Copeland, EquipmentShare price; Arconic jumps on buyout; Tenet gives back gains; Enviva craters

By Paul A. Harris and Abigail W. Adams

Portland, Me., May 4 – Copeland, issuing via special-purpose vehicle Emerald Debt Merger Sub LLC, priced an upsized $2.275 billion tranche (from $2.25 billion) of senior secured notes due Dec. 15, 2030 (Ba3/BB-/BB-) at par to yield 6 5/8%, tight to talk, on Thursday.

The deal was heard to have played to colossal demand. However, the notes were wrapped around par late Thursday, with not a lot happening, a trader said.

Copeland/Emerald also priced €455 million of the notes at par to yield 6 3/8%, also tight to talk.

Elsewhere debut issuer EquipmentShare.com Inc. priced a $640 million issue of 9% five-year second-lien senior secured notes (B3/B-) at 94.26 to yield 10½% on Thursday.

The Columbia, Mo.-based construction equipment and technology company’s deal went clear through the high-yield wringer.

While the final coupon came on top of coupon talk, the OID came more than $2.81 cheap to the cheap end of the 97.074 to 98.036 price talk.

The 10½% yield, meanwhile, came 75 basis points beyond the wide end of the 9½% to 9¾% yield talk.

Before hitting headwinds earlier in the week, the company’s deal was being guided in mid-to-high 8% area and thus underwent 163 bps to 200 bps of widening, sources said.

The $640 million final size represented an increase from the previously revised size of $600 million. However, the deal was announced on Monday at a size of $750 million.

EquipmentShare.com’s new 9% secured notes were trading above issue price, at 95 bid, 95½ offered, going out the door on Thursday, according to a trader.

Looking to Friday, Heartland Dental, LLC and co-issuer Heartland Dental Finance Corp. are on deck with $500 million of senior secured notes due April 30, 2028 (B2/B).

That deal was talked to yield in the 10½% area on Thursday, on top of initial guidance in the mid-10% area.

Busy day in secondary

Meanwhile, it was a busy day in the secondary space on Thursday as market players responded to the meltdown in regional banks, new paper in the market and an onslaught of topical and earnings-related news.

The cash bond market continued to come in following the Federal Open Market Committee’s Wednesday announcement and chair Jerome Powell’s press conference with a lot of bids-wanted-in-competition lists circulating, a source said.

Investors took little solace in Powell’s assurance about the stability of the banking sector with the fire sale in several troubled regional lenders on Thursday signaling the market’s belief that the Fed is wrong.

Western Alliance Bancorporation’s 3% senior notes due 2031 (Ba1) continued to melt. The notes dropped double digits on Thursday after heavy selling the previous two sessions.

While it was a heavy day for the broader market, Arconic Corp.’s 6 1/8% senior secured second-lien notes due 2028 (Ba3/B+) jumped in heavy volume on news of Apollo’s buyout of the company.

Tenet Healthcare Corp.’s recently priced 6¾% senior secured first-lien notes due 2031 (B1/BB-/BB-) remained active with the notes giving back all gains made since breaking for trade.

Earnings-related news pushed Enviva Partners, LP’s 6½% senior notes due 2026 (B1/B), an off-the-run issue, into the spotlight on Thursday with the notes cratering double digits after a disastrous earnings report and the removal of a dividend from the company’s stock.

Western Alliance’s downfall

Western Alliance’s 3% senior notes due 2031 fell deeper into distressed territory on Thursday as regional banks continued to crumble despite Powell’s assurance about the health of the banking sector.

The 3% notes sank 15 to 20 points to close the day in the 45 to 50 context, a source said.

The yield climbed to 32 3/8%.

There was $17 million in reported volume.

The 3% notes have seen heavy selling over the past three session with the notes launching the week on a 76-handle.

The regional bank has been flagged as another hotspot for failure.

The stock plunged 38% during Thursday’s session with trading halted several times due to volatility.

Arconic’s buyout

Arconic’s 6 1/8% senior secured second-lien notes due 2028 were a bright spot on a heavy day with the notes jumping following news of Apollo’s buyout of the company.

The 6 1/8% notes gained 2½ points in heavy volume with the notes closing the day wrapped around 101, a source said.

There was $45 million in reported volume.

The notes will be taken out in the acquisition, although it is unclear whether there will be a tender offer, exchange offer or change-of-control offer for the notes, a source said.

Arconic announced on Thursday that Apollo funds would acquire the company in an all-cash transaction with an enterprise value of $5.2 billion.

Tenet gives back gains

Tenet’s recently priced 6¾% senior secured first-lien notes due 2031 gave back all gains made since breaking for trade under Thursday’s heavy market conditions.

The notes sank ½ point to close the day wrapped around par.

There was $35 million in reported volume.

The notes made nominal gains after the $1.35 billion issue, which priced at par, broke for trade on Tuesday.

The notes were changing hands in the par ¼ to par ½ context the previous session.

Enviva craters

Enviva’s 6½% senior notes due 2026 cratered in heavy volume on Thursday following a disastrous earnings report.

The off-the-run issue sank 11 points to close the day at 75 with the yield climbing to 18¾%, a source said.

There was $30 million in reported volume.

The wood pellet producer’s capital structure caved after reporting a much wider loss than anticipated, downwardly revising its guidance and pulling its dividend.

Enviva reported revenue of $269 million versus the $290 million expected and a quarterly loss of $116.9 million versus the loss of $45.3 million in the first quarter of 2022.

The company now anticipates an annual loss of $136 million to $186 million versus previous guidance for a loss of $18 million to $48 million.

Indexes

The KDP High Yield Daily index fell 24 points to close Thursday at 50.67 with the yield 7.3%.

The index was down 72 points on Wednesday, 24 points on Tuesday and 11 points on Monday.

The CDX High Yield 30 index was down 42 bps to close Thursday at 99.67.

The index fell 32 bps on Wednesday, 61 bps on Tuesday and 36 bps on Monday.

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