Transocean, Jaguar price; new issues share spotlight with Intelsat; Windstream bonds gain

By Paul A. Harris and Stephanie N. Rotondo

Portland, Ore., Oct. 4 – A relatively busy primary market session on Wednesday saw four issuers price single-tranche deals, raising a combined total of $1.9 billion.

In quick-to-market transactions, Transocean Inc. brought $750 million of 8.25-year notes at par to yield 7½% and Hologic, Inc. priced $350 million of eight-year notes at par to yield 4 3/8%.

Jaguar Land Rover Automotive plc priced $500 million of 4½% 10-year notes, and Time Inc. priced $300 million of 7½% eight-year notes.

Trading in the high-yield bond market was again dominated by recently priced issues on Wednesday.

However, the secondary had its own flurry of activity in the midweek session.

Intelsat SA paper, for instance, was trading actively and better. The name began to gain ground late Tuesday when it was reported that the company is encouraging regulators to allow the use of satellite spectrum for terrestrial communications.

Windstream Holdings Inc. was also notable, as has been the case of late. The company’s debt traded up as it was ruled that the transferring of assets and spinoff of what became Uniti Group Inc. did not trigger a payout on the credit-default swaps.

While the go-go names of the day in the high-yield space were trending higher, the overall tone of the day was a little more muted, according to market indicators.

The KDP High Yield index, for its part, was unchanged at 72.39, with a 5.12% yield. But a market source reported that the CDX North American Series 29 High Yield index was down just a shade at 107.987 bid, 108.067 offered.

Transocean prices tight

Wednesday's primary market session featured four issuers each bringing single-tranche deals.

Three of Wednesday's four deals were drive-bys.

Two priced at the tight ends of talk, and the other two came on top of talk.

None of the session's deals was upsized.

Transocean priced a $750 million issue of 8.25-year senior guaranteed notes (B1/B+) at par to yield 7½% in a quick-to-market trade.

The yield printed at the tight end of the 7½% to 7¾% yield talk.

Citigroup Global Markets Inc., Barclays and Wells Fargo Securities LLC were the joint bookrunners.

The Zug, Switzerland-based offshore oil and drilling contractor plans to use the proceeds to fully repay its 2½% senior notes due Oct. 15, 2017 upon maturity, to redeem all of its 6% senior notes due March 2018 and its 7 3/8% senior notes due April 2018, to fully repay its Eksportfinans loans due January 2018 and for general corporate purposes.

Jaguar Land Rover bullet

Jaguar Land Rover priced a $500 million issue of 10-year senior bullet notes (Ba1/BB+) at par to yield 4½%.

The yield printed on top of yield talk in the 4½% area. Initial talk was in the mid-4% area.

Physical bookrunner J.P. Morgan Securities LLC will bill and deliver. Goldman Sachs & Co., Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC were also physical bookrunners.

BNP Paribas, Credit Agricole CIB, Mizuho Securities, NatWest Investments and SG CIB were senior joint bookrunners. ING and UniCredit were joint bookrunners.

The Whitley, England-based automobile manufacturer plans to use the proceeds for general corporate purposes.

Hologic at the tight end

Hologic priced a $350 million issue of eight-year senior notes (Ba3/BB-) at par to yield 4 3/8% in a quick-to-market Wednesday transaction.

The yield printed at the tight end of yield talk in the 4½% area.

Goldman Sachs was the left bookrunner. BofA Merrill Lynch, JPMorgan, MUFG and Citigroup were the joint bookrunners.

The Marlborough, Mass.-based medical technology company plans to use the proceeds to refinance its convertible notes and for general corporate purposes.

Time prints at 7½%

Time priced a $300 million issue of eight-year senior notes (B2/B) at par to yield 7½%.

The yield printed on top of price talk in the 7½% area.

The debt-refinancing deal also came with investor-friendly covenant changes. Among them, the debt incurrence test is reduced to 3.5 times from 4.5 times consolidated net leverage. The credit facilities basket is reduced to $1.5 billion from $2.4 billion. The restricted payments basket is reduced to $200 million from $250 million.

Citigroup, Morgan Stanley, BofA Merrill Lynch, Barclays, BNP Paribas and JPMorgan were the joint bookrunners.

Time, Energy Transfer firm

With new issues hitting the market hot and heavy of late, it was no surprise that new and recent deals took up a bulk of the midweek activity.

In particular, Time’s $300 million of 7½% notes due 2025 were rather active, trading up to par ½, according to a trader.

From Tuesday’s business, Energy Transfer Equity LP’s $1 billion of 4¼% notes due 2023 were also actively traded.

A trader said the debt traded up to “around 101.”

The yield came in line with the 4¼% price talk and was upsized from an expected $750 million.

Morgan Stanley, Mizuho Securities, Credit Suisse Securities (USA) LLC, Goldman Sachs & Co., MUFG, Natixis Securities, Scotia Capital, SMBC Nikko and TD Securities ran the books.

Intelsat in play

Away from new issues, Intelsat’s debt was deemed the day’s “most notable mover.”

A trader noted that the Luxembourg-based communications satellite company’s bonds had gotten a boost in trading late Tuesday, after it was reported that it, along with Intel Corp., was proposing to use satellite-controlled spectrum for 5G cellular networks.

The trader said the company’s “LuxCo” paper was up “at least another point,” seeing the 7¾% notes due 2021 around “70-ish” and the 8 1/8% notes due 2023 at 67½.

He added that the Intelsat Jackson issues – such as the 7¼% notes due 2020 – were “sideways today.

“They rallied yesterday,” he said.

Intelsat and Intel have teamed up to urge the U.S. Federal Communication Commission to allow the use of satellite-controlled C-band spectrum by terrestrial communications companies for future 5G networks.

Windstream wins

Windstream debt ticked up on Wednesday, after the International Swaps and Derivatives Association ruled that the transferring of assets and spinoff of what became Uniti Group did not trigger a payout on the CDS.

A trader said the shorter-dated Windstream issues were “up a little bit,” while Uniti Group’s bonds firmed about 1½ points.

He pegged the 8¼% notes due 2023 “around 92½” and the 7 1/8% notes due 2024 “around 99.”

The ISDA ruling was unanimous across its 15-bank panel.

Last week, Windstream was slapped with a default notice from Aurelius Capital, a holder of more than 25% of the 6 3/8% notes due 2023. The noteholder alleged that a transfer of assets, as well as other activities surrounding the spinoff of what became Uniti, was a violation of the indenture, or a default.

However, the company has denied that a default occurred and has even asked a court to issue an injunction on Aurelius’ default filing.

© 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.