Ally, Univision megadeals lead $3.9 billion pricing parade; big Wynn deal on tap

By Paul A. Harris and Paul Deckelman

New York, Feb. 10 – The junk bond juggernaut rolled on during Tuesday’s session – the third straight day that over $3 billion of new dollar-denominated, fully high-yield-rated paper came to market and priced.

That hefty chunk of new bonds, totaling $3.89 billion, followed Monday’s new issuance of $4.69 billion as well as the $3.55 billion that got done on Friday.

Wednesday’s activity was paced by a pair of $1.25 billion offerings – drive-by deals from auto loan lender and online banking concern Ally Financial Inc. and Spanish-language media company Univision Communications Inc., the latter a greatly upsized two-part transaction.

They were joined by several other quick-to-market issues: $250 million from gas distributor Suburban Propane Partners, LP and its financing subsidiary as well as an $85 million add-on to the existing bonds of packaging producer Coveris Holdings SA, the former Exopack Holdings SA.

There was also a pair of regularly scheduled forward calendar deals: $805 million from American Tire Distributors, Inc. and a slightly upsized $250 million from telecom operator Cogent Communications Holdings, Inc.

And Wednesday is also expected to be busy, with gaming operator Wynn Las Vegas LLC and a financing unit set to bring a $1.75 billion 10-year deal to market on Wednesday.

Among recently priced deals, there was heavy trading in Monday’s issues from Citgo Petroleum Corp. and Gtech.

Statistical market performance indicators were higher across the board Tuesday after having been mixed over the previous two sessions.

Ally Financial’s $1.25 billion

The Tuesday session saw the new issue market generate a heavy news volume.

Six companies priced a combined eight tranches of junk and raised $3.89 billion of proceeds.

Five of the eight tranches were done as drive-bys.

Two of the issuers, representing three of the eight tranches, upsized their overall offers.

Executions were solid, with three of the eight tranches pricing at the tight or rich ends of talk, while the rest came on top of talk.

Ally Financial sold $1.25 billion of senior notes (/BB+/).

A $600 million tranche of 3¼% three-year notes priced at 99.294 to yield 3½%, at the tight end of yield talk in the 3 5/8% area.

Ally also priced a $650 million tranche of 4 1/8% seven-year notes at 98.506 to yield 4 3/8%, at the tight end of talk set in the 4½% area.

BofA Merrill Lynch, Citigroup, Goldman Sachs and Morgan Stanley were the bookrunners for the debt refinancing deal.

Univision massively upsizes

Univision Communications priced a massively upsized $1.25 billion two-part secured notes transaction (B2/B+) in a Tuesday drive-by.

The deal included a $500 million add-on to the company's existing 5 1/8% senior secured notes due May 2023, which priced at 103 to yield 4.682%. The reoffer price came rich to price talk in the 102.5 area.

In addition, Univision priced a $750 million tranche of 10-year notes at par to yield 5 1/8%. The yield printed on top of yield talk.

The transaction was announced early Tuesday at an overall size of $600 million.

Deutsche Bank was the left bookrunner for the debt refinancing. BofA Merrill Lynch, Barclays, Credit Suisse, J.P. Morgan, Wells Fargo, Natixis and Mizuho were the joint bookrunners.

American Tire senior sub notes

American Tire Distributors priced an $805 million issue of seven-year senior subordinated notes (Caa1/CCC+) at par to yield 10¼%.

The yield printed on top of yield talk.

BofA Merrill Lynch was the left bookrunner. Goldman Sachs, Wells Fargo, Deutsche Bank, JPMorgan, SunTrust and UBS were the joint bookrunners.

The Huntersville, N.C.-based company plans to use the proceeds to fund the redemption of all $425 million of its outstanding 11½% senior subordinated notes due 2018 (being redeemed at 102 on Feb. 11), pay a cash dividend to its parent company, American Tire Distributors Holdings, Inc., and enable the ultimate parent to fund a cash dividend or other payment to certain of its security holders.

Cogent comes atop talk

Cogent Communications Holdings priced a $250 million issue of seven-year senior secured notes (B1/B+) at par to yield 5 3/8%.

The deal was upsized from $245 million.

The yield printed on top of yield talk.

BofA Merrill Lynch was the sole bookrunner.

The Washington, D.C.-based provider of high-speed internet access plans to use the proceeds to finance the redemption of $240 million of its 8 3/8% senior secured notes due 2018.

Suburban Propane drives through

Suburban Propane Partners and Suburban Energy Finance Corp. priced a $250 million issue of 10-year senior notes (Ba3/BB-) at par to yield 5¾%.

The yield printed on top of yield talk.

Wells Fargo was the left bookrunner for the debt refinancing. BofA Merrill Lynch, Citigroup, Deutsche Bank, JPMorgan and RBS were joint bookrunners.

Coveris brings add-on

Coveris Holdings, formerly, Exopack Holdings SA, priced an $85 million add-on to the Exopack 7 7/8% senior notes due Nov. 1, 2019 (Caa1/B-) at 101 to yield 7.614%.

The reoffer price came on top of price talk.

Goldman Sachs and JPMorgan were the joint bookrunners for the quick-to-market deal.

The Chicago-based manufacturer of plastic packaging products plans to use the proceeds to refinance certain of Coveris’s debt and for general corporate purposes.

Wynn $1.75 billion price talk

Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. talked a $1.75 billion offering of non-callable 10-year senior notes (Ba2/BBB-/BB) to yield in the 5 3/8% area.

The deal, which was announced earlier Tuesday, is set to price Wednesday morning.

Deutsche Bank is the left bookrunner for the debt refinancing. BofA Merrill Lynch, Credit Agricole, Fifth Third, Scotia and SunTrust are the joint bookrunners.

Picard prices €770 million

Tuesday turned out to be a busy day in Europe as well.

France-based frozen food company Picard priced €770 million of high-yield notes in two re-sized tranches.

Picard Groupe SAS priced a €342 million add-on to its three-month Euribor plus 425 basis points senior secured floating-rate notes due Aug. 1, 2019 (Ba3/BB-/BB-) at 99.5. The add-on was downsized from €345 million, with the proceeds shifted to the unsecured tranche. The original €480 million issue priced at par to yield three-month Euribor plus 425 bps in July 2013.

Picard Bondco SA priced an upsized €428 million issue of new five-year senior unsecured fixed-rate notes (B3/B-/CCC+) at par to yield 7¾%. The unsecured tranche was upsized from €425 million.

Credit Suisse, JPMorgan, Goldman Sachs International, Morgan Stanley and BNP Paribas were joint bookrunners.

Proceeds will be used to repay debt and fund a shareholder distribution.

Sunrise prints at 2 1/8%

Sunrise Communications Holdings SA priced a CHF 500 million issue of seven-year senior secured notes (Ba2/BB+/BBB-) at par to yield 2 1/8%.

The yield printed in the middle of the 2% to 2¼% yield talk.

A proposed euro-denominated tranche was withdrawn.

Joint global coordinator Deutsche Bank will bill and deliver for the debt refinancing deal. UBS was also a joint global coordinator. BNP Paribas, DNB Markets, Morgan Stanley and UniCredit Bank were joint bookrunners.

Wittur upsizes

Paternoster Holding III GmbH, the indirect parent of Wittur International Holding GmbH, priced an upsized €225 million issue of eight-year senior notes (B3/CCC+) at par to yield 8½%.

The acquisition deal was upsized from €200 million.

The yield printed on top of yield talk.

Deutsche Bank managed the sale.

Inflows

Cash is streaming back into the high-yield bond asset class, a trader said on Tuesday.

Daily flows for Monday, the most recent session for which data was available at press time, saw high-yield ETFs take in $281 million, while actively managed funds saw $220 million of inflows on the day.

Aggregate flows, week-to-date – a period that began at last Thursday's open and will conclude at Wednesday's close – come to plus-$958 million, the source added.

Since mid-January, around the time that the European Central Bank announced it would undertake an aggressive round of asset purchases, ETFs have seen $3.3 billion of inflows, the trader added.

Suburban Propane cooks with gas

In the secondary market, traders saw the new Suburban Propane 5¾% notes due 2025 having moved higher, after the Whippany, N.J.-based supplier of propane and fuel oil’s quickly shopped deal was the first of the session heard to have priced, around mid-afternoon [ET].

A trader saw “a little bit of activity,” totaling around $8 million, pegging the new bonds in a 100¾-to-101 bid context.

A second trader had them at 100¾ bid, while a third also said that the notes had reached around the 101 mark, “but then the bid got hit.”

The latter trader also saw some dealings in the Cogent Communications deal. He said that the high-speed internet service provider’s 5 3/8% senior secured notes due 2022 “opened, but then they traded down,” retreating to around the par level from earlier positions around 101 bid.

Traders did not see any immediate aftermarket action in the day’s various other bond issues owing to the relative lateness of the hour when they priced.

Gtech heavily traded

Among the recently priced issues, Gtech SpA’s three tranches of senior secured dollar notes were all seen trading actively, but at slightly lower levels than had been notched when the Rome-based gaming technology provider’s giant-sized multi-part deal first hit the aftermarket after pricing on Monday off the forward calendar.

A trader said that its 5 5/8% notes due 2020 were trading at around par, which he called off ¼ point on the day, on volume of over $40 million. That $600 million issue had priced at par and then moved up to between par and the 100½ bid mark.

He saw its 6¼% senior secured notes due 2022 down 1/8 point at 99 7/8 bid on over $90 million of turnover. The company had priced $1.5 billion of the bonds at par, and they had initially moved up to between 100 1/8 and 100¼.

And he saw over $83 million of its 6½% notes due 2025 trading around 99 5/8 bid, calling that down ¼ point. Gtech priced $1.1 billion of those bonds at par Monday, and they initially traded slightly below that level.

A second trader saw the five- and seven-year notes trading around par on Tuesday, while putting the 10-year in a 99½-to-99¾ context.

Monday‘s other big deal – Houston-based petroleum refiner and marketer Citgo Petroleum’s $1.5 billion of 10¾% senior secured notes due 2020 – was also seen trading actively on Tuesday, with over $72 million having changed hands.

One trader saw them at 96½ bid, while a second had them at 96, calling that down ½ point from their earlier peak level.

The notes had priced at a heavily discounted 95.071 to yield 12%.

“That was the day’s focus,” one of the traders said, “recent new issues making up most of the trading activity.”

Indicators turn northward

Statistical indicators of junk performance were better across the board on Tuesday after having been mixed on Friday and again on Monday.

The KDP High Yield Daily index edged up by 1 bp to 71.55 after having been unchanged on Monday and having soared by 18 bps on Friday, which in turn had followed Thursday’s 15-bps jump.

Its yield was unchanged at 5.29% after six straight sessions in which it had narrowed, including Monday’s 1 bp easing.

The Markit Series 23 CDX North American High Yield index gained 1/8 point to end at 106 3/8 bid, 106½ offered. On Monday, it had lost 1/32 point, its second straight setback and third in the previous four sessions.

The Merrill Lynch U.S. High Yield Master II index, meanwhile, notched its 17th consecutive gain on Tuesday, improving by 0.039%, after having inched upward by 0.01% on Monday.

The latest gain lifted its year-to-date return to 1.709%, its 13th consecutive new peak level for 2015, up from the previous high point, 1.669% on Monday.

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