GCP prices to cap $1.3 billion week; new GCP, Treehouse trade higher; energy continues rebound

By Paul Deckelman and Paul A. Harris

New York, Jan. 22 – The high-yield market put together its second consecutive strong showing on Friday, riding the momentum generated by Thursday’s big upturn, aided by favorable tailwinds in the form of continued gains in equity and crude oil prices.

One new issue priced during Friday’s session – $525 million of seven-year notes from GCP Applied Technologies Inc., a Columbia, Md.-based provider of specialty construction chemicals building materials and packaging technologies being spun off from chemical manufacturer W.R. Grace. It was the first regularly scheduled deal to price off the forward calendar following a roadshow this year, following several opportunistically timed and quickly shopped drive-by offerings.

As was the case with Thursday’s new deal – Oak Brook, Ill.-based packaged food and beverage producer Treehouse Foods, Inc.’s $775 million of eight-year notes – the GCP deal was well over-subscribed by potential investors, priced at the tight end of pre-deal guidance and firmed smartly when it hit the aftermarket.

The GCP deal brought the week’s total of new issuance of junk-rated, U.S. dollar-denominated paper from domestic or industrialized-country borrowers to $1.3 billion in two tranches, up from the $350 million that had priced in one tranche the week before, ended Jan. 15.

In the secondary market – besides the aforementioned strong trading levels of the week’s two new issues – traders saw a continuation of the strong comeback that energy credits such as Whiting Petroleum Corp., WPX Energy Inc., Oasis Petroleum Inc., California Resources Corp. and Chesapeake Energy Corp., among others, had begun on Thursday after having been down multiple points in heavy trading earlier in the week.

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