at 107.3. The index saw a cumulative loss of 24 bps on the week last week.

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