Morning Commentary: Anixter driving by; Victoria starts roadshow; KLX trades at premium

By Paul A. Harris

Portland, Ore., Oct. 29 – The Monday session in the high-yield bond market opened to a moderate regeneration of the new issue calendar, including a drive-by deal.

Anixter, Inc. plans to price a $250 million offering of seven-year senior bullet notes (Ba3/BB/BBB-) in a quick-to-market Monday trade following a late-morning conference call with investors.

Wells Fargo Securities LLC is the left bookrunner for the debt refinancing deal.

Elsewhere U.K.-based flooring firm Victoria plc started a roadshow for a €450 million offering of five-year senior secured notes (expected ratings BB-/BB).

Joint global coordinator HSBC will bill and deliver. Barclays is also a joint global coordinator. NatWest Investments is a bookrunner.

Proceeds, together with cash on hand, will go to repay the bridge facility used to fund its acquisition of Spain-based tile manufacturer Ceramica Saloni.

Capital markets volatility late last week pushed a couple of deals that had been scheduled to clear ahead of last Friday’s close into the October-November crossover week.

INTL FCStone Inc. was expected to price its $350 million offering of five-year senior secured notes (Ba3/BB-) last Friday and subsequently moved it into the Oct. 29 week.

The deal was talked to yield 8½% to 8¾%, including an original issue discount.

Also, GEP Haynesville LLC had been expected to price its $600 million offering of five-year senior notes (B3/B) on Friday.

That deal could be Monday business, according to a trader, who had yet to hear formal price talk at mid-morning on Monday.

Initial talk had it coming to yield 8½% to 8¾%. However, pricing is likely to have moved into the 9% context, a source said, adding that the order book was heard to be in decent shape.

There are also a couple of deals in the market set to wrap up full roadshows.

HC2 Holdings, Inc. is on the road with a $535 million offering of five-year senior secured notes (Caa1/B-).

Initial guidance has it coming with a yield in the low-to-mid 9% area, a trader said.

And Vector Group Ltd. is also scheduled to conclude its roadshow on Monday for a $325 million offering of eight-year senior notes (B2/B-).

Jefferies LLC is the bookrunner for both HC2 and Vector Group.

KLX Energy trades higher

In the face of continued weakness in crude prices, the new bonds of oilfield services provider KLX Energy Services Holdings, Inc. were trading at a premium to their new issue price on Monday, a trader said.

The KLX Energy 11½% senior secured notes due November 2025 were 101¼ bid, the trader said.

The $250 million issue was priced at par amid Friday’s capital markets turbulence, having blown out 75 basis points beyond the wide end of the 10½% to 10¾% official price talk and 175 bps to 200 bps beyond initial guidance in the mid-to-high 9% area.

The barrel price of West Texas Intermediate crude for December 2018 delivery was down 0.92% at mid-morning on Monday, 62 cents lower at $66.97.

The Denbury Resources Inc. 9% senior secured second-lien notes due May 2021 saw slight improvement trailing an announcement that the Plano, Texas-based oil and gas company will acquire Penn Virginia Corp. in a transaction valued at about $1.7 billion, a trader said, marking the paper at 106¼ bid.

Mixed Friday flows

The daily cash flows of the dedicated high-yield bond funds were mixed on Friday, a trader said.

High-yield ETFs saw $267 million of inflows on the day.

However actively managed high-yield funds sustained $65 million of outflows on Friday, the source said.

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