Southwestern Energy megadeal, Ladder, El Dorado drive by; new United Rentals busy and better

By Paul Deckelman and Paul A. Harris

New York, Sept. 11 – The recently revived high-yield primary market continued to churn out new deals on Monday, with over $2 billion of U.S. dollar-denominated and fully junk-rated paper heard to have priced during the session in four tranches, syndicate sources said, all of it in quickly-shopped transactions.

Oil and natural gas exploration and production company Southwestern Energy Co. priced a two-tranche deal totaling $1.15 billion, split between 8.5-year and 10-year paper.

Gaming operator El Dorado Resorts, Inc. brought an upsized $500 million add-on to its existing 2025 notes to market.

And Ladder Capital Corp., a real estate investment trust, did a $400 million offering of eight-year notes.

Traders quoted the latter issue higher, but said overall, they did not see much initial aftermarket activity in the day’s issues.

They did see Southwestern Energy’s existing bonds firm on the news of the company’s new debt issue, the proceeds of which will be used to fund tender offers for some of its outstanding bond issues.

The traders meantime saw considerable activity in the new United Rentals (North America) Inc. issue, which had priced on Friday, and said that the new notes were firmer on the day.

Away from the new deals, market participants said that hospital names such as Tenet Healthcare Corp. and HCA Inc., which had been under pressure last week on investor angst about possible damage to the companies’ far-flung holdings in storm ravaged Florida, bounced back in active trading Monday.

Statistical market performance measures turned higher across the board on Monday after having been lower all round on Friday for the first time since Aug. 17, and mixed on Thursday.

Southwestern Energy prices dual tranche

In a session that saw massive news volumes generated in the European and U.S new issue markets, dollar-denominated issuers raised $2.05 billion, with four tranches coming from three issuers.

Southwestern Energy Co. priced $1.15 billion of senior notes (B1/BB-) in two tranches.

The deal included $650 million of 8.5-year notes which priced at par to yield 7½%. The yield printed on top of yield talk in the 7½% area.

In addition Southwestern Energy priced $500 million of 10-year notes at par to yield 7¾%. The yield printed on top of yield talk in the 7¾% area.

The deal was well received, market sources said.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., MUFG, BofA Merrill Lynch, Credit Agricole Securities (USA) Inc., Mizuho Securities USA LLC, RBC Capital Markets LLC and Wells Fargo Securities LLC were the joint bookrunners.

The Houston-based independent energy company plans to use $327 million of the proceeds pay off its 2015 amended and restated term loan, with remaining proceeds, together with cash on hand, to fund the concurrent tender offers to purchase any and all of its 4.05% senior notes due 2020, up to $100 million of each of the 4.1% senior notes due 2022 and 4.95% senior notes due 2025.

Eldorado Resorts upsizes

Eldorado Resorts, Inc. priced an upsized $500 million add-on to its 6% senior notes due 2025 at 105.50 to yield 4.857%.

The issue size was increased from $350 million.

J.P. Morgan Securities LLC, Macquarie Capital (USA) Inc., Capital One Securities Inc., KeyBanc Capital Markets Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc. were the bookrunners.

The Reno, Nev.-based gaming company plans to use the proceeds from the Rule 144A and Regulation S offer to pay off its revolving credit facility, of which approximately $78 million was outstanding as of Sept. 8, 2017, and to repay debt under its term loan facility and related accrued interest.

Ladder Capital drive-by

Ladder Capital Corp. priced a $400 million issue of eight-year senior notes (S&P: BB-/Fitch: BB) at par to yield 5¼%.

The yield printed at the wide end of the 5 1/8% to 5¼% yield talk.

JP Morgan Securities LLC was the lead.

The New York-based real estate investment trust plans to use the proceeds to repay secured debt and for general corporate purposes.

Cheniere talk 5% to 5¼%

Cheniere Energy Partners, LP talked $1 billion of eight-year senior notes to yield 5% to 5¼%.

Books close at noon ET Tuesday, and the deal is set to price thereafter.

Credit Suisse Securities (USA) LLC, ABN Amro, BofA Merrill Lynch, HSBC, JP Morgan Securities LLC, Mizuho Securities, Morgan Stanley & Co., MUFG, SG CIB and Sumitomo are the joint bookrunners for the Rule 144A and Regulation S with registration rights offer.

The Houston-based integrated liquefied natural gas company plans to use the proceeds to partially repay its secured credit facilities.

SoftBank dollar/euro benchmark

SoftBank Group kicked of a benchmark four-part offering of notes.

The Regulation S only deal includes dollar-denominated seven-year notes talked at 4 7/8%, dollar-denominated 10-year notes talked at 5 3/8%, euro-denominated eight-year notes talked in the 3½% area and euro-denominated 12-year notes talked in the 4 5/8% area.

Tranche sizes remain to be determined.

The notes are set to price on Tuesday.

Deutsche Bank, Citigroup, Goldman Sachs and Morgan Stanley are the active bookrunners. Mizuho, Credit Agricole, JPMorgan BofA Merrill Lynch, UBS and BNP Paribas are the passive bookrunners.

The Tokyo-based telecom plans to use the proceeds to repay bank debt.

TTM eight-year deal

TTM Technologies, Inc. is expected to price $375 million of eight-year senior notes before the end of the week.

JP Morgan Securities LLC is on the left for the Rule 144A and Regulation S deal, the source said.

The Costa Mesa, Calif.-based printed circuit board manufacturer plans to use the proceeds to refinance its existing term loan and pay down its U.S. senior secured revolving credit facility.

Elsewhere TriMas announced in a Monday press release that it has initiated a $300 million offering of eight-year senior notes.

The Bloomfield Hills, Mich.-based diversified industrial manufacturer plans to use the proceeds to pay off its term loan A facility due 2020 under TriMas’ amended and restated credit agreement and to repay a portion of outstanding obligations under its accounts receivable facility.

Quintiles €420 million

In a news-heavy European primary market session Quintiles IMS Holdings, Inc. priced €420 million of eight-year senior notes at par to yield 2 7/8% on Monday, according to a market source.

Goldman Sachs will bill and deliver. Barclays, BofA Merrill Lynch, HSBC, JPMorgan and Wells Fargo were also members of the syndicate.

Proceeds will be used to refinance debt including the redemption of its 4 1/8% notes and pay down revolving credit facility, and for other general corporate purposes, which may include share repurchases and acquisitions.

Belden senior sub deal

Belden Inc. priced €300 million of 2 7/8% senior subordinated notes due 2025 at par.

Deutsche Bank, Goldman Sachs, JPMorgan and Wells Fargo managed the sale.

Moody's Investors Service assigned its Ba3 rating to the notes. The S&P rating is BB-.

Proceeds, along with cash on hand, will be used to fund the concurrent cash tender offer for- and/or redemption of €300 million of its outstanding 5½% senior subordinated notes due 2023.

St. Louis-based Belden provides communications and data services.

Amigo Loans taps 7 5/8% notes

Amigo Loans Group Ltd. priced a £75 million add-on to the Amigo Luxembourg SA 7 5/8% senior secured notes due 2024 at 104.5 to yield 6.737% in a quick-to-market Monday trade, according to a market source.

The reoffer price came on top of price talk in the 104.5 area.

JPMorgan, Jefferies and NatWest were the managers.

The Bournemouth, Dorset, United Kingdom-based financial technology company plans to use the proceeds to repay debt owed under its revolving credit facility and for general corporate purposes.

Viridian roadshows €600 million

Viridian Group FinanceCo PLC and Viridian Power and Energy Holdings DAC set a Monday-Tuesday roadshow for their €600 million equivalent two-part offering of senior secured notes.

The Rule 144A and Regulation S is coming in sterling-denominated seven-year notes and euro-denominated eight-year notes. Tranche sizes remain to be determined.

Joint global coordinator Deutsche Bank will bill and deliver. Barclays and Credit Suisse are also joint global coordinators. Lloyds and NatWest are joint bookrunners.

The notes in both tranches come with three years of call protection.

Proceeds, together with amounts received in relation to the settlement of certain forward foreign exchange contracts and cash on balance sheet, will be used to pay off €540 of Viridian Group FundCo II Ltd. 7½% senior secured notes due 2020 and pay a £60 million dividend to Viridian Topco Ltd.

Intralot seven-year deal

Greece's Integrated Lottery Systems and Services (Intralot) is expected to price a €450 private offering of senior notes due 2024.

Morgan Stanley is the global coordinator among a syndicate of banks that also includes Citigroup, Deutsche Bank, Nomura and SG CIB.

The Athens-based provider of technology and electronic systems to the gaming industry plans to use the proceeds to redeem its 6% senior notes due 2021 and for general corporate purposes.

MCS roadshows LBO deal

Promontoria MCS Holding, the parent of MCS Groupe is expected to roadshow a €270 million offering of seven-year senior secured notes until Wednesday, according to a market source.

Credit Suisse is leading the Rule 144A and Regulation S deal. KKR and SG CIB are also involved in the syndicate.

Proceeds will be used to fund the acquisition of MCS, a France-based debt collector, by BC Partners LLP, and to repay MCS debt.

Virgin Media add-on

Virgin Media Ltd. plans to roadshow a £200 million add-on to the Virgin Media Receivables Financing 5½% receivables-backed notes due Sept. 15, 2024 on Tuesday and Wednesday.

Credit Suisse is the global coordinator among a syndicate of banks that includes Banca IMI, ING and Mediobanca.

The Hook, United Kingdom-based telephone, television and broadband internet services provider plans to use the proceeds for working capital.

Ladder seen firmer

In the secondary arena, a trader said he had heard the new Ladder Capital 5 1/5% notes due 2025 quoted at “a wide par-to-101” range, after having priced at par.

He meantime did not immediately report any aftermarket dealings in either tranche of the new Southwestern Energy Co. paper, or in the El Dorado Resorts 2025 add-on.

Existing Southwestern surges

Several traders saw better levels on Southwestern Energy’s existing bonds, in the wake of the big new debt-refinancing deal.

A market source said that its 5.8% notes due 2020 gained more than 3½ points on the day to close at just above 107 bid.

A second trader who also saw the notes move up to that level said that the 5/8s were among the day’s most active credits, with over $18 million having changed hands.

The company’s 6.7% notes due 2025 moved up by 5/16 point, to end at 99 3/16 bid, with over $13 million having traded.

United Rentals tops actives list

Friday’s new deal from United Rentals (North America) was seen by traders to dominate the day’s Most Actives list.

“They traded in pretty heavy volume,” one trader said, quoting the Stamford, Conn.-based construction and industrial equipment rental and leasing company’s 4 7/8% notes due in January of 2028 at 101 1/8 bid, while its 4 5/8% notes due 2025 ended at 101½ bid, calling both bonds up about ½ point or so.

A second market source saw the 2028 notes at 101 bid, which he called up 3/8 point on the day, on volume of over $30 million, while the 2024 notes were ending at 101 ½, which he said was a ½ point gain, with over $24 million having traded.

United Rentals priced $750 million of each at par on Friday in a quick-to-market transaction, with the new 2025 notes seen to have moved up to 101 bid and the new 2028s up to 100 5/8 bid when the bonds hit the aftermarket.

Other recent deals active

Among other recently priced offerings, ViaSat, Inc.’s 5 5/8% notes due 2025 edged up by 1/8 point on the session, a trader said, ending at 100½ bid.

A second trader agreed that the Carlsbad, Calif.-based communications technology provider’s new notes “didn’t move up too much” in reaching that 100½ bid level, with around $12 million traded.

ViaSat priced $700 million of the notes at par on Thursday after that regularly scheduled forward calendar offering was upsized from an originally announced $600 million.

Station Casinos LLC’s 5% notes due 2025 “were up really tiny today,” in ending at 100¾ bid, one of the traders said, with a second trader estimating a 1/8 point gain, with around $8 million traded.

The Las Vegas-based operator of regional gaming casinos priced $550 million of the notes at par in a quick-to-market transaction on Thursday.

And Medical Properties Trust, Inc.’s 5% notes due 2027 were ending at 100¾ bid, also up 1/8 point, with about $9 million having traded.

Despite its split-rated (Ba1/BBB-) status, a junk trader said that much of the inquiries he had seen on the issue had come from traditional high-yield investors.

The Birmingham, Ala.-based healthcare REIT priced $1.4 billion of those notes at par on Thursday, after that drive-by deal was upsized from an originally announced $1 billion.

Hospitals are healthier

Away from the new deals, hospital names were seen improved after having fallen at the end of last week on investor anxiety the healthcare companies could suffer losses if their Florida facilities were damaged by Hurricane Irma.

Tenet Healthcare’s 8 1/8% notes due 2022 firmed smartly, gaining 1¼ points to end at 103¾ bid, with around $7 million traded.

Its 6¾% notes due 2023 gained 1 3/8 points to end at 97½ bid.

The Dallas-based hospital operator has 10 of its 77 healthcare properties in Florida, leading ion investor worry.

Sector peer HCA’s 4½% notes due 2027 rose ½ point to end at 101¼ bid, also on $7 million of turnover.

Indicators turn better

Statistical market performance measures turned higher across the board on Monday after having been lower all round on Friday for the first time since Aug. 17, and mixed on Thursday.

The KDP Daily High Yield Index firmed by 3 basis point on Monday to end at 72.27, after having lost 3 bps on Friday to end at 72.24, its first loss after 11 straight gains.

For a fourth session in a row, its yield was unchanged at 5.16%. Before that it had come in by 3 bps on Tuesday, its sixth straight narrowing.

The Markit CDX Series 28 High Yield Index was up by almost 7/16 point on Monday, finishing at 107 7/32 bid, 107¼ offered, after having lost 7/32 point Friday, its second loss in a row.

The Merrill Lynch North American High Yield Index was also rebounding on Monday after a Friday loss, pushing up by 0.091%. On Friday, it had moved lower by 0.072%, after seven straight sessions on the upside before that.

Monday’s rise improved the index’s year-to-date return to 6.362% from 6.266% at the close Friday, establishing a new 2017 year-to-date peak level. The old mark of 6.343% had been set on Thursday.

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