Upsized Tesoro Logistics, NRG drive by, new bonds gain; oils continue retreat

By Paul Deckelman and Paul A. Harris

New York, May 9 –After two sessions of relative inactivity, the high yield primary realm got back into the pricing business on Monday, as two quickly shopped new issues totaling $1.7 billion came to market.

Tesoro Logistics LP, which gathers, processes, transports and stores crude oil, natural gas and refined products, priced an upsized $700 million of senior notes in two parts – a $450 million issue of new eight-year notes and a $250 million add-on to its existing 2021 paper.

Traders said that both tranches firmed by more than 1 point on brisk volume when the issue was freed for aftermarket activity.

Later in the session, wholesale power generation company NRG Energy, Inc. did an upsized $1 billion of new 10-year notes.

Those bonds, too, strengthened in the aftermarket, rising by more than ½ point on sizable volume.

Syndicate sources meantime heard of several new deals hitting the road for marketing to potential investors – foodservice distributor Performance Food Group, Inc., doing a dollar-denominated deal, and in the euro-denominated market, Swiss confectioner Barry Callebaut AG and German paper tissue-products supplier WEPA Hygieneprodukte GmbH.

Back among recently priced issues, the heretofore strong new five-year deal from United States Steel Corp. slid in heavy trading in the face of overall weakness in metals and other commodities.

That also pulled down oil and gas issues, continuing a retreat that started on Friday among such names as Chesapeake Oil Corp., California Resources Corp., and Freeport McMoRan, Inc.

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